The FTSE 100 and European stocks are off to a good start, shaking off jitters around the looming energy crisis as investors eye a speech by US Federal Reserve chair Jerome Powell at the Jackson Hole symposium.
The FTSE 100 (^FTSE) rose 0.7% to 7,528 at the opening, while the CAC (^FCHI) in Paris advanced 0.53% to 6,415 points. In Germany, the DAX (^GDAXI) gained 0.50% to 13,338.
The UK’s blue-chip index extended gains, boosted by commodities and banking sectors, while shares of software firm Micro Focus (MCRO.L) soared more than 90% to lift the midcap index after a $6bn (£5.09bn) buyout deal.
Anglo American (AAL.L) climbed 2.5% after major copper producing country Peru abandoned a plan to hike taxes on the mining industry.
Pharmaceutical GSK (GSK.L) gained 1.9%, after Citigroup said it was on “a positive catalyst watch” following the Zantac legal developments that could materially reduce its exposure, compared to the $17bn that is discounted. GSK’s recently spun-off consumer health unit Haleon (HLN.L) jumped 3%.
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Looking ahead to Powell’s speech Michael Hewson chief market analyst at CMC Markets UK said: “Sometimes it pays for central bankers to be deliberately ambiguous when it comes to talking about monetary policy, in that it allows the flexibility to argue they’ve been misunderstood.”
“Previous Fed chairmen have employed this to good effect with Alan Greenspan once famously being quoted as saying ‘I know you think you understand what you thought I said, but I’m not sure if you realise that what you heard is not what I meant.'”
Deutsche Bank expects Powell to pull out his inflation-fighting credentials. “In terms of what to look out for today, our US economists don’t expect that Powell will deliver explicit guidance for the September meeting given that we’ve still got another jobs report and CPI print beforehand,” analyst Jim Reid said.
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“However, they do think he’ll likely to skew his remarks in a hawkish direction to ensure the Fed’s inflation-fighting credentials are unquestioned, not least after the comments from July were interpreted in a dovish light,” he added.
Meanwhile, Brent crude (BZ=F) is still at $100 a barrel, rising 1.27% on signs of improving fuel demand.
S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the red as trade began in Europe.
In Asia, Tokyo’s Nikkei 225 (^N225) climbed 0.57% to finish at 28,641 while the Hang Seng (^HSI) in Hong Kong gained 0.75% to 20,118. The Shanghai Composite (000001.SS) finished in the red, slipping 0.31% to close at 3,236 points.
On Wall Street, the Dow Jones (^DJI) was up 0.98% to close Wednesday at 33,291. The S&P 500 (^GSPC) rose 1.41% to 4,199 points and the tech-heavy Nasdaq (^IXIC) climbed 1.67% to 12,639.
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