The FTSE 100 continued its rally to pre-Ukraine conflict levels as the index remained steady at a 0.5% increase to 7,484 in late morning trading on Tuesday.
Analysts noted that the FTSE 100 was now only slightly down on the year and cited the impact of rising commodities and the FTSE 100’s average yield as an attractive factor in an inflationary environment.
“The FTSE 100 extended its recent strong run and is now not too far off the levels it reached before the Russian invasion of Ukraine and only marginally lower year-to-date,” said AJ Bell Investment Director Russ Mould.
“It has substantial commodities exposure, a decent yield which appeals in an inflationary environment and more discounted valuations than seen in other global markets.”
JD Sports
JD Sports’ shares jumped 3.5% to 154p after the positive response to Nike’s third quarter results. The sports fashion company who supplies Nike apparel have been heavily hit this year with concerns around their sales due to pressure on household spending.
“Shares in Nike found some air in afterhours trading overnight after a solid set of third quarter numbers,” said Mould.
“Impressively the sportswear giant managed to boost margins despite the supply chain issues it continues to face.”
Financials
Financial shares rose on Tuesday on the expectations the Federals Reserve would again raise rates to help fight inflation.
Susannah Streeter, Senior Investment and Markets Analyst, Hargreaves Lansdown said, “caught between a rock and a hard place, the Federal Reserve sees little option but to try and chip away inflation with even bigger interest rate hikes this year, if price pressures keep mounting.”
Prudential and HSBC shares were trading up 3.3%, follwed by Natwest, Standard Charter and Lloyd’s shares gaining 3.1%, 2.9% and 2.2% respectively.
Kingfisher
The top fallers were led by Kingfisher with a decrease of 5.1% to 276.4p on Tuesday following the release of its annual results and concerns the company’s profits could decline as consumers leave their homes for the outside world once again.
“Kingfisher benefited from people looking to do up their homes during the pandemic, however the world has since moved on and, despite management reporting a strong start to the current year, there has to be a risk that the company’s moment in the sun has passed,” said AJ Bell investment director Russ Mould.
Kingfisher generated revenue of £13.1bn, an increase of 6% from 2020 results. However, the company noted a net cash outflow of £237m as opposed to a cash inflow of £881m in 2020.
Auto Trader Group fell 3.4% to 652.8p as it announced the £200 million acquisition of Autorama.