The FTSE 100 is continuing its strong performance today, inching past yesterday's 7545 highs to 7549 and extending its 10 per cent late-March reversal into May.
The slip in sterling as well as a drop in UK manufacturing activity have helped buoy the London market, as have Sainsbury’s shares which have continued to rally in the wake of a proposed merger with Walmart-owned Asda, with the company’s stocks up 1.6 per cent.
Shares in BP have also rallied, up nearly 10 points after big gains yesterday. However, British American Tobacco (BAT) shares have tumbled back below £40 after a brief rally yesterday.
Read more: What you need to know before the open
“Management at BAT will doubtless be hoping that tomorrow’s services PMI reflects today’s manufacturing weakness, and that next week’s Bank of England meeting strikes a decidedly dovish tone,” said Chris Beauchamp, chief market analyst at online trader IG.
Overnight, US markets edged higher on opening, but fell shortly after.
Jasper Lawler, head of research at London Capital Group, said: “Not even a flurry of M&A activity was enough to keep Wall Street afloat as investors continued to fret over higher inflation expectations and a more aggressive Fed."
However, with Apple set to report its first quarter profits today, Wall Street is in for an interesting day as investors scrutinise how much sluggish iPhone sales will affect the company’s performance.
“Earning season so far has produced some solid results,” said Lawler. “Even the market leaders, the FAANGS (Facebook, Amazon, Apple, Netflix and Google parent Alphabet) of those that have reported have updated with robust numbers for both top and bottom lines.”
The US dollar has remained strong as well, ahead of another policy update from the Federal Reserve tomorrow night.