Relaxation of Chinese Covid restrictions helps FTSE to further gains
The FTSE 100 ended the day up 65.09 points, or 0.9%, at 7,323.41.
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Your support makes all the difference.Commodity and defence firms led the gains as the FTSE 100 pushed higher for the third consecutive day.
Sentiment was supported by China’s decision to reduce the length of mandatory quarantine for inbound travellers, in the biggest relaxation so far in its zero Covid policy.
London’s oil majors had strong sessions amid hopes the relaxation will boost travel and trade.
The move is interpreted as a sign that things are moving in the right direction
“Even though the country still has measures in place, the move is interpreted as a sign that things are moving in the right direction, which has lifted sentiment across the board as stocks, oils and industrial metals are higher,” said David Madden, market analyst at Equiti Capital.
The FTSE 100 ended the day up 65.09 points, or 0.9%, at 7,323.41.
Traders were also positive elsewhere in Europe, as positivity around China helped the German Dax increase by 0.35% by the end of the session, while the French Cac lifted by 0.68%
In the US, there was a more downbeat tone as new data showed the sharpest rise in US consumer prices for more than four decades.
Sterling made slight gains as the US dollar stalled due to the unsettled economic backdrop.
The pound was up 0.03% against the dollar at 1.220 and was down 0.13% against the euro at 1.158.
In company news, utilities giant Pennon saw shares drop after regulator Ofwat revealed it is now investigating the group’s South West Water business over its environmental performance and sewage treatment works.
South West Water adds to a growing list of water suppliers to come under investigation as the watchdog probes how all wastewater companies manage their treatment works. Pennon was down 63p at 1,007p on Tuesday.
Other water firms including Severn Trent also slumped in value as a result.
Elsewhere, fintech firm Wise tumbled despite higher profits in an update a day after confirming its boss faces a City watchdog investigation after defaulting on his taxes.
The group reported pre-tax profits of £43.9 million for the year to March 31, up from £41.1 million, but also reported a surge in costs driven by marketing and administrative expenses.
Shares in the business fell by 56.7p to 316.4p.
Lateral flow test developer Abingdon Health shot higher after the York-based business said it reached an £8.9 million settlement with the UK Department of Health and Social Care after it said in March it still needed invoices to be paid dating back to January 2021.
Abingdon shares increased by 3.5p to 13p at the close of play.
The price of oil continued its latest rebound on the back of relaxed rules in China and agreements by the G7 leaders to work together on a price cap for Russian oil.
Brent crude increased by 1.94% to 117.32 US dollars per barrel when the London markets closed.
The biggest risers in the FTSE 100 were Rolls-Royce, up 5.33p at 87.14p, Prudential, up 43.5p at 1,052.5p, BT, up 7.35p at 192.3p, BAE Systems, up 28p at 826.6p and Harbour Energy, up 11.9p at 375p.
The biggest fallers of the day were Severn Trent, down 111p at 2,742p, Aveva Group, down 70p at 2,379p, Flutter Entertainment, down 224p at 8,506p, Entain, down 31.5p at 1,304p and Halma, down 40p at 1,996p.