MARKET WRAP: FTSE declines; GBP weakens; Nat Gas & Oil hit multi-year highs

imageEconomy11 hours ago (Sep 28, 2021 16:35)

© Reuters.

Key Points

  • FTSE 100 closing price of 7,027.4, -0.5%
  • Inflation fears weigh on equities
  • Go-Ahead tumbles after losing government contract
  • Brent pares gains after hitting 3-year high
  • Nat Gas hits $6/mmbtu for first time since Feb 2014
  • GBP/USD hits 9-month low as USD rallies
  • Bitcoin steady as 100DMA holds

By Samuel Indyk – The FTSE 100 declined on Tuesday amid a global stock sell-off as inflationary fears continue to lift bond yields and weigh on riskier assets. The blue-chip index managed to hold above 7,000 while the mid-cap FTSE 250 index underperformed.

Go-Ahead (LON:GOG) shares tumbled in London after the UK government announced it would be taking over their Southeastern rail franchise after “serious breaches” of the agreement. The company has now delayed its annual results and its Chief Financial Officer, Elodie Brian, has resigned with immediate effect.

Shares in FTSE 250 company Moonpig (LON:MOONM) declined despite the company lifting its revenue guidance for the financial year. The online greetings card retailer was a big pandemic winner but as physical retail has now reopened, focus will be on the medium-term outlook. Moonpig said medium-term growth and margin targets remain unchanged.

“The key to Moonpig’s future success will be harvesting data on users and getting them to increase the frequency of purchases and to buy more than just a greetings card,” said AJ Bell Investment Director Russ Mould. “It’s a highly competitive industry but there is scope for further growth as part of the world’s structural shift towards e-commerce.”

Commodities were in focus after Brent crude traded above $80/barrel and at its highest level since October 2018 late on Monday. WTI broke above $76/barrel before also paring gains and turning negative. The crude demand recovery continues to support prices with Covid cases continuing to decline in the US and countries from Japan to Australia announcing plans to ease restrictions.

US Natural Gas Futures surged above $6.00/mmbtu for the first time since February 2014 as the tight global supplies and prospect for increased winter demand due to heating continues to support prices. However, prices also pared some of the gains as the recent surge lost some momentum.

GBP was weak with GBP/USD dropping to a 9-month low, despite recent hawkish comments from the Bank of England. GBP often suffers when markets are risk-off, but the soaring power prices and fears of supply bottlenecks in the UK are also weighing on the currency. The images of queues at petrol pumps and stations running out of fuel is not helping matters.

Cryptocurrencies were lower with Bitcoin finding support around its 100-day moving average near $41,100. Other major cryptocurrencies were also mostly lower but the losses are since China announced a ban on all cryptocurrency transactions are maybe not as steep as some had feared.


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MARKET WRAP: FTSE declines; GBP weakens; Nat Gas & Oil hit multi-year highs

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