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Stock markets: UK stocks advance as investors look forward to US Fed policy decision

By Indrabati Lahiri

08:35, 16 March 2022

Green and black stock chart, indicating upward movement
Investors speculated that the US Federal Reserve would raise interest rates for the first time in three years – Photo: Shutterstock

UK stocks climbed up as the FTSE 100 Index was boosted by mining and finance stocks, as investors looked forward to the US Federal Reserve’s much-anticipated policy decision, due for later in the day.

European stocks reflected the same upbeat sentiment, with the EURO STOXX 50 Index rising, as investors speculated that the US Federal Reserve would be raising interest rates, which would make it the first time in approximately three years.

Overnight in Asia, Hong Kong’s Hang Seng Index rose, along with the US S&P 500 Index

US500

5,528.10 Price
-0.550% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 0.5

US100

19,603.20 Price
-0.870% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 1.8

DE40

18,471.00 Price
-0.390% 1D Chg, %
Long position overnight fee -0.0214%
Short position overnight fee -0.0008%
Overnight fee time 21:00 (UTC)
Spread 2.0

J225

39,215.40 Price
-0.550% 1D Chg, %
Long position overnight fee -0.0112%
Short position overnight fee -0.0110%
Overnight fee time 21:00 (UTC)
Spread 10.0

What’s interesting today: IG Group announced that it expected its full-year revenue to slightly exceed market expectations, but warned of slower growth across its US branch. Hyve Group became the latest to announce that it would either be exiting Russia completely, or thoroughly reviewing its operations there.

Why are stocks up today?

US policy decision: Investors looked forward to the US Federal Reserve’s policy meeting due for later in the day.

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  • What this means: The US Federal Reserve is speculated to raise interest rates for the first time in three years, which would go a long way in helping inflation that has been soaring to multi-year highs in the last few years. Investors are also looking forward to increased guidance on monetary policy tightening, which would be especially relevant in the turmoil and uncertainty that the Russia-Ukraine invasion has inflicted on global markets and economies recently.

Stock markets: key highlights

  • The FTSE 100 Index inched up 1.24% to 7,264.8 points
  • The EURO STOXX 50 Index climbed up 2.15% to 3,818.5 points
  • Germany’s DAX Index edged up 2.09% to 14,208.3 points
  • France’s CAC 40 Index rose 2.11% to 6,489.3 points
  • The leading sectors were consumer services and finance, whereas mining and consumer non-durables took a hit
  • The US S&P 500 Index inched up 0.78% to $4,287.0.

Market sentiment

  • The Cboe Volatility Index, or VIX, a measure of expected fluctuations in US stocks, dropped to 28.83
  • The US Dollar Index inched lower to $98.73
  • The US 10-Year Bond Yield Index traded flat at 2.149%.

Top stock gainers: UK and Europe

  • The top stock gainers in the UK were Pearson (PSON), London Stock Exchange Group (LSE) and M&G (MNG)
  • Pearson stock rallied approximately 20% as investors hoped for a private equity offer
  • London Stock Exchange Group shares gained following the company announcing its venture into global private markets
  • M&G shares inched up following the company recently appointing a new board chair
  • The best-performing companies in Europe were Adyen BV Parts Sociales, Mercedes-Benz Group and Ahold Delhaize (AD)
  • Adyen BV Parts Sociales shares gained following the company receiving an ‘outperform’ rating by Credit Suisse recently
  • Mercedes-Benz Group stock rallied following the recent launch of a new battery plant 
  • Ahold Delhaize shares edged up following the company recently starting its annual start-up programme.

Top stock losers: UK and Europe

  • The worst-performing companies in the UK were Polymetal International (POLY), ITV (ITV) and Burberry (BRBY)
  • Polymetal International shares dipped following the company losing six of its board members recently
  • Burberry (BRBY) shares dipped following the company also exiting from Russia
  • The top stock losers in Europe were SAP (SAPd), Danone (BN) and Munich Re (MUV2)
  • SAP shares fell following Ukraine’s President Zelensky adding pressure on software companies to be harsher on Russia
  • Danone recently launched a new strategic plan
  • Munich Re recently announced a new partnership with Netradyne.

Markets in this article

BRBY
Burberry
7.31 USD
-0.09 -1.240%
VIX
Volatility Index
14.33 USD
0.36 +2.600%
MBGn
Mercedes Benz Group
64.06 USD
-0.41 -0.640%
BN
Danone
58.66 USD
-0.22 -0.370%
EU50
EU Stocks 50
4889.7 USD
-13.9 -0.280%

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Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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