The United kingdom’s FTSE 100 index has attained a new 20-month high in the wake of China Evergrande avoiding a destabilizing default for the third time over the past month.
The index that tracks blue-chip stocks surged 0.3% on Thursday, recording a value of 7,368.75 by press time, although retailers on the index recorded slowed growth. An overview of the index shows that it’s trading above the Simple Moving Average (SMA14) for the last six months, a positive indicator for future outcomes.
The index is also getting a push from rising commodity prices. At the same time, gold prices are rising despite the Sterling Pound struggling to find a positive outlook.
Online car marketplace Auto Trader Group (LON: AUTO) emerged as the top gainer at 10.3%, after the company recorded its highest-ever half-year revenue and profits, with precious metal miners gaining 3.0%.
Retailers record slowed growth
On the flipside, British luxury fashion brand Burberry (LON: BRBY) dropped 6.1% amid strained sales in Europe and Japan. Despite the drop, the company had previously surpassed its quarterly profit expectations. Although Burberry serves different firms with varied clients, it has yet to enthuse the market like competitors in the luxury retail segment.
Elsewhere, discount retailer B&M (LON: BMEB) also plunged 6.4% in the wake of recording lower first-half core earnings. BP (LON: BP) from the energy sector dropped 1.1% after its subsidiary, and Norway’s Aker (EPA: AKE) jointly sold a 5% stake in the Norwegian oil firm Aker BP (OTCMKTS: DETNF). Following the sale, the holding in the company was cut to 65%.
Elsewhere, Johnson Matthey (LON: JMAT) recorded one of the highest drops at 15.2% after it emerged the company plans to exit its battery materials business.
FTSE 100 struggling compared to peers
In general, the FTSE 100 continues to underperform compared to peers across Europe and the U.S. in post-pandemic recovery. Notably, the index has been hit by the global supply chain challenges, rising energy prices, and post-Brexit shortages of labor and inflation concerns.
For instance, the S&P 500 and other Wall Street indices continue to set record highs, mainly fuelled by expectations that the era of cheap money will last for some time. With the FTSE 100 aiming to gain a grip on the market, UK’s economy grew 0.6% in September and managed to beat analysts’ expectations.