The FTSE 100 looked set to finish the week with a softer tone despite a sterling session for US equities overnight.
Although London’s leading index was down 0.4% at the time of writing on Friday, it was still up over 1.5% on the week amid a surge in global stocks, driven by the US.
The sheer scale of the rally in US stocks since last Monday’s sell off in terms of value created is almost as breathtaking as the 12% drop in the Nikkei that sparked the global equity rout.
Very few people would have predicted such a sharp turnaround in global equities after last week’s volatility. Those who did and acted on it have been handsomely rewarded.
Alas, the majority of the gains have been in US stocks and although the FTSE 100 has rallied, the gains are rather disappointing when compared to the rip-roaring rally experienced in US mega cap names.
While investors have been filling their boots with AI-related stocks at knock down prices and helping the S&P 500 back to within a few percent of all time highs, the FTSE 100 has meandered along, hardly reacting to promising inflation data and robust GDP growth.
London’s exposure to China can be blamed for that. Soggy Chinese industrial data took the wind out of the miners’ sails this week and capped gains despite some fairly encouraging updates from Admiral and Entain’s peer Flutter.
On Friday, the losses were broad, yet contained, as a bumper session in the US failed to lift London.
Rightmove was the top faller, down 2%, while miners dragged and housebuilders slipped.
Entain was the top gainer as investor interest in the stock persisted after a strong update from its peer Flutter Enterainment this week.