Friday 14 May 2021 3:53 pm

FTSE 100 rebounds from five-week low while Wall Street extends recovery

London’s FTSE 100 rebounded this afternoon as heavyweight financials stocks lifted the index after hitting a five-week low yesterday.

The blue-chip index rose one per cent during afternoon trading, with software firm Sage adding 3.4 per cent after forecasting a year of growth towards the top end of its range.

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Wall Street rallies

On Wall Street, indexes opened higher at the end of a volatile week marred by worries about rising inflation and a subsequent tightening of monetary policy.

The Dow Jones Industrial Average rose 0.7 per cent, while the S&P 500 shot up 1.1 per cent to 4,145.05.

Meanwhile, the Nasdaq Composite gained more than 1.8 per cent to hit 13,361.62 points.

US retail sales unexpectedly stalled last month as the boost from stimulus checks faded, but an acceleration is likely in the coming months amid record savings and a reopening economy.

The Commerce Department today said the unchanged reading in retail sales last month followed a 10.7 per cent surge in March, an upward revision from the previously reported 9.7 per cent increase.

Federal Reserve officials yesterday reiterated that price pressures from the reopening of the economy would be temporary.

“The Fed are seemingly doubling down on the transitory inflation message which will help the market in the short-term but creates more asset price risk if they are forced to admit that there is a permanence to some of the inflation further down the road,” Deutsche Bank strategist Jim Reid wrote.

Market movers

The afternoon’s biggest winner was City investment manager M&G, who rose 9.8 per cent, followed by Intermediate Capital Group, up by 5.7 per cent.

Energy firm SSE and fashion house Burberry also rose 3.8 per cent and 3.9 per cent respectively.

Mining giant BHP was the morning’s biggest faller, dropping by 2.8 per cent, followed by Rio Tinto’s 2.3 per cent hit.

Miners Fresnillo and Glencore both dipped by 1.3 per cent and 0.4 per cent respectively.

After rising nearly 11 per cent this year on economic optimism, the FTSE 100 has pared off some of those gains in the last few sessions.

The damage has largely stemmed from concerns that central banks could tighten their ultra-loose monetary policies sooner than expected to curb inflation.

Elsewhere, the domestically focused mid-cap FTSE 250 also rose 1.1 per cent, with asset firm Sanne jumping more than 22 per cent after rejecting a buyout offer.

Around the world

Chinese stocks climbed today as financial and healthcare firms gained, leading a rally in Asian markets as US Fed officials calmed inflation fears.

The CSI300 index shot up 2.3 per cent, while the Shanghai Composite rose 1.7 per cent to 3,488.24.

In contrast, Japanese stocks clocked their biggest weekly loss in nine months as rising Covid cases led to investors refraining from big bets, despite the Nikkei climbing 2.3 per cent today.

Elsewhere, the pan-European Stoxx 600 index rose 0.9 per cent, with travel and leisure stocks leading the gains.