FTSE 250 hits new all-time high as pound falls
The FTSE 250 (^FTMC) touched fresh highs on Wednesday in London, on an otherwise quiet day for markets.
European markets had opened cautiously in the green, ticking higher as investors turn their attention to the Jackson Hole symposium on Thursday and Friday.
The FTSE 250 was 0.5% higher by the closing bell in London.
“Weaker sterling boosts the relative value of the overseas earnings which dominate the FTSE, though the more domestic FTSE 250 was also moving higher too, reaching a new record level early on,” said Dani Hewson, AJ Bell financial analyst.
The moves higher came as the pound (GBPUSD=X) waned against the dollar to trade at $1.3718 early on.
Potential big news for the FTSE 100 supermarket Morrisons (MRW.L) looked set to enter the index. The grocer’s share price has been heading higher ever since a private equity takeover battle kicked off, with bids now hitting around £7bn.
“It has been a lacklustre session in equity markets today as it seems that some dealers are keen to sit on hands ahead of the Jackson Hole Symposium, which kicks off tomorrow,” said David Madden, market analyst at Equiti Capital.
“Towards the end of last week, stocks tumbled due to concerns the Federal Reserve might look to taper its bond buying scheme later this year. To a lesser extent, the worries about tighter regulation in China also weighed on stocks, but the Fed story remains on traders’ minds.”
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“Traders have been injecting capital into Chinese shares as they are gaining a better understanding of China’s regulatory outlook,” said Naeem Aslam, chief market analyst at AvaTrade.
“This shift toward Chinese stocks aided Nasdaq‘s rise as investors took advantage of the opportunity to buy shares of Chinese companies that had suffered massive losses in recent months.”
Overnight in Asia, it was a mixed day of trade. The Hang Seng (^HSI) fell 0.6%, the Nikkei (^N225) closed flat and the SSE Composite (000001.SS) finished 0.7% higher.
Chairman of the US SEC, Gary Gensler, made it clear on Tuesday that Chinese companies that are trading their stocks on US stock exchanges will be required to disclose regulatory and political risks on their financial statements.
This is in addition to the requirement previously imposed on Chinese companies seeking IPOs in the United States. These businesses could begin complying with these requirements as early as 2022.
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