FTSE 100 rises as world markets touch record highs

Storms may be brewing around the world, but investors appear to have hit an optimistic streak.

A rally in global stocks left markets within touching distance of record highs seen in February – helped in part by tech and oil stocks.

Hurricane Laura is bearing down on key refining facilities on the US Gulf Coast and has pushed crude to near five-month highs, up $0.16 at $46.02 today. The S&P500 and Nasdaq closed at record levels again, while markets in Tokyo, Hong Kong and Shanghai saw stocks stall just below their all-time highs, slipping back slightly.

In the UK, Storm Francis is busy battering the country as gusts reach nearly 80mph, but the tumult hasn’t reached the Square Mile, with the FTSE 100 expected to open up a modest 10 points at 6047.

CMC markets chief market analyst Michael Hewson said: “The outperformance of US markets is also no doubt being helped by optimism ahead of Federal Reserve chairman Jerome Powell’s speech later this week, which is likely to reinforce the US central bank’s commitment to do whatever it takes to support the US economy, at this very challenging time.”

“The Fed has all but guaranteed that rates are going nowhere for at least two years,” Eleanor Creagh, a market strategist at Saxo Bank told Bloomberg. “Equity remains the place for investors to escape the secular stagnation that we’re seeing within the real economy that this zero-yield world produces.”

US consumer confidence dropped in August to the lowest since 2014 as Americans grapple with high unemployment and uncertainty about future federal stimulus.

As the US presidential race steps up a gear, Hewson added: “US economic data continues to paint a mixed picture of the US economy, with consumer confidence sliding back sharply in August to its lowest level in six years, over concerns about the state of the US economy, the outlook for jobs against a backdrop of partisan politicians, and the recent lapsing of the $600 a week unemployment enhancement, which has restricted the ability of US consumers to spend any more than they have to, to get by.”

Corporate news was expected to be thin today, with first-half results from doorstep lender Provident Financial and miner Polymetal International.

With Britain in recession, trading could be mixed for Provident which could see making recoveries of loans more difficult with people losing their jobs, but an increase in those in financial distress could equally lead more consumers to turn to less away from High Street banks for loans.

Bank of England chief economist Andy Haldane is set to appear at the Edinburgh International Culture Summit Webinar at 5pm, after the markets close, and investors will be watching any comments on the potential speed of Britain’s economic bounceback from the Covid crisis.