The FTSE 100 is up by 1.48% on Wednesday as the index sustained positive momentum for a second day in a row. At 6,986.27 points, the FTSE 100 is closing in on the 7,000 marker again.
“Yesterday’s market rebound was welcome, but also raised questions as to whether it was a dead cat bounce,” said Russ Mould, investment director at AJ Bell.
“Helping to focus investors’ minds on stock opportunities and divert attention away from general worries about the economy and inflation is a step-up in companies reporting their latest earnings.”
Across the board, there was a sense that investors were regaining their appetite for higher risk stocks, with notable gains among airlines, transport operators and leisure companies. Cineworld rose by nearly 8%, while Trainline advanced by 5.7% and EasyJet is up 3.6%.
“Across the FTSE 350, Next surprised the market with better than expected figures, so did media group Future which anticipates its full year profitability to be materially ahead of current market forecasts,” Mould said.
The question now is whether another day of positive news can serve to lift sentiment for a sustained period.
FTSE 100 Top Movers
Next (9.02%), Rolls-Royce (6.59%) and IAG (5.98%) led the way atop the FTSE 100 on Wednesday, each making outstanding gains.
At the other end, Avast (-1.63%), Royal Mail (-1.51%) and National Grid (-0.58%) were the biggest fallers out of only five companies in the red during the morning session on Wednesday.
Royal Mail
Royal Mail (LON:RMG) revealed its parcel deliveries slowed during the previous quarter as the pandemic-induced boom in online sales lost some momentum.
However, the parcel delivery company also suggests that the trend established during the pandemic is here to stay.
The FTSE 100 company’s revenue during the quarter ending in June 2021 is up by 12.5% from the year before. When compared to the same period in 2019, before the pandemic, it has increased by 20.2%.
Next
Next raised its profit guidance on Wednesday as pent-up demand for its clothes combined with periods of warm weather saw it easily surpass its sales forecast over the previous 11 weeks.
The UK fashion retailer’s sales jumped by 18% over the past 11 weeks to July 17 when compared to the same time period two years ago, before the pandemic.
“Consumers have had the need and means by which to go on a spending spree, and that’s created a tailwind for Next. The retailer has a habit of beating expectations and its latest update is true to form,” says Russ Mould, investment director at AJ Bell.
