It seems investors are very much of the mind that it is still worth backing companies that will benefit from the reopening of the global economy, despite the negative backdrop of France closing schools in its third lockdown and Brazil still struggling to get Covid under control, says Russ Mould, investment director at AJ Bell.
“The biggest contributors to the FTSE 100 in index point terms were miners Glencore and Rio Tinto as plays on stronger commodities demand and positive read-across from US President Joe Biden’s plan to invest heavily in infrastructure.
“Next’s results went down well with the market, while catering group Compass was also among the top risers as investors saw better prospects ahead as more people return to offices and education establishments in the near-term and sports and leisure-related demand starts to pick up.
“In backing these companies, investors are effectively looking past any short-term noise and potential setbacks to getting the pandemic under control, and instead looking well into the future and taking the view that earnings will not just start to recover in 2021 but also keep improving thereafter.
“Asian markets were certainly in fine form, including a 1.6% rise in Hong Kong’s Hang Seng index where investors flocked to own shares in technology and healthcare stocks. Deliveroo’s IPO might have been a flop in the UK, but investors were hungry for fellow food ordering platform owner Meituan, whose Hong Kong-listed shares jumped nearly 9%.”