The FTSE 100 gained in slow trade on Monday as stocks took a break from the wild swings of last week and settled into range as investors awaited fresh catalysts.
After a tumultuous week for global equities last week, Monday’s session presented investors with trading conditions more typical of August. Having started the session around 0.4% higher, London’s leading index traded in a tight range of around 20 points with little in the way of major movers.
“A sense of calm has resumed across financial markets, helping to reverse the tumultuous trajectory of stocks witnessed over the past week. In sharp contrast to last Monday’s slide, the FTSE 100 has a spring in its step, easing into the green helped by gains in Asia and on Wall Street on Friday,” said Susanah Streeter, head of money and markets, Hargreaves Lansdown.
“The stabilisation of sentiment is continuing, following the sell off a week ago, as concerns about an American recession ease off a little. But with light trade volumes expected to continue due to the holidays, any whiff of unease could whip up fresh volatility.
“The latest inflation data in the US will be in sharp focus this week. With producer price numbers out on Tuesday and the headline consumer figure due Wednesday, investors will be keen for fresh clues about how deep interest rate cuts will be this year.”
BT was the standout performer on Monday, with a 6% gain, on the news India conglomerate Bharti was buying a 24.5% stake in the company from Altice.
“The news Indian telecoms firm Bharti is taking a major stake in BT is reflective of a big power shift between the two companies. Around the turn of the millennium, it was BT which had a substantial holding in Bharti, as well as two seats on its board,” said AJ Bell investment director, Russ Mould.
“Bharti is buying its stake from French telecoms tycoon Patrick Drahi’s vehicle, Altice, and the news will likely be greeted with some relief by shareholders as it holds the promise of a bit more stability.
“Drahi has been selling assets to pay down debt so his stake in BT represented a significant overhang on the shares.”
JD Sport, down 3.4% to 120p, was the top faller after Deutsche Bank cut its rating to sell with a 110p price target. JD Sports shares have failed to win back investor favour after cutting its profit outlook earlier this year. The biggest concern for investors of late has been Nike’s underwhelming performance. JD Sports is heavily reliant on Nike products for revenue, and a slowing Nike doesn’t bode well for JD Sports, which is eyeing rapid expansion in North America.