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Monday, September 26, 2022
Stocks & Shares

FTSE 100 extends gains as commodities, banking sectors rise

commodities

The FTSE 100 index rose 0.5% and the industrial metal and mining index climbed 1.7% as hopes of fresh stimulus in China aided copper and other metal prices

UK’s blue-chip index rose for a second straight day on Friday on gains in commodities and banking sectors, while shares of software firm Micro Focus nearly doubled after a $6 billion buyout deal.

The FTSE 100 index rose 0.5%. The industrial metal and mining index climbed 1.7% as hopes of fresh stimulus in China aided copper and other metal prices.

Still, the main index was heading for weekly losses after data highlighted the impact of surging prices on business activity and central bank policymakers stuck to an aggressive tone on interest rate hikes despite signs of economic slowdown.

British energy bills will rise 80% to an average of 3,549 pounds ($4,188) a year from October, said regulator Ofgem, calling it a “crisis” that needed to be tackled by urgent and decisive government action.

It’s what people have been anticipating already, said Oliver Allen, markets economist at Capital Economics.

When we find out who won the Conservative Party leadership election, people might get a bit more of a clue on what the government in the UK is going to give households in terms of assistance with gas prices, he said.

The two candidates, Liz Truss and Rishi Sunak, have clashed over how to respond. Their proposals, which include suspending environmental levies or cutting a sales tax, have been dismissed by economists as too little to avert the unprecedented hit to household budgets.

Investors will be watching Federal Reserve Chair Jerome Powell’s speech later in the day for clues on where U.S. interest rates are headed.

The domestically-focussed FTSE 250 index rose 0.6% but was also on course to record a sharp weekly decline.

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