European markets pressed ahead on Wednesday, shrugging off any negativity from Wall Street’s disappointing session last night.
The FTSE 100 rose by five points to 7,769, propped up by financials, energy and mining stocks. Whether this situation lasts is another matter as US inflation figures later today could easily turn markets upside down if inflation proves stickier than hoped.
Russ Mould, investment director at AJ Bell, said: “Investors are eager to see proof that inflation is easing as that is another reason for the Federal Reserve to stop raising interest rates. The sharp rise in the cost of borrowing has had a brutal impact on consumers and businesses and any relief on this front would be welcomed by the market – even if it is just a rates pause rather than reduction in the near-term.
“This is a moot point as investors increasingly believe we could get rate cuts by the year-end. Failure for this to transpire could be the next worry point for the market.
“In the world of small caps, shares in Unbound crashed 62% after a fundraising deal collapsed. The owner of the Hotter footwear chain has been an unmitigated disaster for investors since being demerged from Electra Private Equity. Trading conditions have been tough for the business and this has spooked Marwyn Investment Management which had been planning to buy £10 million of new shares. It’s now pulled out, leaving Unbound to look at alternative options to strengthen its balance sheet.”