The FTSE 100 rose on Wednesday as investors seemed content to climb a wall of worry, with several risks such as higher rates and geopolitics still in the background.
London’s leading index was up 0.4% to 10,698 at the time of writing.
“Equity markets continue to show resilience despite a whirlwind of worries around AI spending, high bond yields, inflationary pressures and the potential for multiple interest rate hikes over the coming 12 months,” said Russ Mould, investment director at AJ Bell.
“What initially looked like a choppy session for Wall Street on Tuesday turned into a calmer journey as the day went on. Futures prices imply modest gains in the US on Wednesday, and that upbeat outlook was also reflected in European equities, which shrugged off the volatile backdrop to hold firm.”
We’re in the midst of US earnings season, with US banks offering insight into the state of the world’s biggest economy.
“Q3 earnings season has officially kicked off with some of Wall Street’s biggest banks,” said Daniela Hathorn, Senior Market Analyst at Capital.com.
“JPMorgan, Goldman Sachs, Citigroup and Wells Fargo all reported higher profits year-on-year, but the results revealed some early signs that elevated borrowing costs and market volatility are beginning to affect activity.”
US CPI, scheduled for release later on Wednesday, could set the tone for trading for the rest of the week as traders gauge the trajectory for interest rates.
In London, most FTSE 100 stocks traded higher as investors bought UK property stocks, miners and a range of defensive names.
British Land was the FTSE 100’s top riser, adding 2.9% amid a wider rally in London-listed REITs. Tritax Big Box gained 2.2% while London Metric added 1.7%.
Burberry was among the top risers as it bounced back from concerns about its peer LVMH, which updated the market yesterday.
Airtel Africa fell again and was the FTSE 100’s top loser, with the stock breaking to fresh lows after its spin-out, Airtel Mobile Commerce, went public and unconditional trading began on Wednesday.