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FTSE 100 hangs on to gains

by LLB Editor
13th Jul 23 10:19 am

After a crackerjack session yesterday the FTSE 100 was just about hanging on to its gains on Thursday as the latest US inflation data fed hopes the Federal Reserve is nearing the end of its rate hiking cycle.

AJ Bell head of financial analysis, Danni Hewson, said: “That the Bank of England is perceived to be lagging a long way behind in its battle against inflation is reflected in sterling reaching its highest levels in well over a year against the dollar, and this is not helpful to an index packed full of overseas earners. Their foreign revenues are worth less in relative terms when the pound goes up.

“Later we should get more insight into the inflation picture in the US with producer prices, which tend to be a leading indicator for the trajectory of prices in the rest of the economy.

“UK GDP figures were underwhelming, with a month-on-month decline in May. Elsewhere, evidence of cracks in the wider global economy could be seen in the drop in net fee income at recruiter Hays and a cut to earnings guidance from European chemicals firm BASF. The chemicals and recruitment sectors may not have a huge amount in common but both tend to be highly sensitive to economic trends.

“Could Dr Martens finally be putting its best foot forward? It started life as a public company as if its laces were tied together, but the iconic footwear brand appears to have made some progress in sorting out its problem-child US business. Though, with its shares down three quarters on the price at which it listed in 2021, it still has plenty to prove to shareholders.”

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