The FTSE 100 was up 0.2% to 7,601.9 in late morning trading on Monday, following a rally in oil prices, with Brent Crude hitting $120 per barrel for the first time since March as the EU convened to discuss its decision to ban imported Russia oil.
The Hang Seng gained 2% to 21,123.9 following China’s reopening of key economic hubs across the country, as Covid-19 restrictions started to ease in the industrial centre of the global economy.
Meanwhile, hints across the Atlantic that the US Federal Reserve might slow down interest rate hikes sent a small wave of optimism throughout the US markets, with the NASDAQ surging 3.3% to 12,131.1 and the S&P 500 rising 2.4% to 4,158.2.
“Risk is back in business it seems. Oil prices hitting $120 per barrel for the first time since March as Asian stocks followed Wall Street’s strong lead from Friday,” said AJ Bell investment director Russ Mould.
IAG shares soared 4.2% to 136p on the back of the half-term holiday hype, as UK consumers sought out sunnier skies on the cusp of summer.
However, airline companies face a challenge to regain their footing in the first proper year of commercial travel since the pandemic kicked off in 2020.
“The airlines are under a lot of pressure to get things right after a long period where their wings were clipped by Covid restrictions, they cannot afford to have a summer disrupted by technical and staffing issues,” said Mould.
Scottish Mortgage Investment Trust shares increased 3.2% to 820.4p as the heavily Asia-invested group benefited from the Asian market’s gains.
In addition, commodities firms rose as China’s reopening boosted hopes of demand, with Antofagasta gaining 1.5% to 1,492p, Croda climbing 2.4% to 7,053p and Anglo American increasing 0.5% to 3,825p.
Fashion shares also enjoyed a boost, after Rishi Sunak’s targeted profit levy on oil and gas companies announced on Thursday last week sparked hopes of increased consumer spending as a slight amount of pressure looked to be removed from struggling consumers.
JD Sports Fashion shares spiked 4.9% to 125.9p and Next shares gained 1.7% to 6,652p after weeks of being battered by the market as the cost of living soared on the back of 9% inflation. It’s possible that the slight relief provided by Sunak’s profit levy could boost consumer spending, however it’s unlikely to be an antidote as much as a band aid for the time being.