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FTSE just shy of 7,000 as strong trading updates drive market surge

London’s top flight closed 117.15 points, or 1.7%, higher at 6,998.28 on Wednesday.


London stocks bounced higher on Wednesday (Ian West/PA)

London stocks bounced higher on Wednesday (Ian West/PA)

London stocks bounced higher on Wednesday (Ian West/PA)

The mood change in London’s leading markets gathered pace on Wednesday as strong performances by retail, airline and engineering stocks boosted the FTSE.

A fresh wave of better-than-expected company updates helped replace caution over rising Delta variant cases with optimism over increased consumer spending.

The FTSE 100 made great strides to lift over 7,000 again for a brief spell, but cooled before the close.

London’s top flight closed 117.15 points, or 1.7%, higher at 6,998.28 on Wednesday.

Chris Beauchamp, chief market analyst at IG, said: “Tuesday’s rally has extended into a second day, and Monday’s sudden drop looks more and more like a sudden air pocket that produced excitement but little lasting impact.

“‘Global rebound’ certainly appears to be the theme among the leaders on the FTSE 100, as the market’s outlook swings back to optimism from Monday’s pessimism.

“Rolls-Royce, IAG and Compass Group are all good names to pick for those looking for a renewed economic recovery, while retail landlords like Land Securities and British Land should see further inflows if more retailers post updates like the one from Next this morning.”

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Europe’s other major markets followed suit and bounced back after a few tough sessions to boast strong gains.

The German Dax increased by 1.36% and the French Cac moved 1.85% higher.

Across the Atlantic, the Dow Jones fed off European optimism to make further gains in the early session, having already wiped Monday’s losses in the previous trading day.

Meanwhile, sterling delivered a resilient performance after tumbling to a five-month low on Tuesday, with negative noises surrounding the Northern Ireland Protocol starting to become background noise.

The pound was up 0.15% versus the US dollar at 1.369 and was 0.1% higher against the euro at 1.160.

The price of oil started on a recovery move after hitting a two-month low on Tuesday in the face of a surprise rise in US inventories.

Brent crude rose by 3.88% to 72.04 dollars per barrel.

In company news, fashion proved to be in vogue for investors as Mulberry and Next both saw shares soar.

The maker of handbags said that it has swung to a £4.6 million profit before tax for the last financial year, compared to a nearly £48 million loss in the 12 months before.

Its 7% share price hike was edged out by a buoyant Next, which rose 7.5% after it revealed that profits are set to beat expectations as sales rose to above their pre-pandemic levels.

However, both were beaten by Bridgepoint as the private equity company’s shares ended the day at 452p, more than 29% higher than its initial public offering price.

Bloomsbury’s strong performance among Harry Potter fans and others helped push its shares up by 3%.

Wickes said that sales increased by around a third in the first six months of the year. Its shares rose by 2.1%.

Nichols’ shares rose 2.6% after it reported a strong showing for Vimto.

Bottom of the FTSE 100 was Royal Mail, which reported a 7% drop in UK parcel volumes. Shares dipped 2.7%.

The biggest risers on the FTSE 100 were Rolls-Royce, up 6.98p to 97p, Next, up 552p to 7,946p, Whitbread, up 173p to 3,012p, Compass Group, up 79.5p to 1,492p, and IAG, up 8.96p to 169.42p.

The biggest fallers on the FTSE 100 were Royal Mail, down 14.4p to 516.2p, United Utilities, down 29.5p to 1,538.5p, Avats, down 8.6p to 581.4p, Hikma, down 23p to 2,603p, and Fresnillo, down 6.4p to 762.6p.