FTSE 100 snaps losing streak as Turkey and China fears recede

The index snapped a five-day losing streak on Thursday.

The FTSE 100 closed the day up (Kirsty O’Connor/PA)
The FTSE 100 closed the day up (Kirsty O’Connor/PA)

The FTSE 100 bounced back on Thursday as fears over Turkey’s currency crisis and slowing growth in China eased.

London’s top flight closed up 58.51 points, or 0.78%, to close at 7,556.38, snapping a five-day losing streak.

It came after a bloodbath on Wednesday saw £29 billion knocked off the value of the index.

Investors had rushed for safe havens and dumped equities as Turkey descended deeper into economic turmoil, while the China-US trade war on top of a slowdown in the Asian powerhouse also weighed on sentiment.

Fiona Cincotta, market analyst at City Index, said: “The FTSE climbed higher across the session and closed in positive territory for the first time in a week.

“With Qatar offering financial support to Turkey, China sending a delegation to Washington to work out a trade deal and UK retail sales bounding higher, sentiment improved, boosting investors’ appetite for risk.

“After heavy falls for the miners in the previous session, today the miners were the top sectorial gainer as metal process rebounded.”

In stocks, B&Q owner Kingfisher ended the day towards the bottom of the FTSE 100, shedding 13.9p to end on 274.5p.

B&Q’s sales bounced back following warmer weather in the UK in the second quarter, but investors fretted due to another poor performance in France.

B&Q’s sales rose 3.6% but Castorama dragged on France, with like-for-like sales dropping by 3.8% in the period.

Elsewhere, shares in MoneySupermarket.com and GoCompare.com were knocked amid fears that Amazon is laying the groundwork for its own insurance comparison website.

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The online retail giant has reportedly held talks with a number of insurance executives over whether companies would be willing to contribute products to a prospective comparison site of its own.

Shares in MoneySupermarket.com closed down 15.5p at 283.7p.

GoCompare.com fell as much as 10% at the start of trading but ended flat at 114p.

Turkish President Recep Tayyip Erdogan (Andrew Parsons/PA)

Sterling, meanwhile, received a much-needed but ultimately short-lived shot in the arm from better-than-expected retail sales figures.

In July, retail sales jumped by 0.7%, beating expectations for 0.2%, according to figures from the Office for National Statistics.

The pound ended the session about 0.2% up on the dollar at 1.271. Versus the euro, sterling was trading down 0.1% at 1.117.

The British currency has taken a Brexit hammering in August as the UK hurtles towards a calamitous no deal with the EU.

Ranko Berich, head of market analysis at Monex Europe, said: “Sterling enjoyed a brief moment of strength after the news, but today’s good retail sales report is nothing more than a drop in an ocean of ongoing political uncertainty, while global investor risk appetite remains fickle.”

In Europe, Germany’s DAX closed up 0.61% and France’s CAC rose 0.94%.

A barrel of Brent Crude was 71 US dollars, up 0.4% on the day.

The biggest risers on the FTSE 100 were Ocado up 40p at 1,056.5, NMC up 120p at 4,062p, Melrose up 6.4p at 219.7 and WPP up 36.5 at 1,281.5p.

The biggest fallers on the FTSE 100 were Evraz down 27.6p at 461.3p, Kingfisher down 13.9p to 274.5p, Informa down 11p at 774p and Legal & General down 2.9p at 254.9p.

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