FTSE 100 gains, Bitcoin jumps on Tesla news, Oil rallies

imageStock Markets2 hours ago (Mar 24, 2021 16:37)

© Reuters

Key Points

  • FTSE 100 closing price of 6,714.80, up 0.23%
  • Tesla begins accepting Bitcoin as vehicle payment
  • WTI and Brent crude futures rally after data, Suez blockage
  • GBP weak as inflation misses forecasts

By Samuel Indyk

Investing.com – The FTSE 100 closed marginally higher on Wednesday as some travel and leisure stocks pared some recent weakness and GBP declined after UK data.

The Office for National Statistics reported an unexpected dip in inflation with headline CPI rising just 0.4% year-over-year versus expectations of 0.8%. One of the big drivers was a large decline in clothing and footwear prices. The ONS also noted games and toys had an unusual fall as some seasonal distortions are more pronounced than usual given the current Covid situation.

“None of that, unsurprisingly, is likely to last,” writes ING in a emailed statement. “While clothing retailers have arguably been one of the worst-hit parts of the high street through the pandemic, their prospects may begin to improve as the reopening phase begins and people start thinking about refreshing their wardrobe, helping to relieve some of the downward pressure on prices.”

While the inflation data might have weighed on GBP and added some support to the FTSE, the IHS Markit PMI survey showed business activity moved to a seven-month high, despite the current strict lockdown measures.

“Key to the move was a sharp turnaround in the services PMI which returned back to expansionary territory for the first time in three months, rising to 56.8 from 49.5 previously,” writes analysts at Lloyds (LON:LLOY) Bank. “Meanwhile, the manufacturing PMI also nudged higher to 57.9 from 55.1 to reach its highest level since November 2017.”

Some of the recent beaten down travel and leisure stocks were the best performers in the UK’s blue-chip index. International Consolidated Airlines Group S.A. (LON:ICAG) and Rolls-Royce Holdings PLC (LON:RR) both gained over 2% while the likes of Just Eat (LON:JE) Takeaway (LON:JETJ) and Ocado Group PLC (LON:OCDO), who should benefit from extended lockdowns, were some of the worst performers.

Of the midcaps, Softcat PLC (LON:SCTS) shares jumped over 13% and were at the top of the FTSE 250 after the IT company said they forecast FY results to be significantly higher than previous expectations.

Across the pond, Tesla Inc (NASDAQ:TSLA)’s CEO Elon Musk announced the electric vehicle would be accepting Bitcoin as payment for cars. The news confirmed the plans initially announced in February when Tesla also said they had spent $1.5bln on Bitcoin to diversify their reserves. The news supported Bitcoin which jumped back above $57,000. Musk also added they would not be converting the Bitcoin received into fiat currency.

WTI and Brent Oil Futures rallied after a container ship longer than the Eiffel Tower ended up blocking the Suez Canal, a conduit for global trade and transportation of oil and LNG. Of note, about 1mln barrels per day of oil passes through the canal daily. The weekly inventory date from the US Energy Information Administration showed an increase of 1.912mln barrels in the latest week vs expectations of a draw down of 272,000 barrels.

FTSE 100 gains, Bitcoin jumps on Tesla news, Oil rallies

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