At the end of last week, the FTSE 100 index closed at highs not seen since February 2020, before the pandemic started. Just for this reason, I was cautious of what this week would bring. Going by the recent fluctuations in stock markets, I was braced for yet another correction. But the index has stood its ground.
Improving trends for the FTSE 100 index
For four of the five trading sessions this week, the FTSE 100 index closed higher than 7,200, ending the week at 7,204.5. It closed below the level on Thursday but only just, at 7,190. As a result, the average index level in October is now 1% higher than it was during the month before. This is encouraging in any case, but particularly so because the month started on a poor note. And this followed a 1% fall in the index in September from the month before.
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AstraZeneca advances, UBS raises target price
Now, of course the general investor mood has shifted for the better as some stocks performed well. One of them was the pharmaceutical giant AstraZeneca, whose share price crossed 9,000p for the first time since July last year. This brings it much closer to the all-time highs of 9,320p touched then. The increase follows positive results from the trials of its liver cancer drug. Investment firm UBS raised its price target for the company to 10,000 from 9,200 earlier, which may have increased investor enthusiasm for the stock too.
Burberry appoints new CEO
Luxury brand and retailer Burberry was another news-making stock, and also showed moderate gains this week. It said that Jonathan Akeroyd, who is currently CEO of Versace, will now be heading it. Its former CEO, Marco Gobbetti, who is credited for the company’s strong performance over the past few years, had put in his papers recently.
Positive results’ season
Engineering company Renishaw was a big gainer this week. The company’s annual revenue grew by 11% for the year ending 30 June from the year before. And its adjusted pre-tax profits grew by a whole 146%. The stock gained around 10% this week. Analytics provider Relx also showed small gains after it upgraded its outlook due to increased demand for analytics. Chemicals company Croda International also rallied on good results.
Unilever, the fast-moving consumer goods multinational, also inched up a bit after it reported higher than expected underlying sales in the third quarter compared to the year before. The number stood at 2.5% compared to expectations of 2.2%. However, cost pressures are taking their toll on the company, which warned of price increases in the future.
Inflation drag on the FTSE 100 index
In fact, inflation may have been one of the drags on the index, holding it back from further progress. Earlier this week, it came in above 3% for the second month running in September even as the economic recovery remains weak. While companies’ results are heartening this week, going by the latest price increases, I think more companies will allude to rising costs in the results expected next week as well.