FTSE 100 continues its bipolar trajectory as traders take their happy pills; Centrica boosted by Morgan Stanley upgrade

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The graph for FTSE 100 in the first week of the final quarter has resembled the outline of a rather tame roller coaster ride – probably one where’s there’s no height restriction.

For no sooner has the car nosed lower, then it lurches higher, but not too high.

For over a week now, the blue-chip index has been oscillating along a narrow band that periodically takes it (just) below the 7,000-mark before sense is restored.

One day the cocktail of higher energy prices, stagnant growth and Covid combined with the threat from the Chinese property sector collude to bring the market down.

But, such is the bipolar mood, that bargain-hunting tends to quickly reverse these declines – in the UK at least.

Thursday marked a positive start to proceedings, so traders looked to have taken their iodine.

The miners were in the box seat. Antofagasta, the Chilean copper giant, led the Footsie with a 4% gain, while Anglo American was up 2.8%.

Energy company Centrica was also among the risers with a 2.4% advance after a Morgan Stanley upgrade to ‘overweight’

6.50 am: Strong start expected 

The FTSE 100 is set to make a strong start to Thursday with sentiment buoyed by equity rallies in Asia and American politicians appear closer to approving the new, temporary, debt ceiling.

In the UK attentions remain on inflation, supply chains and the energy crisis. Nonetheless, the equity market has steadied off yesterday’s lows. For Europeans, attentions will later today be on the ECB which releases minutes from Thursday’s policy meeting.

CFD firm IG Markets sees London’s blue-chip benchmark rising more than 1% ahead of Thursday’s open, making a price of 7,063 to 7,066 with just over an hour to go until the open.

In America, Republicans and Democrats agreed to consider a stop-gap extension to the US borrowing limit until December, potentially breaking a deadlock and remove at least on layer of market risk for investors.

Elsewhere, bargain pickers can be seen in the market following this week’s weakness.

“Sentiment is rebounding in Asia this morning, with indexes up in the ballpark of 1-2.5% (China is still closed though) as investors buy the dip in tech,” Danske Bank analyst Aila Mhir said in a note.

“Optimism is extending into the US, with futures signalling another day of gains.”

Last night, on Wall Street, the Dow Jones closed Wednesday up 102 points or 0.3% at 34,416.

The S&P 500 similarly moved 0.4% higher to finish the session at 4,363 and the Nasdaq was slightly stronger still rising 0.47% to 14,501. The small-cap centred Russell 2,000, meanwhile, dipped 0.6% to 2,214.

In Asia, Japan’s Nikkei rose by 0.84% to 27,761 and Hong Kong’s Hang Seng was up 2.43% at 24,554, while the Shanghai Composite added 0.9% to 3,568.

Around the markets

The pound: US$1.3578, down 0.03%

Gold: US$1,757 per ounce, down 0.36%

Silver: US$22.54 per ounce, down 0.53%

Brent crude: US$80.79 per barrel, down 2.1%

WTI crude: US$76.79 per barrel, down 2.7%

Bitcoin: US$54,682, up 6%

Ethereum: US$3,530, up 1.76%

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were higher on Thursday after US Senate GOP leader Mitch McConnell on Wednesday offered a short-term suspension of the U.S. debt ceiling to avert a national default and economic crisis.

China’s Shanghai Composite rose 0.90% while Hong Kong’s Hang Seng index surged 2.45%

In Japan, the Nikkei 225 gained 0.74% and South Korea’s Kospi lifted 1.63%.

Australia’s S&P/ASX200 gained 0.70% to 7,256 with IT emerging as the strongest sector.

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