Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

MARKET WRAP: FTSE finishes higher ahead of Fed, Brent hits $90/bbl

Published 26/01/2022, 16:17
Updated 26/01/2022, 16:22
© Reuters.

Key Points

  • FTSE 100 closing price of 7,470.1 (+1.3%)
  • Oil stocks higher as crude rallies
  • Travel stocks surge on recovery hopes
  • Fresnillo (LON:FRES) drops after Q3 results
  • USD higher ahead of Fed
  • Crypto rebound continues as Bitcoin breaks above $38K

By Samuel Indyk

Investing.com – The FTSE 100 finished higher on Wednesday with focus on the Federal Reserve’s monetary policy announcement at 19:00GMT. The Fed is expected to lay the groundwork for a rate hike as early as March due to rising inflation and an improving labour market.

Adding to the inflation picture is rising oil prices. WTI and Brent crude futures both surged on Wednesday, the latter hitting $90/barrel for the first time since 2014 as rising tensions in Eastern Europe continue to support prices. The escalating situation on Ukraine’s border with Russia has helped push prices higher with any conflict potentially having an impact on production. Russia is the third largest oil producer in the world, behind the US and Saudi Arabia.

The higher prices have helped push energy companies higher. BP (LON:BP) and Shell (LON:RDSa) were near the top of the blue-chip index with shares in both companies higher by over 3.5%.

Travel stocks were strong on hopes that the international travel recovery will continue apace this year. British Airways parent IAG (LON:ICAG) led the way higher following a positive note from Stifel Nicolaus, who named the company a “top pick”.

“We believe the combination of vaccinations, forthcoming COVID drugs, milder symptoms of the Omicron variant and increasing political laissez-faire sets the scene for a dynamic traffic recovery this summer and the crisis potentially moving to its end-game,” Stifel analysts said in a note.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Shares in silver and gold miner Fresnillo declined as the company highlighted production issues in the coming year. COVID continues to be a problem for the company with the disruption from the Omicron variant expected to continue in the first quarter of the year. The firm also highlighted new labour regulations in Mexico which meant higher turnover and staff vacancies.

The USD traded higher ahead of the Federal Reserve meeting with US Dollar Index above 96.00. GBP/USD was relatively flat and trading in a tight range as markets await the key monetary policy decisions from the FOMC.

Bitcoin and other major cryptocurrencies continued their rebound after hitting multi-month lows on Monday. Bitcoin traded back above $38,000 as US stocks also rebounded, with the S&P 500 up around 1.0% when European equity markets closed.

“The recovery in Bitcoin over the last couple of days has been really encouraging,” writes OANDA Senior Market Analyst Craig Erlam. “It's not out of the woods yet though and if broader risk appetite takes a hit, I'd expect bitcoin to suffer more. Whether that will see it test the crucial $30,000 region, only time will tell, but traders will be very relieved at what they've seen this week.”

One piece of Bitcoin news that some traders are focussing on is a snippet from Ark Invest’s Big Ideas for 2022. Cathie Wood’s firm said the price of Bitcoin could exceed $1 million by 2030 as the cryptocurrency is used in remittances, as EM currency, held in sovereign Treasury reserves and corporate Treasury, among other factors.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

------------------------------------------------------------

Subscribe to Investing.com UK here

------------------------------------------------------------

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.