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FTSE 100 rises further above 7000 after shops and pubs enjoyed strong sales over sunny weekend

Jim Armitage
·3-min read
<p>Shops enjoyed a busy weekend </p> (PA Wire)

Shops enjoyed a busy weekend

(PA Wire)

The FTSE 100 Index rose further beyond the 7000 level it achieved last week today as packed high streets and bars over the sunny weekend set an optimistic tone for the economic recovery.

London shares have made strong progress in recent months due to the rise in the price of oil, which has boosted its energy and minerals-heavy constituents despite the disruption of Brexit.

Today the FTSE gained 16 points to 7035.65 in what was a fairly quiet start to the week for markets.

Footfall was said to have been strong at malls and high streets over the weekend, with out-of-fashion retail parks appear to be having something of a renaissance as families consider them relatively Covid-safe due to the extra space and ease of travelling by car rather than using public transport to get there.

Big, shed-like retail outlets should be beneficiaries, such as B&M, which was up 2% this morning.

Moody’s, the credit research group, today said consumers around the world have collectively built up $5.4 trillion of savings during the pandemic and are now becoming increasingly optimistic about the economic outlook.

That should mean an unprecedented boom of spending is somewhere around the corner in all international consumer stocks and should boost demand and production of consumer goods from cars to clothing.

Investors have to decide whether that is all in the share prices of such companies already, or whether the rebound rally is yet to come.

In the shorter term, new Covid variants could put a dampener on the animal spirits in the market as health officials in the UK spent the weekend expressing fears about the new Indian variant of the disease.

The B.1.617 variant has been spreading rapidly in India recently and has turned up in 77 cases in the UK, the majority of whom have come from India.

Rio Tinto’s shares may react this week as hopes of future riches from its vast Oyu Tolgoi project in Mongolia are coming to a critical phase.

The company’s copper mine there is its most important prospect but has been held up due to controversies in the country, including corruption allegations surrounding local businessmen and officials alleged to have failed to secure a big enough share of the proceeds for the country.

Rio officials were in the country last week attempting to negotiate a deal that could see complex caving operations begin later this year. The Mongolian government has a 34% stake in Oyu Tolgoi for the project which is over $1 billion over-budget and more than a year behind schedule.

Rio shares were up 0.4% today amid hopes it will get a deal done with the government.

Other big risers of the session were led by by Ocado, up 3% and Rolls-Royce, up 2%, on what was a mixed session with few obvious themes. Precious metals stocks Fresnillo and Johnson Matthey were up 2% in a strong market but oil stocks Shell and BP were both down 1% on a flat day for Brent Crude.

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