The FTSE 100 was buoyant on Wednesday as investors enjoyed improving sentiment around the US economy. Many economists are shifting their forecast for US growth, and recession predictions are receding.
The FTSE 100 was 0.6% higher at the time of writing on Wednesday after a strong session in US stocks overnight lifted the mood in Europe. US stocks opened lower on Wednesday.
“Upbeat sentiment about signs of resilience for the mighty American economy is over-riding worries about China’s flagging recovery,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown
“Hopes for resilience in the world’s largest economy are off-setting concerns about China’s lacklustre performance. Chinese industrial profits have slid sharply since the start of the year as the recovery has lost steam.”
Investors were also closely watching the Sintra panel of Central Banks, including the Federal Reserve, ECB, and Bank of England, for hints of the next move in monetary policy. The panel was getting underway at the time this article was published.
Lower-than-expected Eurozone inflation data released this week helped support European equities as investors looked forward to slowing rate hikes.
FTSE 100 movers
The FTSE 100 rally was broad on Wednesday, with only 85 of the 100 constituents trading in positive territory.
Sage was the top riser after being placed on JP Morgan’s ‘analyst focus list’ and was raised to overweight from neutral. JP Morgan has a 1,100p price target for Sage Group, which traded at 916p at the time of writing.
Bargain hunters were out in force and picking up shares recently beaten down by macroeconomics.
UK banks NatWest and Barclays were over 1% higher, while Land Securities and Vodafone rebounded from recent lows.