FTSE 100 rises as European stocks ignore first-half selloff

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The FTSE 100 started July on the right foot. Photo: Dan Kitwood/Getty

European stocks started the week in the green as investors settle into trading in the second half of the year after a brutal first half that was marred by concerns over inflation, growth and the ukrainian war.

The FTSE 100 (^ FTSE) jumped 1.1% after the opening bell, the French CAC (^FCHI) was 0.8% higher and the DAX (^GDAXI) increased by 0.4% in Germany.

The London bluechip index was lifted by energy stalwarts Harbor Energy Plc (HBR.L), BP (BP.L) and hull (SHELL), which increased by 4.1%, 3.9% and 3.8% respectively.

Richard Hunter, Head of Markets at Interactive Investor, said: “Markets have generally started the new half more positively, perhaps boosted by portfolio positioning early in the quarter.

“In early trade, UK markets opted to bypass the Asian experience and took their lead across the pond. The FTSE 100 opened positively, driven largely by energy stocks and majors oil stocks in particular, leaving the index down just 2% year-to-date.”

It came as Europe’s biggest economy, Germany, recorded its first monthly trade deficit in three decades after exports fell unexpectedly in May. The German economy is strongly export-oriented.

The €1bn ($1.043bn, £860m) shortfall was the first since 1991 as cross-border sales fell 0.5%. At the same time, imports increased by 2.7%, more than expected.

This figure highlights the disruption caused by Russia’s invasion of Ukraine and China’s continued pandemic shutdowns.

Read more: Inflation: More than six in ten UK businesses are expected to raise prices

Across the pond, U.S. benchmarks reversed some of their recent losses on Friday, closing higher after posting the worst first half of any year since 1970.

Wall Street S&P 500 (^GSPC) advanced 39.95 points, or 1.1%, to 2825.33. The tech-rich Nasdaq (^IXIC) gained 0.9%, while the Dow Jones (^ DJI) climbed 1.1% on Friday.

Trading volumes are expected to be subdued on Monday as Wall Street indices are closed for Independence Day on July 4.

In Asia, markets diverged overnight as equities struggled to orient themselves amid recovery coronavirus lockdowns in China and lingering worries about a recession in America.

In Tokyo, the Nikkei (^N225) closed up 0.8%, while the Hang Seng (^HSI) fell 0.3% in Hong Kong and the Shanghai Composite (000001.SS) gained 0.5%.

China has reintroduced COVID lockdown measures in a country in Anhui province and renewed mandates for mass testing in parts of the country as infections rise.

Areas affected included Wuxi, an eastern manufacturing hub which also suspended food services at restaurants and advised people to work from home.

On Sunday, the country reported 385 new local cases of the virus, including 290 in Anhui. China reported a total of 183 new cases the day before.

Watch: What is a recession and how do you spot one?

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