By Patrick Munnelly, Market Analyst, Tickmill
The FTSE 100 continues to trade with an upbeat tone as the UK benchmark opened in the green for a seventh straight session.
The early advance has faded to trade just below the flatline as London traders head for the exits with losses of circa 0.5%.
On the positive side of the ledger for the day was decent support seen for the mining sector following news of Glencore’s LON:GLEN hostile bid for Canada’s Teck Resources yesterday. The financial sector was pushing ahead too, on news of Rathbone Group LON:RAT popping 2.3% as the wealth management provider announced the purchase of the Investec UK wealth management business in an all share transaction valuing the acquisition at £839 million. This added 2.9% to Investec [LON:INVP] shares.
On the negative side of the ledger, there were a couple of notable underperformers.
OKYO Pharmaceuticals LON:OKYO plunged over 14% at the open as the bio-pharma is set to delist from the LSE at the end of the month given poor performance in trading volumes and valuation.
Saga LON:SAGA shares were shunned by investors, shedding 8.3% following official confirmation that its proposed sale of its Insurance business to Australia Open had been terminated, leaving the seniors holiday group left holding a business unit that has been mired by higher claims inflation.
Tackling inflation
Speaking of inflation, the Bank of England’s Tenreyro, made remarks earlier where she confirmed her dovish tilt, suggesting that a looser monetary stance was now needed, contrary to official monetary policy, which is premised on creating tighter fiscal conditions to battle inflationary pressures,
Tenreyro posited that interest rates should be reduced as soon as possible, as she deems inflation to have already peaked and as such naturally heading below the banks 2% target level.
Countering Tenreyo’s dovish perspective is commentary from Bank of England’s Pill stating that ‘given the MPC’s mandate, CPI inflation will revert to 2% over time. But it is taking longer to return to target than was originally expected, and longer than is desirable’.
The FTSE-100 index closed the day on 7634.52, down 0.50%.
