Blue-chips rise as US mood swings

A COOLING of US rate rise expectations brought relief for investors today as shares in London’s band of heavyweight miners jumped by as much as 3%.

Risk appetite also benefited from optimism around China’s economy as its Covid restrictions continue to ease.

The FTSE 100 index lifted another 1% or 74.31 points to 7283.12, having jumped 2.7% on Friday after Wall Street markets rebounded on expectations interest rates will reach 3.5% in March against a previous estimate of 4%.

Richard Hunter, head of markets at Interactive Investor, said today: “There are occasions when bad news can be good news. A record low in US consumer confidence raised hopes that the Federal Reserve may begin to consider a lighter touch in its approach to tightening after the likely July hike.”

Signs that household inflation expectations may have passed the peak added to hopes that markets have gone too far anticipating aggressive Fed rate rises.

Commodities-focused stocks were boosted today, with Anglo American shares up 101p to 3167p and copper miner

Antofagasta 42p higher at 1226.5p.

Scottish Mortgage Investment Trust, whose portfolio includes leading Chinaand US-based tech stocks, topped the risers board with a surge of 4% or 29p to 762p. There was also a recovery for engines giant Rolls-Royce, which added 2.77p to 83.71p.

Whitbread shares were 11p higher at 2567p after analysts at Liberum backed the Premier Inn owner with a “buy” recommendation and new target price of 3320p.

The shares are down 15% this year, despite a strong recent trading update and the potential for greater shareholder returns through dividends and buybacks. Liberum said: “Leisure demand looks strong for the summer and business demand supported by the return of ‘white collar’ demand.”

The FTSE 250 index was 236.84 points higher at 19,360.55, fuelled by gains of 6% for cruise ship business Carnival and 5% for Aston Martin Lagonda.