UK bonds are regaining ground after a significant global selloff, while the pound is holding steady near $1.35 and London stocks are stabilizing. The FTSE 100 is expected to open lower, potentially marking its third consecutive day of decline. This follows a period where the global government bond market sell-off paused, providing some relief to sentiment. Gold also saw a rebound, climbing above $4,430 an ounce, supported by a softer dollar and easing bond yields.
On the previous day, Thursday, September 3, the FTSE 100 managed a modest gain, closing 0.7% higher at 10,831.52 points, with the midcap FTSE 250 also rising 0.7%. This recovery was attributed to a rally in global bonds ahead of a U.S. jobs report, which improved risk sentiment. Precious metal miners led sector gains, rising 3.4% as gold and silver prices increased. Healthcare stocks also advanced 0.6%, with AstraZeneca up 1.4%.
Oil prices have been a key factor, with Brent crude remaining elevated near $97 due to ongoing US-Iran hostilities and concerns about disruptions to energy shipments through the Strait of Hormuz. However, there are signs of cooling, with Brent crude futures trading around $94.60 a barrel earlier, down approximately 1.1%. This decline from Wednesday's highs could alleviate some inflation concerns, though it might limit support for oil majors like BP and Shell.
In corporate news, Vodafone Group PLC saw its shares climb over 3% to 123.35p on Thursday after its VodafoneThree subsidiary launched a new television and entertainment service. This initiative, set to launch in October, aims to compete with existing providers and support Vodafone's strategy to expand its broadband customer base. Advertising firm WPP rose 5.6% due to prospects related to PepsiCo and Coca-Cola accounts, while Hilton Food Group surged 16.17% after raising its full-year profit forecast.
Economic data also played a role, with the UK services sector expanding for the second consecutive month in August, reaching its fastest pace since April. The S&P Global UK Services PMI rose to 52.5 from 52.1 in July, indicating improved operating conditions. However, the survey also noted accelerating input-cost inflation, suggesting potential warnings for the Bank of England regarding price pressures.
