FTSE 100 rises expected as Reddit retail activists target silver market and BP sells big stake in Oman gasfield

The FTSE 100 Index was set to make small gains in early trading today as it emerged that the Reddit groups of retail investors had been targeting the silver market for their latest attack.

Last week was dominated by so-called Reddit traders buying up share options in down-at-heel companies such as GameStop and American Airlines to drive the price up and force short sellers to have to buy stock to meet margin calls.

Today it emerged that they had moved on to exchange traded funds tracking the silver price in the hope that the rise would force those shorting them to buy into the metal in the same way.

The iShares Silver Trust had almost $1 billion of inflows of investment on Friday, according to its sponsor BlackRock, after a Reddit user posted on the WallStreetBets forum, urging people to buy shares and options in it to put a squeeze on banks.

US silver miners rose late last week and the trend was likely to continue in Europe today. FTSE 100 miner Fresnillo, for example, could see gains if the trend continues. 

Friday’s move of money into the Silver Trust was the biggest since it launched in 2006.

IG Index traders were pricing in small gains for the FTSE of 17 points to 6426. Asian markets were strong this morning and should follow through in Europe today, CMC Markets said. Its traders have the FTSE up 19 at the Dax in Germany up 119 at 13545 and France’s CAC 40 up 41 at 5440.

BP could gain after announcing early today it was to sell a 20% stake in Oman’s biggest gas project for $2.6 billion. Thailand’s PTTEP is to buy the interest in the site called Block 61, while BP will continue to retain 40% and keep operating the field.

Block 61’s first development phase, Khazzan, began producing in 2017, and Ghazeer, the second phase, late last year. 

Analysts are likely to see the sale a big step in BP’s divestment programme.

The week is likely to be dominated, however, by the Reddit traders’ impact on the financial markets after last week’s events saw stellar numbers from Apple and Microsoft overlooked. 

Analysts are concerned the Reddit impact’s "disruption of the old guard", as CMC Markets’ David Madden put it, would continue, with share prices losing touch with the fundamental strengths and weaknesses of companies and assets. 

Some investors would counter that big tech shares lost touch with reality long ago. 

Amazon and Alphabet - Google’s owner - post their numbers this week, Madden reminds us.

AstraZeneca shares will be under the spotlight again as the European Union seeks to blame it for the Commission’s failures in providing adequate Covid vaccines. Its shares fell from 7966p to 7491p during the ruckus last week that saw the EU accuse it of lying about production levels so it could sell more to the UK, and having a vaccine that was relatively ineffectual for older patients.

On Friday, France’s President Macron claimed the AstraZeneca vaccine was “quasi ineffective” in over 65s or even over-60s. Germany is restricting its use to younger members of the population.