April 25, 2024

FTSE 100 Climbs as Miners Gain and Ted Baker Rises

On Tuesday, the benchmark share index in Britain closed near a peak of almost 10 weeks, as sterling results from the BHP Group triggered a rally in mining stocks.

Meanwhile, a buyout deal for Ted Baker also saw the fashion chain’s shares soar.

Shares rise

The UK FTSE 100 index, which is considered commodity heavy, recorded gains of about 0.4%. There was a 5.5% rise in the shares of BHP Group Ltd., which were listed in London.

This was after the largest miner in the world reported the strongest full-year profits it has recorded since 2011.

This was thanks to the rise in prices of coal, along with other commodities. These strong results also gave a boost to the company’s peers in the market.

These include Antofagasta, Glencore and Rio Tinto. There was also a 3.7% gain in the wider mining index.

Market analysts said that the commodity space had seen some volatility recently because of the economic concerns, but demand for alternate energy like gas and coal is high.

It is so because of the war between Russia and Ukraine, which has resulted in energy shortages. Analysts added that markets have a forward-looking nature.

Therefore, it is likely that investors would not pay much attention to weakening in the short-term and would focus more on a recovery in 2024.

Other factors

Ted Baker proved to be another bright spot for the markets, which saw its share price surge by 16.9% because of a deal with Authentic Brands.

The owner of Forever 21 and Juicy Couture announced that it would purchase the fashion chain for a deal that was valued at around 211 million pounds, or $254.26 million.

There has been an 8% rise in the FTSE 100 since March, when it had reached its lowest value for the year, and it is just 2% away from crossing its highest value of the year.

However, the FTSE-250 index, which is domestically focused, fell for the day by 0.2%, after there were signs of cooling in the super-hot labor market in Britain.

UK data

Data showed that the April to June quarter saw the number of people working rise by 160,000, as compared to the quarter earlier.

This was significantly below the increase of 256,000 that had been expected. Meanwhile, there was a 4.1% drop in earnings that were adjusted for inflation, making it the biggest drop seen since 2001.

Market analysts said that with margins getting squeezed in the winter season, it was likely that wage pressures would come down.

However, they added that the latest numbers did not have enough evidence to convince the Bank of England (BoE) in stepping back from an increase in interest rate by 50 basis points in September.

On Wednesday, consumer price data is due for release and investors would be scouring the numbers to get signs about the next move of the Bank of England (BoE).

An 83% possibility of a 50 basis points increase in the interest rate has already been priced in by money markets.

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