The FTSE 100 gained on Wednesday as interest rate expectations boosted sentiment while Prudential led the index higher after announcing bumper new business metrics and increased their dividend.
The FTSE 100 was 0.37% higher at the time of writing.
Expectations the Federal Reserve will hold off hiking rates at their next meeting have increased after a series of softer US economic data. Dovish expectations have helped support equities with London’s leading index joining a rally in US equities.
“What appears to be bad news for the US economy is being notched up as good news for equities with a weakening jobs snapshot and slide in consumer confidence lifting indices. Signs of America’s cooling economy have raised hopes that the pause button will be pushed on punishing interest rate hikes,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
Markets have been digesting a raft of US economic data points with more to come later in the week. The highly anticipated Non-Farm Payrolls will be released on Friday and will be pored over for indications of the Federal Reserve’s next move.
Prudential
Prudential shares have been pulled from pillar to post by China’s spluttering growth and unconvincing stimulus measures. Today’s half-year report demonstrates the China-focused insurance and wealth manager’s underlying operational strength with new business profit jumping 39% to $1.5bn.
“There might be trouble in China, but that’s not caused any major hiccups with Prudential’s performance. The Asian-focused insurance giant continues to benefit from increased activity across the Asian region,” said Matt Britzman, equity analyst at Hargreaves Lansdown.
“In particular, domestic demand in Hong Kong and travellers coming over from mainland China following the opening of the border in February continue to act as a tailwind for new business. Market share performance was encouraging, especially given the tough competitive landscape in the region.
Newly minted CEO, Anil Wadhwani, has now completed his strategic review and set out plans for the medium-term future at Prudential. Nothing here looks like a major overhaul, increased focus on delivering tech distribution and more consistent client journeys across products and geographies all make sense. Organic growth and retention of existing customers look to be key, with the end goal being 15-20% growth in new business profit over the five years to 2027.”