FTSE subdued despite US stocks hitting new records

“Despite another strong finish for US stocks overnight – with the Nasdaq and S&P 500 hitting new record highs – the FTSE 100 was only up modestly at 6,090.47 on Wednesday", says AJ Bell Investment Director Russ Mould.

“In microcosm this matches the trend of the last six months with the FTSE 100 struggling to keep pace with the rally in global equities.

“Since the Covid-19 correction bottomed out at the end of March the FTSE 100 is up 21.8% against a 49.1% advance for the FTSE All-World index and a 51.5% surge in the S&P 500.

“Investors weighed a surprise jump in UK inflation for July to 1% and – as if commuters needed another reason to extend working from home – rail fares will increase in January thanks to the rise.

“Although the figures reflected some increase in activity in the economy, oil prices seemed to be the main contributor as their recovery from March lows contributed to an increase in the price at the pumps.

“Global benchmark Brent Crude remains above $45 per barrel but has dipped from recent highs. Given oil fell ahead of stocks when the pandemic emerged earlier in 2020, there will be plenty of attention on what direction it takes next.

“Having briefly touched the $2,000 per ounce mark again gold prices beat another retreat to around $1,980 per ounce as risk appetite continued to wax and wane.”

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