MARKET WRAP: FTSE 100 finishes higher, oil set to snap winning streak

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imageEconomy8 hours ago (Sep 16, 2021 16:35)

© Reuters.

Key Points

  • FTSE 100 closing price of 7,027, +0.15%
  • Travel stocks take-off
  • Basic materials sector struggles
  • USD rallies, GBP/USD back below 1.38
  • Oil snaps 4-day winning streak
  • Cryptocurrencies mixed

By Samuel Indyk – The FTSE 100 finished higher on Thursday, supported by airlines as the UK looks set to ease travel rules.

The Financial Times reported that the traffic light system for international travellers entering England is set to be scrapped by a simpler system with countries deemed safe to travel to or not. Travellers from countries that remain on the Red list will still need to quarantine upon arriving in England while those arriving from other countries will not have to take a PCR test when they enter.

The news lifted airlines such as EasyJet (LON:EZJ), Wizz Air (LON:WIZZ), and British Airways parent IAG (LON:ICAG).

Ryanair (LON:RYA) shares were higher as the company lifted its passenger growth forecast to 50% over the next five years from an earlier estimate of 35%.

Drax Group (LON:DRX) was at the top of the FTSE 250 after the fire at the Sellindge interconnector on Wednesday. National Grid (LON:NG) said the power link from France to the UK will be out for more than six months. The timing could not be worse as wholesale natural gas prices have surged but it may mean the UK will have to generate power from alternative sources and Drax looks set to benefit.

At the other end of the FTSE were miners such as Anglo American (LON:AAL), Rio Tinto (LON:RIO), and BHP Group (LON:BHPB). The slowing growth outlook from China is pressuring shares while the country’s NDRC said relevant authorities will continue to release material reserves to ensure prices of metals such as aluminium, copper and zinc will return to reasonable ranges.

The USD was strong across the board, benefitting from strong US data where both Retail Sales and the Philadelphia Fed Manufacturing Index beat expectations. The Commerce Department said retail sales rose 0.7% in August versus expectations of a 0.8% decline.

GBP/USD drifted lower with the pair dropping back below 1.3800 ahead of the Fed and Bank of England rate meetings next week.

WTI and Brent crude futures were both trading lower, napping a four-day winning streak. US crude production in the Gulf of Mexico is slowly coming back on line with the Bureau of Safety and Environmental Enforcement (BSEE) saying just 30% of production is shut in, as of Wednesday.

Natural Gas Futures snapped a three-day winning streak but remained above $5 with focus on tight supplies. The latest US storage change data showed a larger than expected increase of 83Bcf versus consensus of 76Bcf but stocks are still 231Bcf below the five-year average.

Bitcoin and other major cryptocurrencies were relatively steady with Bitcoin struggling to make a break above $48,000.

“A significant break below $44,000 could make things interesting, while a move above $48,000 will put the focus back on $50,000 and may even trigger a shift in momentum that has been absent in previous rallies,” writes OANDA Senior Market Analyst Craig Erlam.


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MARKET WRAP: FTSE 100 finishes higher, oil set to snap winning streak

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