11th Oct 2021 12:04
(Alliance News) -Â London's FTSE 100 index was outperforming other European equity benchmarks on Monday, boosted by share price gains for big miners and oil majors on improved commodity prices.
The mood was subdued, though, with Wall Street futures painted red, amid caution ahead of the start of US third-quarter earnings season and key inflation data out later this week.
The FTSE 100 index was up 12.65 points, or 0.2%, at 7,108.20 on Monday at midday. The mid-cap FTSE 250 index was down 136.21 points, or 0.6%, at 22,399.96.
The AIM All-Share index was down 5.99 points, or 0.5%, at 1,205.54 - weighed down as ASOS shares tumbled 13%.
The Cboe UK 100 index was up 0.1% at 706.29. The Cboe 250 was down 0.9% at 20,194.35, and the Cboe Small Companies was flat at 15,531.53.
In mainland Europe, the CAC 40 in Paris was down 0.2%, while the DAX 40 in Frankfurt was down 0.3% on Monday.
London's blue-chip index outpaced counterparts in France and Germany thanks to its sizeable mining contingent.
"Lumber, iron ore, coal, and crude and all pushing into long-term highs today, highlighting how the commodities space appears to bring the greatest area of opportunity at a time when markets appear at risk thanks to surging inflation and the potential for a monetary squeeze," said Joshua Mahony, senior market analyst at IG.
Miner Glencore rallied to the top of the FTSE 100, up 3.6%. Peer Antofagasta was in second place, up 3.5%, and BHP Group rose 3.3%.
Oil majors also notched share price gains as crude pushed to fresh three-year highs. BP was up 1.8% at midday while Royal Dutch Shell 'A' and 'B' shares were both 2.0% higher.
Brent oil was trading at USD84.14 a barrel on Monday, higher than USD83.15 late Friday and topping the USD84 mark for the first time in three years.
Undeterred by the prospect of higher fuel prices, British Airways parent International Consolidated Airlines rose 1.9% as travel between the UK and dozens of long-haul destinations such as Mexico and South Africa opened up from Monday.
Forty-seven countries were removed from the red list, meaning arrivals from those locations will no longer need to spend 11 nights in a quarantine hotel. Countries affected by both the easing of travel advisories and the reduction in the red list include Argentina, Chile, Cuba, Indonesia, Mexico, Nepal, the Philippines, South Africa and Thailand.
Short-haul airlines such as easyJet and Ryanair also rose, up 2.5% and 2.0% respectively, on an improved outlook for the travel industry.
Back in the FTSE 100, UK lenders rallied as US banks are set to initiate the third-quarter earnings season.
HSBC was up 1.9% at midday. NatWest was up 1.9% and Barclays up 1.1%.
On Wednesday, financial firms BlackRock and JP Morgan Chase report results. Bank of America, Morgan Stanley and Citigroup follow on Thursday, and the week is capped off by Goldman Sachs on Friday.
"Expectations are high for those with investment banking operations, thanks to a boom in M&A activity," said Russ Mould, investment director at AJ Bell.
Wall Street was pointed to a weaker start to the week. The Dow Jones Industrial Average was pointed down 0.3%, the S&P 500 down 0.5% and the Nasdaq Composite down 1.0%.
As well as earnings, there is some key economic data points out later this week. Wednesday sees a US inflation reading, coming just days after Friday's disappointing nonfarm payrolls reading for September.
US producer prices are then out on Thursday, the same day that a Chinese inflation reading is due.
Sterling was quoted at USD1.3621 on Monday, soft against USD1.3645 at the London equities close on Friday. The euro traded at USD1.1559, easing from USD1.1578 late Friday.
Safe-haven assets weakened. Against the yen, the dollar rose strongly to JPY112.98 versus JPY112.03. Gold was quoted at USD1,755.50 an ounce, lower than USD1,759.55 on Friday.
Back in London, Britvic fell 5.7% after RBC cut the soft drinks maker to Sector Perform from Outperform.
On London's junior AIM market, shares in ASOS tumbled 13% after posting an annual profit hike, but warning on its outturn for the year ahead, amid supply chain issues and other cost pressures.
Revenue for the financial year to August 31 jumped 20% to GBP3.91 billion as retail sales grew 19% to GBP3.78 billion, while pretax profit rose 25% to GBP177.1 million.
However, adjusted pretax profit for the 2022 financial year is expected around GBP110 million to GBP140 million. This would be well below the GBP193.6 million registered for the financial year just ended.
ASOS flagged "notable cost headwinds", including inbound freight costs, Brexit duty annualisation, outbound delivery costs and labour cost inflation. It also said financial 2021 adjusted profit included a Covid-19-related tailwind of GBP67.3 million, driven by lower returns rates.
By Lucy Heming;Â [email protected]
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