The FTSE 100 was trading with a positive tone on Wednesday after a solid Asian session helped European stocks open higher, and investors await vital jobs data from the US.
The FTSE 100 was 0.45% higher at the time of writing and is 1.4% higher over the past five trading sessions.
Optimism around interest rates is starting to grow, but one would caution this could quickly unwind on adverse US Non-Farm Payrolls due to be released on Friday.
“The FTSE 100 moved higher on Wednesday as it responded to positive trading in Asia,” said AJ Bell investment director Russ Mould.
“Cooling job vacancy data from the US helped bolster expectations that we are at the pivot point of this rate hiking cycle – though more news on the US labour market through the course of this week will provide a fuller picture.”
Miners have recently been at the forefront of the FTSE 100’s moves. The trend continued on Wednesday after upbeat comments by Rio Tinto’s CEO.
“Miners were in demand as Rio Tinto CEO Jakob Stausholm briefed investors that Chinese steel mills were ‘producing flat out’. This is good news for iron ore producers like Rio, with the patchy recovery in China a big reason why the mining sector has had a difficult time in 2023,” Mould said.
“Rio also announced big spending plans. Along with signs of burgeoning M&A elsewhere in the sector, any excitement felt by investors at the growth potential may be tempered by concerns the industry is losing some of the discipline it has demonstrated in recent years.”
Rio Tinto gained 1.75%, Anglo American rose 1.7%, and Glencore added 1.45%.
Prudential was the top riser, gaining 3.2%, as the mood around China and Asia improved.
British American Tobacco
British American Tobacco was the top faller after revenue growth came in at the lower end of expectations as the company struggled to contend with lower smoking rates and a transition to vapes and other new categories.
“Despite weak demand from smokers in the important US market it’s managed to eek out a year of revenue growth albeit at the lower end of previous guidance,” said Derren Nathan, head of equity research at Hargreaves Lansdown.
“Meanwhile the rollout of new categories such as vapes, heated tobacco and oral pouches is continuing apace with breakeven now expected in the current period, two years ahead of the original plan.
“Management now sees these products as the cornerstone of the company’s future expecting them to deliver half of group revenues by 2035. But that’s a long way off. Non-combustible products should contribute to the bottom line in 2024 but beyond that the long-term outlook for margins is still unclear.”
British American Tobacco shares were down 7% at the time of writing.