The FTSE 100 index is ending a turbulent week back where it started as sentiment continues to improve after Monday’s stock market rout. Stronger mining stocks helped London’s top flight to put on 0.4% or 33.89 points at 8178,86, having been as low as 7923 on Monday due to a combination of US recession jitters and a 12% slide for Tokyo’s Nikkei 225.
Leading Wall Street benchmarks closed sharply higher last night after better-than-expected jobless claims figures eased concerns that the world’s largest economy is set for a hard landing. The VIX index, which is a gauge of investor uncertainty, has also recovered after jumping 181% at one point in the stock market slump.
It peaked at 65.73, with the eventual 65% increase at Monday’s US close higher than any movement during the global financial crisis. The fear index closed last night at 23.79.
UBS Global Wealth Management said market volatility could remain elevated for some time, particularly as liquidity is typically thinner over the summer.
However, it added that much about the backdrop remains positive: “Although the US economy now looks to be growing at a rate slightly below trend, fears of a recession look premature.”
The focus of investors now shifts to economic releases next week, including the inflation reading for July and retail sales.
Anglo American led London’s mining sector as shares rose 2.5% or 58p to 2280p, while copper miner Antofagasta improved 37.5p to 1851.5p.
Glencore also lifted another 8.7p to 411.9p following this week’s decision to retain its coal operations, a move that should accelerate returns to shareholders.
Other blue-chip stocks with momentum included Ladbrokes owner Entain, which put on 19.8p to 569.8p following yesterday’s upgrade to full-year guidance.
Outside the top flight, Deliveroo continued to attract interest after yesterday’s first profit and accompanying £150 million share buyback announcement.
Today’s rise of 4.8p to 145.7p means the value of the food delivery platform has jumped by a fifth in the past week. UBS today reiterated its Buy recommendation and upped its target price to 257p from 217p previously.
