Banks and commodities stocks put FTSE 100 on course for a strong end to the week as wages soar

“The FTSE 100 looked set for a positive end to the week, taking its cue from a strong finish to a turbulent trading session on Wall Street overnight,” says AJ Bell investment director Russ Mould.

“Commodities firms and financial stocks, the latter boosted by expectations of faster rate hikes, helped lead the charge higher.

“Investors continue to wrestle with the challenges posed by rising interest rates and surging inflation with the latest data on wages in the UK offering an indication of how entrenched inflationary pressures are.

“The fact the survey from the REC and KPMG showed starting salaries surging at the fastest pace in March since records began in the late 1990s might be cause for celebration for those in receipt of the bumper pay packets.

“However, the risk is even the most generous salaries will see their buying power severely pinched by the rapidly escalating cost of living.

“IT workers are probably top of the tree when it comes to their negotiating position but across the economy employees are struggling to fill roles – with both Tesco and Sainsbury’s announcing plans to boost their levels of pay.

“One area people do seem to be prioritising with their increasingly squeezed household budgets is holidays, the draw of a week in the sun particularly strong after the enforced hiatus imposed by the pandemic.

“This was reflected in bumper summer bookings for Jet2, which may also be getting some reward for doing rather better on customer service than some of its rivals.

“The deep freeze facing Russian companies continues as the US blacklisted the world’s largest diamond miner Alrosa and Deloitte resigned as auditor for UK-listed gold miner Polymetal.

“There was better news for Ukraine-based iron ore outfit Ferrexpo. Understandably the company’s priority is staff safety though, for obvious reasons, Kyiv is keen for it to continue to operate, with an economy battered by war needing all the tax revenue it can get.

“Ferrexpo’s production was remarkably down just 2% year-on-year in the first quarter – its operations are after all outside the main conflict zones.

“However with the limitations associated with exporting to Europe via rail and barge, management are understandably looking for alternative seaborne options while activities at its usual hub – the Black Sea port of Pivdennyi – remain suspended.”

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