Central banks are again top of the agenda ahead of interest-rate decisions from the Bank of Japan and Federal Reserve this week.
The FTSE 100 has started Monday on the front foot, rising over 1% with every sector in the green in a sign of broad-based confidence. The UK benchmark equity index has suffered two weeks of declines amid central bank uncertainty, troubles in Europe’s banking system and a drop in the oil price.
Further evidence of political disunity at the centre of power in Germany will be having some effect at the margins. The Xetra DAX is the worst performing stock index in Europe, albeit still higher. Chancellor Angela Merkel’s party losing regional seats to the AfD is reminiscent of the UKIP threat for the UK’s Conservative party. The Tories responded to the rise of UKIP by promising an EU referendum, and we all know how that turned out. The AfD may not get into power but it can shift policy in the main German parties, and the obvious area for reform is immigration.
A drop in the US dollar and higher oil prices have pushed mining shares including BHP Billiton (LON:BLT) and Anglo American (LON:AAL) to the top of the FTSE 100. Oil prices have risen after Venezuelan President Maduro said OPEC and non-OPEC countries were close to agreement to stabilise the market and two of Libya’s ports used for oil exports fell under militia control. Shares of Sky (LON:SKYB) were amongst the biggest risers after an upgrade from Morgan Stanley (NYSE:MS).
Markets have shown little sign of concern over US security following Sunday’s attacks, including a bombing New York City. Stocks in the US look set for a higher open on Monday with the Dow Jones near to triple digit gains.
USA pre-opening levels
S&P 500: 9 points higher at 2,148
Dow Jones: 95 points higher at 18,218
Nasdaq 100: 21 points higher at 4,839
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