FTSE 100 wipes out all of its Monday losses

Published On: January 12, 2022Categories: Stocks & Shares1.8 min read

The benchmark FTSE 100 was around 0.7% higher at 7,496.21, above the 7,485.28 level at which it started the trading week

The FTSE 100 clawed back all of its Monday losses on Tuesday as investors looked for oversold bargains and took a more sanguine view of inflationary pressures and potential rising interest rates.

At 1pm, the benchmark FTSE 100 is around 0.7% higher at 7,496.21, above the 7,485.28 level at which it started the trading week. Mid-caps are also making robust gains, with the FTSE 250 roughly 0.5% ahead at 23,119.22.

Europe’s stock markets are also on a positive footing ahead of New York’s opening later this afternoon, with the Euro Stoxx 50 rallying nearly 1.2% at 4,287.97.

US stocks are expected to open higher, supported by a recovery in tech after a rough start to the year due to inflation concerns and looming interest rate hikes.

Futures for the Dow Jones Industrial Average added 0.14% in pre-market trading, while the broader S&P 500 index gained 0.25%. Nasdaq 100 futures indicate roughly 0.35% gains.

Profit upgrades from the likes of FTSE 100 components company Electrocomponents (ECM) and cyber security firm Darktrace (DARK) brightened investors’ mood ahead of the release of key US inflation data on Wednesday.

The consensus forecast is for inflation to have hit 7.1%, meaning all eyes will be on the Federal Reserve and how quickly it plans to take action to try and curb the high cost of living.

Among blue chip names, Scottish Mortgage Investment Trust (SMT) rallied nearly 4.5% to £11.885 following recent weakness caused by concerns over how rising interest rates would affect valuations for the fast-growth stocks it favours.

Electrocomponents gained 2% to £12 as the industrial and electronic equipment supplier upgraded its full year profit outlook after third quarter revenue grew by more than a fifth, driven by performance in the Americas.

Dechra Pharmaceuticals (DPH) improved 3% to £44.24 as the veterinary pharmaceuticals giant agreed to acquire the worldwide rights to Anivive Lifesciences’ canine lymphoma treatment in dogs for an undisclosed sum.

Cyber security company Darktrace surged 11% to 438.2p after raising its guidance on annual performance following ‘significant’ growth in the first half to December 2021.

Digital transition company Kainos (KNOS) gained 2% to £16.60 as investors welcomed the acquisition of Blackline, a US-based services firm that focuses on procurement, for an undisclosed sum.

Fantasy miniatures maker Games Workshop (GAW) softened 0.4% to £97.20 after its first half profit slipped, despite a rise in revenue, thanks to higher costs including staff wages, though Games Workshop raised the interim dividend by 25% to 100p per share.

About the Author: Jonathan Adams

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