The FTSE 100 traded within a tight range on Monday as investors digested positive developments from the China/US trade talks.
London’s leading index was marginally higher on Monday, trading in a tight range between 9,660 and 9,635—the top end of this range was a fresh intraday record high. A close above 9,645 would be a fresh all-time closing high.
“Optimism about the potential for a US-China trade agreement was helping to create a cautiously positive mood in markets at the start of the week,” says AJ Bell investment director Russ Mould.
“In the UK market, the mining sector moved higher, bar the precious metal contingent who were hit by lower gold prices, although negative news for index heavyweight HSBC acted as a drag on the FTSE 100.
“A milder than expected reading of US inflation at the end of last week also proved supportive to sentiment. Although investor confidence may be tested during a busy week for corporate news across the Atlantic, including earnings from the likes of Microsoft, Apple, Amazon and Meta.”
US futures showed more signs of life than the FTSE 100, and the S&P 500 looked set to open higher by more than 0.5% at a new record high.
HSBC was the standout detractor in London. Although the stock was only down 1%, its large index weighting meant news of a $1bn provision relating to the Bernard Madoff scandal offset gains elsewhere.
“As Halloween approaches, an episode out of what feels like the dim and distant past has returned to haunt HSBC and hardly set the scene for the bank’s third-quarter update tomorrow in a way it would have wanted,” Russ Mould said.
“A ruling from Luxembourg’s highest court on a lawsuit, brought by investors who lost money in Bernard Madoff’s multibillion-dollar Ponzi scheme, will see HSBC set aside a material sum.”
HSBC was joined by precious metals miners Fresnillo and Endeavour towards the bottom of the leaderboard as gold prices fell again.
Thankfully, the risk-on sentiment was felt in diversified miners, banks and the Polar Capital Technology Trust, which is proving to be a great way for UK investors to gain exposure to leading US technology companies and the AI trade.
Glencore was the FTSE 100’s top riser with gains of 2%.