FTSE closes higher again but drifts from top levels

The FTSE 100 finished at its highest closing price since June as it continued its positive start to 2023.

The index had been substantially higher earlier in the session however, with gains easing back on the back of concerns over the spread of Covid-19 in China and afternoon data showing contraction in the US manufacturing sector.

London’s top flight finished the day up 31.3 points, or 0.41%, at 7,585.19.

“The resilience of the FTSE 100 was impressive given it was able to withstand material falls for index heavyweights BP and Shell on lower oil prices,” commented Russ Mould, investment director at AJ Bell.

“Investors are increasingly concerned about the current Covid situation in China where a relaxation of restrictions is leading to a surge in cases.”

Elsewhere in Europe, the Dax improved 2.18% by the end of the session and the French Cac finished 2.3% higher.

Across the Atlantic, the main US market nudged higher after the opening bell despite Institute for Supply Management (ISM) figures showing an increased decline in output from US manufacturers last month.

Meanwhile, sterling rebounded after Tuesday’s step back against the strong US dollar.

The pound was up 0.76% against the dollar at 1.205, and was 0.1% higher against the euro at 1.135 at the close.

In company news, BT shares climbed on Wednesday after the telecommunication giant invested £5 million in a start-up as part of a scheme aiming to create a drone corridor across southern and central England to carry cargo and other supplies.

BT Group confirmed its digital hub, Etc, is investing the money into drone firm Altitude Angel, to support its work on what is known as Project Skyway.

Shares in the group improved by 5.8p to 120.6p as a result.

Online retail firm Ocado was among the FTSE’s top performers after new figures from Kantar revealed that Ocado sales grew by 8.2% over the 12 weeks to Christmas.

The data showed that the company held its UK grocery market share at 1.7% despite the rapid growth of discounter rivals.

Shares in Ocado finished the session 58.6p higher at 707.2p.

The Kantar data also showed that Tesco sales grew by 6% against the same three-month period last year, helping the UK’s largest grocer to close 6p higher at 235p.

Meanwhile, British Gas owner Centrica dropped by 2.34p to 89.6p and SSE fell 28p to 1,635.5p as lower wholesale gas prices took them to a second day of declines.

The price of oil tumbled further on concerns that China’s rapid reopening is fuelling a surge in Covid-19 infections which could impact travel and cut energy demand.

Brent crude oil decreased by 4.49% to 78.41 US dollars per barrel when the London markets closed.

The biggest risers in the FTSE 100 were Ocado Group, up 58.6p at 707.2p, Fresnillo, up 65.8p at 967.4p, Burberry, up 115p at 2,182p, Prudential, up 62.5p at 1,239.5p, and BT Group, up 5.8p at 120.6p.

The biggest fallers of the session were Glencore, down 37.8p at 506.6p, BP, down 17.5p at 465.85p, Shell, down 82p at 2,285p, Anglo American, down 87p at 3,180p, and Centrica, down 2.34p at 89.6p.