FTSE 100 On Track for Strong Finish to Week

The FTSE 100 is on track to finish the week strong, in spite of gains in the pound, as rising oil prices and a period of calm after political drama helped to bolster the stock market.

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shareprices.com - Saturday, June 17, 2017

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The FTSE 100 has inched back towards the 7,500 mark, while the FTSE 250 was making even stronger gains during the first few hours of trading, after Thursday proved to be the worst day of 2017.

Oil prices contributed to the gains, as both Royal Dutch Shell and BP gained over 1.1 percent. Gold prices increased as well, with Randgold Resources and Fresnillo profiting from that.

The index made some gains last week in the aftermath of the general election, which saw the conservative government fail to secure a majority. The pound’s value fell, and this boosted FTSE 100 companies. Now that the pound is recovering, many would expect that the FTSE 100 would struggle, but it has not done so. The most recent gains came in spite of a stronger pound - which is a traditional drag on the FTSE.

The pound gained because of the Bank of England’s monetary policy announcement on Thursday, which shocked investors as the bank took no action on key interest rates. Three out of eight economist on the committee voted to raise interest rates in spite of higher inflation, and this boosted the yield on gilts, as well as the value of the pound, as investors responded to the hawkish viewpoint.

 

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