The FTSE 100 kicked off a quiet day of trading in the second week of August, with the blue-chip index gaining 0.6% to 7,487.6 in early afternoon trading as the market defied the cost of living crunch and gained closer to the breakeven mark.
“The summer is supposed to be a quiet time for markets as many people are sitting on the beach, rather than glued to a screen trading stocks and shares. So far, this summer is proving to be a decent session, and one that will provide a nice surprise when people get back to their desks after a bit of sun, sand and sea,” said AJ Bell financial analyst Danni Hewson.
“The FTSE 100 managed to press ahead … at the start of the new trading week, meaning it has been on a positive run since mid-July. The 6% gain for the current rally to date means the UK blue chip index is less than 1% away from hitting breakeven for the year so far.”
“That’s considerably better than the S&P 500 index in the US which is down nearly 14% year to date.”
US markets are currently bracing for a significant rate hike in the US Federal Reserve’s next meeting, following better than expected nonfarm payroll figures last week, which beat analyst expectations with 528,000 jobs added in July.
The Dow Jones rose 0.4% to 32,889 in pre-open trading, with the S&P 500 gaining 0.4% to 4,166.7 and the NASDAQ increasing 0.6% to 13,315.7.
Meanwhile, Brent crude oil tumbled to $93 per barrel, diving to levels unseen since before Russia’s invasion of Ukraine in February.
Shares in Shell and BP appeared unshaken, however, gaining 0.2% to 2,155p and 0.4% to 412.9p, respectively.
Next
Next shares fell 0.3% to 6,420p following reports that the FTSE 100 fashion company was eyeing an equity investment in AIM-listed retailer Joules.
The investment would amount to approximately £15 million, with Joules noting the injection would be “no less than Joules’ current market price.”
“Posh wellies seller Joules has found a new lease of life on the stock market following news of a potential investment in the business by retail giant Next,” said Hewson.
“Joules has been struggling this year, with disappointing sales, supply chain problems and rising costs. Once a shining star in the retail sector, Joules saw its share price collapse after a string of profit warnings.”
“Next doesn’t typically buy companies outright so it seems unlikely that an initial investment in Joules will lead to a full takeover. Instead, expect to see it become an influential shareholder and for more of Joules’ products to appear on Next’s website.”
