FTSE nudges higher

Graphic of trading data chart
Fiona Cincotta
By :  ,  Senior Market Analyst

A turnaround in manufacturing stocks, particularly those supplying parts for the aviation industry, is helping lift the FTSE in a morning that is otherwise marked by trade that is slower than usual.

The two top gainers are aircraft engine manufacturer Rolls Royce and aircraft parts maker Meggitt, which is set to be delisted from the FTSE 100 after its shares crashed during the pandemic. The reopening of European borders and the start of the summer travel season is helping the two firms as are calls to remove the controversial two week quarantine on travellers coming into Britain which is threatening to annihilate Britons’ travel this summer.  

European stock markets are holding up surprisingly well given the underlying economic damage left behind by the virus. France expects its economy to shrink 11% this year and yet the CAC is trading close to 1.4% higher this morning as the reopening is capturing investors’ focus.

The DAX has also turned around to trade 3.3% higher after trading in the red for three consecutive sessions. Lufthansa played a major factor in both the decline of the index and this morning the turnaround was triggered by the German airline finally agreeing to €9bn bailout.

The turmoil in the US doesn’t seem to be affecting European stocks despite support rallies in London and Berlin but US investors will watch closely to see if President Trump decides to call in the military to quell protests.

Speculative trading in the oil sector is yet again moving to fever pitch as investors bet on OPEC and Russia agreeing to a new round of production cuts next week. Though this is far from given, Brent crude is nevertheless trading 2.5% higher while WTI is following closely with a 2.3% increase.

Related tags: Indices

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