FTSE 100 stages recovery as upbeat Wall Street comes to rescue

Summary

• UK shares staged a meaningful recovery in late trades following upbeat Wall Street
• The FTSE 100 somehow managed to reclaim the psychological mark of 7,000
• Investors have seemingly overturned the fears of rising inflation in the UK
• ONS is slated to release retail sales for the month of April 2021 on Friday 

UK shares staged a meaningful recovery in the late afternoon trades on Thursday, 20 May, following the upbeat Wall Street with all the three major American indices registering sharp uptick after three-day slide. On the other hand, London equities regained momentum after suffering the inflation shock on Wednesday, and the dejection catalysed by the cryptocurrency crash.

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Wall Street had an eventful start on Thursday with the benchmark indices looking ahead to pare the weekly losses on the account of global jittery and widespread collapse of all the key crypto assets with the most popular bitcoin witnessing more than a 45 per cent drop in the last 10-11 days due to restated stance of China on banning the financial institutions supporting the transactions with crypto exchanges.

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The initial hammer on cryptocurrencies was pounded by the actions of Tesla Inc (NASDAQ:TSLA) and the tweeting commentary of its founder Elon Musk in recent days.

According to the data available with the New York Stock Exchange, the Dow Industrials jumped 0.50 per cent to 34,066.42, the technology-laden Nasdaq Composite rallied 1.45 per cent, to 13,492.08, while the S&P 500 added 0.84 per cent, to 4,150.44. A larger recovery in the equity sentiments in the second half of the week may lead the indices to close with weekly gains.

Back in London, the benchmark FTSE 100 turned comfortable enough to reclaim the psychological mark of 7,000, the mid-cap steered barometer FTSE 250 and the broader share indicators including FTSE 350 and FTSE All-Share followed suit.

As per the latest data with London Stock Exchange, the FTSE 100 was trading at 7,005.59, up 0.80 per cent from the previous close of 6,950.20. FTSE 250, FTSE 350 and FTSE All-Share gained between the range of 0.60 and 0.80 per cent.

FTSE 100 chart (20 May)

(Source: Refinitiv, Thomson Reuters)

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The market participants have seemingly overturned the fears of rising inflation in the United Kingdom. The domestic investors are looking ahead to the upcoming releases including the Gfk consumer confidence for May that is slated to be declared on 21 May, Friday. Other than this, the Office for National Statistics (ONS) is scheduled to release the retail sales figures for the month of April 2021 on Friday.

The markets are apparently looking in a position to close the week with marginal gains, however any further disruption across the globe could once again disarrange the regained confidence. On the global front, the equity participants remain cautious as the Ministry of Internal Affairs & Communications of Japan is due to announce the annual inflation rate for Japan in April 2021 on Friday.