Rally picks up steam again

In mid-morning trading the FTSE 100 is 60 points higher as a slew of good results, oil strength and dollar weakness clear the path for equities, says Chris Beauchamp, senior market analyst at IG

Rally picks up steam again

Stock markets have acquired a healthy glow this morning, with indices putting in good gains across the board, building on the strong session for the US last night.

Buying momentum has been mounting for some days now, but last week ongoing USD strength held back any rallies. Now the dollar looks to be heading southward, and this has given the bulls the opening they needed. Buffett’s Apple manoeuvrings will have tempted a few more buyers into the water, while the ongoing recovery in oil prices will add to the feeling that there is at least one more surge left in this rally before the summer kicks in.

Taylor Wimpey’s decision to boost the dividend payout has given housebuilders a shot in the arm this morning, providing a fresh piece of good news for a sector that has, of late, lacked a really compelling narrative for investors to chase the multi-year rally.

Vodafone’s earnings had their ups and downs, but overall the steady increase to the payout, plus a gradual rundown of the heavy investment programme, has reassured income hunters that for now the stock remains one to hold for the dividend.

Price growth has been very much in focus in stock markets today, with UK CPI taking some of the strength out of the rally in cable. However, with a firm bounce now in play, and receding fears about Brexit thanks to the latest round of polling, we could see sterling take full advantage of USD weakness.

US CPI is out later today, and will need to show hefty improvement to avoid further falls in the greenback ahead of the Fed minutes tomorrow.

Ahead of the open, we expect the Dow to start at 17,742, up 32 points from last night’s close.

Enter your e-mail address to receive updates straight to your inbox

My Newsletter

You can easily unsubscribe at any time by clicking on the unsubscribe links at the bottom of each of our emails

About Author