Market update: Fresh wave of enthusiasm washes over FTSE 100
Susannah Streeter, chief investment strategist, Wealth Club: ‘’The FTSE 100 is sailing ever higher on a big wave of enthusiasm for London listed stocks. The blue-chip index has opened at fresh record levels. It’s been on a breathtaking run upwards, accelerating its surge higher since the start of the year, rising by more than 9%. Momentum appears to be on its side with the psychologically important 11,000 mark now in its sights. Its mining constituents have been benefitting for demand for metals in particular, as signs indicate that a commodities super-cycle is underway, with huge demand for metals and minerals needed to power the green revolution and build AI infrastructure. Geopolitical tensions and rising debt levels are keeping demand for safe precious metals intact, while defence contractors continue to benefit from the big uplift in spending on military capabilities.
Rightmove topped the leaderboard in early trade, after its results enthused investors. It saw a 9% uplift in revenues as estate agents upped spend on the portal’s extra services to keep homebuyers engaged. Rightmove is trying to move with the times, by dramatically increasing spend on AI innovations. The scale of the spend, with a bulk of a £60 million investment due to be spent on the technology over the next three years, had caused jitters among shareholders. However, now that revenues are showing some signs of keeping up with the company’s ambitions, it’s helped quell some concerns.
The Labour upset in the by-election was expected so hasn’t been a significant market mover. However, gilt yields did edge up very slightly but then retreated. Given the surge in support for the Green party, which promises a huge expansion of public spending, concerns will stick around future fiscal responsibility in the UK. While one by-election doesn’t point to electoral success, the win is likely to increase pressure on Keir Starmer to step down and if this occurred his replacement in the Labour party is expected to be more left-leaning with a looser hand on the public purse.
The Warner Bros Discovery drama has seen another twist with Paramount’s aggressive pursuit of the studio seeing off its challenger. It was so close, but yet so far for Netflix, which had appeared to clinch the deal, before Paramount’s bids overshadowed its offer – ultimately putting $110bn on the table. Netflix has now declined to offer more and has walked away from the deal. But this isn’t the end of this blockbuster takeover tale, given how radically the combined might of Paramount and Warner Bros Discovery will reshape the movie and streaming industry, seen as critical for California’s economy. It’s now the turn for regulators to turn critics and scrutinise the plans. Mass job losses are feared with the combination of the studio titans, and there are particular concerns about the effect on the news media landscape. CNN, currently owned by Warner Bros Discovery, has caught the ire of the Trump administration, and there are concerns that this deal could see the global news network sold off, and its power of scrutiny of institutions weakened under a new owner.’’