MARKET REPORT: Footsie rallies again as commodity prices boom
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MARKET REPORT: Footsie rises to highest level in nearly five years as Chinese economy reopens drive up commodity prices
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The stock market hit its highest level in nearly five years as New Year’s cheer continued.
On another bullish day for investors, the FTSE 100 index rose 0.3 percent, or 25.45 points, to 7724.94. It was the first time since mid-2018 that the Footsie rose above 7700.
However, the more domestically focused FTSE 250 fell 0.1 percent, or 25.33 points, to 19479.39.
China boost: On another bullish day for investors, the FTSE 100 index rose 0.3% – it was the first time the Footsie had broken above 7700 since mid-2018
The rally among the blue chips was helped by mining and oil stocks, while the continued reopening of the Chinese economy drove up commodity prices.
Oil prices rose back above $80 a barrel in hopes of rising demand. It sent BP 0.5 percent, or 2.25p, to 479.3p and Shell added 1.2 percent, or 29p, to 2379p.
Meanwhile, Glencore rose 3.2 percent, or 16.7 pence, to 542.6 pence and Antofagasta gained 4.3 percent, or 71.5 pence, to 1726.5 pence, as the mining sector posted gains.
Michael Hewson, Chief Market Analyst at CMC Markets UK, said: “The FTSE 100 has risen to its best level since August 2018, driven by the resilience of commodity prices after China eased Covid travel restrictions, propelling companies like Glencore and Antofagasta higher. while copper prices rise to their highest levels in six months.”
Nanoco shares fell 24.4 percent, or 13.6 pence, to 42.2 pence after it warned settlement costs with Samsung would be lower than hoped.
The Manchester-based tech company sued the South Korean tech giant for patent infringement. Nanoco alleged that Samsung used its “quantum dot” technology on all of its TVs without permission.
Last week, the pair avoided a courtroom confrontation and were given 30 days to work out the terms of the no-fault deal, which could be worth as much as $500m (£415m).
Stock Watch – Music Magpie
Music Magpie strengthened its foothold in the US after its American brand signed a deal with the largest retailer in the world.
The group, which enables consumers to buy and sell used CDs and electronics, said refurbished discs sold by its Decluttr company can be purchased by Walmart.com’s 120 million monthly website visitors.
Decluttr’s refurbished phones, iPads, MacBooks and consoles will also be added soon.
Music Magpie shares rose 10.9 percent, or 3.1 pence, to 31.6 pence.
But Nanoco warned yesterday that “further negotiations” were needed and that uncertainty remained about what a final agreement would look like.
“The gross settlement value is expected to be at the lower end of the range of expectations for a successful outcome of the jury trial, as previously led by the company,” a company spokesperson added.
Investors in telecom stocks had a lot to digest at the start of the week. Vodafone agreed to sell its Hungarian operations for £1.5bn as part of debt reduction efforts.
It is bought by the local technology company 4iG and the Hungarian state.
Voda finance chief Margherita Della Valle, who stepped up to become interim director as the search to replace Nick Read continues, said the “combined entity will increase competition and accelerate investment in Hungary’s ongoing digitization.”
Voda shares fell 0.7 percent or 0.64 pence to 88.07 pence. Airtel Africa, meanwhile, bought 4G and 5G radio frequencies from the Nigerian Communications Commission (NCC) for £260 million.
The company’s Nigerian subsidiary hopes the deal with the country’s telecom regulator will enable the company to “provide reliable and affordable services to local communities.”
The news was tempered somewhat by Barclays lowering the group’s target price from 200 pence to 195 pence. Shares fell 3.2 percent, or 3.8 pence, to 114.5 pence.
There was better news for BT after analysts at Citi upgraded the telecom giant’s rating from ‘neutral’ to ‘buy’ and raised its price target from 130 pence to 160 pence. Shares rose 1.1 percent, or 1.4 pence, to 128.05 pence.
Tortilla Mexican Grill produced tasty results as the restaurant group brushed aside the impact of train strikes and inclement weather. Sales were up 20 per cent to £57.7m for the year ended January 1.
Tortilla praised the positive progress of the stores it opened during the year, including those in Durham and Canterbury. Shares rose 16.1 percent, or 14 pence, to 101 pence.