The FTSE100 declined to the lowest level in two months. This is due to the Delta variant spreading and concerns that the economy’s growth was down. However, the FTSE100 recovered after mining, retail, and bank stocks pushed it.
On Monday afternoon, the index traded lower and dropped by 0.25%, but it managed to rebound by 0.5% later in the session.
Metals and banks were leading in the later session. Stocks of banks increased by 1.1%. Economist Catherine Mann agreed with interest-rate setter Jonathan Haskel that ending the stimulus relief too soon was not good. Catherin Mann is planning to join the Bank of England’s rate-setting committee soon.
Bank of England monetary policy members mentioned that the BoE might be cutting its stimulus programme.
The low-interest-rate has helped the FTSE 100 to gain 6.4% for the year. However, inflation passed the Bank of England’s target of 2% in May.
Combined with the surge in coronavirus infections, it has put pressure on the index. Inflation remains a worry as the economic rate is slowing down globally.
Stocks leading the FTSE100
Anglo American’s production output increased by 20% in quarter two, and the company’s stocks rose by 0.7%. The output was due to high diamond and platinum output.
Carnival Corp is hopeful that the rising Covid-19 cases will not dampen cruise travel. The company is planning to utilise 65% of its capacity by the end of 2021. The stock increased by 3.3%.
Sainsbury gained on Monday after news that private equity firms might acquire it. Apollo Global Markets, a US private equity firm, is rumoured to take over Sainsbury.
Sainsbury’s stocks were heavily shorted at the beginning of this year. However, a recent valuation of competitor Morrisons agreed to a £7 billion deal pushed the stock up. Sainsbury reached a seven-year high of 45.3p.
Even though UK retail sales were down by 2.5%, stocks of Marks & Spencer were up by 14%, rising on Friday.
The FTSE100 closed at 7112 on Monday and gained 1.1% for the session.