MARKET WRAP: FTSE 100 jumps, oil rebounds after weakness, Bitcoin above $50K

imageEconomy32 minutes ago (Aug 23, 2021 16:29)

© Reuters.

Key Points

  • Sainsbury’s leads midcaps to all-time highs
  • GBP stronger, USD falls
  • Oil rebounds from seven day losing streak
  • Gold back above $1,800/oz
  • Bitcoin retakes $50,000

By Samuel Indyk – The FTSE 100 jumped on Monday amid a broad risk-positive trading day which saw most of the major global stock indices trade in the green.

Sainsbury ‘s (LON:SBRY) shares surged higher after the company is reportedly a target of private equity groups. The reported interest helped the shares rally almost 15% and led the FTSE 250 to fresh all-time highs.

Energy giants BP (LON:BP) and Royal Dutch Shell (LON:RDSa) also saw their shares rally as oil prices rebounded following last week’s sell off. WTI and Brent crude futures had tumbled every day last week, sliding around 9% and 8%, respectively, amid fears the spread of the Delta variant in Asia and the US would slow the recovery and hurt oil demand. However, a weaker USD on Monday and some bargain hunting led the two benchmarks higher.

The US Dollar Index was soft ahead of this week’s big risk event, the Jackson Hole Symposium. The meeting of central bankers – which will now take place online – kicks off on Thursday, with Fed Chair Jerome Powell’s key speech on Friday.

The USD weakness supported GBP/USD which recovered some of the lost ground from last week, where GBP had its worst week in two months against the USD and the EUR.

On the data front, IHS Markit’s composite PMI for the UK dropped for the third consecutive month to its lowest level since February, when the UK was in a full lockdown.

“Although the PMI indicates that the economy continues to expand at a pace slightly above the pre-pandemic average, there are clear signs of the recovery losing momentum in the third quarter after a buoyant second quarter,” said IHS Markit Chief Business Economist Chris Williamson.

Another commodity that was supported by the weaker USD was gold, which reclaimed $1800/oz.

The big movers in the financial market space were cryptocurrencies. Bitcoin broke above the $50,000 for the first time since 15th May and has now risen 70% off the lows hit last month.

The latest rally comes as PayPal (NASDAQ:PYPL) announced UK customers will be able to buy and sell some cryptocurrencies on the platform.

Cardano continues to outperform its peers ahead of the Alonzo Purple upgrade that will allow smart contract and decentralised finance applications on the network. The upgrade is scheduled to take place on 12th September.


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MARKET WRAP: FTSE 100 jumps, oil rebounds after weakness, Bitcoin above $50K

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