FTSE 100 closes higher, GBP strong, Suez Canal remains blocked

imageStock Markets9 hours ago (Mar 26, 2021 16:31)

© Reuters.

Key Points

  • FTSE 100 closing price of 6741.14, +0.99%
  • GBP strong on economy hopes
  • Oil jumps, Suez Canal still blocked
  • Miners rally on higher metals prices

By Samuel Indyk

Investing.com – The FTSE 100 finished Friday higher to close the week with a gain of 0.5%. Smiths Group PLC (LON:SMIN) was the best performing stock in the blue-chip index after the company reported half-year results pre-market. The company boosted their dividend by 6% and said they were confident in meeting market expectations for the full year, despite the uncertainty from Covid.

Miners were particularly strong amid an increase in basic resources prices. Copper jumped back above $4/lb due to optimism about US growth ahead of Biden’s infrastructure plan which is set to be unveiled next week.

Burberry Group PLC (LON:BRBY) underperformed after the company became the latest to face backlash in China over the Xinjiang cotton row. The fashion company is a member of the Better Cotton Initiative, a group that has suspended approval of cotton from Xinjiang due to concerns over human rights. The Chinese actress Zhou Dongyu terminated her contract with Burberry as a brand ambassador while their company’s famous check patter was removed from Tencent’s video game Honor of Kings due to the backlash Burberry has faced in China.

GBP strengthened on Friday amid general vaccine optimism and hopes of a fast economic rebound. This comes despite the meeting of European leaders yesterday where they agreed that AstraZeneca PLC (LON:AZN) (NASDAQ:AZN) could not export any Covid vaccines until its contract with the EU is fulfilled. Reports that the EU and UK were also close to a deal on financial services also supported GBP.

“The economic wheel of fortune seems to be turning back in the UK’s favour,” said Kallum Pickering of Berenberg. “We expect a strong consumer-led recovery from spring onwards as savings normalise, face-to-face services re-open and manufacturers step up production to meet rising demand.”

The UK retail sales data did little to dampen the outlook for GBP with volumes increasing 2.1% in February. The increase was partly driven by an increase in outdoor furniture purchases as Covid restrictions start easing from next week in the UK.  

WTI and Brent crude futures benefitted from the ongoing blockage of the Suez Canal by the Ever Given container ship. It is still unclear how long the ship will be stranded but there are reports that shipping companies have now begun to reroute tankers around Africa, adding around 16 days to sailing times for Europe and 12 days to the US east coast.

Bitcoin jumped after finding support ahead of $50,000 on Thursday. The world’s largest cryptocurrency still remains about $8,000 away from its all-time high after tumbling this week and the market cap is now just under $1tln.

FTSE 100 closes higher, GBP strong, Suez Canal remains blocked

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