Key Points
- FTSE 100 closing price of 7,133.55, +0.64%
- Sanne Group jumps after agreeing to takeover talks
- USD strong, GBP mixed after record GDP
- Crude jumps to multiyear highs
- Bitcoin and other cryptos steady heading to the weekend
By Samuel Indyk
Investing.com – The FTSE 100 finished the week on a high note on what was a particularly quiet day following Thursday’s ECB interest rate decision and US inflation print.
Most major global indices were trading higher as markets seemingly believe the Fed when they say they will look through any rise in inflation and continue with their money printing programme.
“Perhaps central banks really have convinced the markets that any rise in inflation will be short-lived and will not force them to ramp up rates too rapidly,” AJ Bell investment director Russ Mould said in an emailed note.
Shares in Sanne Group (LON:SNNS) rose to the top of the FTSE 250 after the coming agreed to enter buyout talks with private equity firm Cinven, who had made a fifth proposal to buy the company. This time, Sanne said they would enter discussions after Cinven lifted their bid to 875 pence per share.
“Having firmly rejected the previous four offers, the move suggests the Sanne board are now at least willing to consider a sale,” said Hargreaves Lansdown (LON:HRGV) equity analyst Nicholas Hyett. “Whether Cinven will need to put a cherry on top of their 875p a share offer to get the board to bite remains to be seen.”
GBP was trading soft against the USD but broadly flat against the EUR after UK April GDP data pre-market. The Office for National Statistics said the economy grew at its fastest monthly pace since July as sectors of the economy continued to reopen following the strict lockdown measures at the start of the year.
“The economy grew by 2.3% m/m in April – building on recent gains seen across February and March – to leave activity just 4% below its pre-pandemic level,” Lloyds (LON:LLOY) Bank analysts said in an emailed note. “A very marked improvement from the low point last April where the economy was ~25% smaller than at the start of 2020.”
The data couldn’t do much to lift GBP with GBP/USD falling back towards 1.4100 and EUR/GBP trading steady below 0.8600.
WTI and Brent crude futures continued their march higher with both trading at multiyear highs. Brent moved to its highest since May 2019 while WTI was its best level since October 2018.
The improving demand picture continues to support prices with analysts at Goldman Sachs (NYSE:GS) saying they expect Brent to hit $80 this summer as economic activity picks up.
Even cryptocurrencies ended the week with a relatively dull note with Bitcoin hovering around the $37,000 heading into the weekend.
“Bitcoin remains stuck in no man’s land,” said OANDA senior markets analyst Edward Moya.
Other cryptocurrencies were showing similar price action although some weakness was observed in Ethereum which dropped back below $2,500.
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