FTSE rallies to snap eight-day losing streak
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Loading... - PATRICK PHELPS
- 15 Dec 2020
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Britain's top share index rose on Tuesday after eight straight sessions of falls, with supermarkets, commodity stocks and firms with South African exposure among the companies to rebound from recent weakness.
The FTSE .FTSE rose 1.9 percent to 5,983.52 points by 1218 GMT, having fallen 8.5 percent in the eight days previously.
Supermarkets were among the top performers, led up by a 4.3 percent rise in Sainsbury's (SBRY.L), which industry data showed outperformed its major rivals over the last three months. Tesco (TSCO.L) and Morrisons (MRW.L) also rose 3.6 percent and 4.2 percent.
While the groceries market remains subdued, some believed that stock falls of over 10 percent since November had been overdone as retailers head into the busy Christmas period.
"It makes sense that Sainsbury is the top riser of the three, as the only one to see improvement. There was no real good news for Tesco at all, but people are hoping that a decent bit of Christmas shopping will lift these supermarket names," said Chris Beauchamp, market analyst at IG.
"People are prepared to go bargain-hunting in supermarkets in what is a key period for the sector."
Anglo-African financial services firm Old Mutual (OML.L) rose 6 percent, the index's top riser, following a 1.3 percent gain on Monday that analysts said had been curbed by a soggy broader market.
It continued to benefit from improved appetite for stocks with South African exposure, after the appointment of Pravin Gordhan as finance minister, lifted the rand from record lows.
British stocks came under pressure on Monday after oil lurched to its lowest levels for 11 years. Brent steadied on Tuesday after regaining ground overnight, which helped Wall Street higher and boosted appetite for stocks.
Analysts said that a glut in supply which has pushed oil prices lower would persist into the end of the year.
"We are maintaining an overall underweight position in the commodities sector based on our view that oversupply is likely to persist for now," Michael Stanes, investment director at Heartwood Investment Management said in a note.
But he added that the likes of Glencore (GLEN.L), BP (BP.L) and Shell (RDSa.L) had demonstrated the ability to manage the challenging commodity environment effectively, leaving opportunities in the London-listed market.
Mining companies were also boosted by the EU announcing plans to register Chinese and Russian steel imports, which could result in duties. Glencore (GLEN.L) led the sector higher, gaining over 5 percent on the back of an upgrade from JP Morgan.
