The FTSE 100’s rally continued on Wednesday morning after UK GDP expanded in January, and another strong session in the US helped lift the mood.
It isn’t often the FTSE 100 trades based on underlying UK economic developments, yet a 0.2% increase in UK GDP in January was enough to maintain positive sentiment and take stocks higher.
Early gains diminished and the FTSE 100 was trading flat higher at the time of writing.
“A pick-up in the UK economy and a rally in US tech shares on Wall Street last night helped to sustain the positive momentum on the markets,” said Russ Mould, investment director at AJ Bell.
“In line with the consensus estimate, UK GDP grew by 0.2% in January thanks to expansion in the services sector.
“While the figure is tiny, the fact it is growing at all is a positive. Investors want the UK’s recession status cast into the rear-view mirror so they can focus on how potential looser monetary policy could provide relief to consumers and businesses, and in turn feed into greater economic activity. Sadly, that could take time to play out.”
The risk-on sentiment in FTSE 100 stocks was evident in a cyclical-led rally. Miners were among the best performers, with Glencore and Antofagasta battling it out for the pole position on the leaderboard. The two miners were over 2% higher at the time of writing. Anglo American was up 1%.
Interest also increased in the utilities sector, as National Grid and United Utilities crept 1% and 1.7% higher, respectively.
Fresnillo was the FTSE 100’s biggest faller as gold retreated from record highs. St James’s Place extended declines with another 1.5% loss.