China has been at the forefront of investors’ minds this week, and it remained there on Wednesday as markets awaited further news on efforts to stimulate the economy.
The FTSE 100 reversed early losses to trade 0.2% higher at the time of writing after a softer session yesterday on concerns China’s measures may not be enough to sustain longer-term recovery.
“There’s hope in the air for more clues about China’s latest stimulus plan, which is helping lift markets mid-week. The FTSE is set to edge higher in morning trade as the Central Economic Work Conference begins with new targets expected to be laid out,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“With the Politburo having announced a looser monetary stance will be adopted next year, investors are holding out for more fiscal support, bigger spending and lower borrowing. While the plans are still likely to be short on detail this week, the economic priorities set by the conference will be seen as an indicator of how far authorities are willing to go to bolster China’s domestic demand, in the face of looming US tariffs which are set to hamper exports.”
While much of the focus has been on China this week, attention will soon shift to the US and the latest round of inflation data. Traders will be acutely aware of the uncertainty around interest rate cuts, and each highly anticipated inflation data point brings with it the chance of a shift in market expectations of when the Fed will next cut rates.
US CPI will be released at 13.30 on Wednesday and has the potential to move the dial for equities.
FTSE 100 shares were evenly split between gainers and decliners on Wednesday, although the risers did show a little more vigour than the decliners.
IAG was the top riser after a broker upgrade sent shares 2.7% to the highest level since 2020. “International Consolidated Airlines is having a whale of a time on the stock market this year and its shares just hit their highest level since March 2020 thanks to a ratings upgrade from Deutsche Bank,” said Dan Coatsworth, investment analyst at AJ Bell.
IAG shares have gained 87% in 2024 alone.
Endeavour Mining was having a good session after releasing a positive evaluation of a gold mine in Côte d’Ivoire.
“I am delighted with the results of this pre-feasibility study that highlight the potential for Assafou to become a tier 1 asset for Endeavour,” said Ian Cockerill, CEO of Endeavour Mining.
Ashtead was rooted to the bottom of the leaderboard again following a profit downgrade yesterday. Ashtead shares were down 5% at the time of writing.