FTSE 100 recovers from last week's scare

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FTSE 100 recovers from last week's scare
Last week's late twitch reignited speculation that a stockmarket correction was imminent. Investors worried about stretched equity valuations, weak retail data and sector profits warnings, a narrow 5-3 vote against a UK interest rate rise, then panic around the possible implications of Amazon's $13.7 billion takeover of Whole Foods.

But, as politicians got two years of Brexit talks underway, investors were reassured Monday after a fresh decline in sterling - down from $1.2814 to as low as $1.2723 - gave FTSE 100 (UKX) exporters a boost.

US-focused plumbing supplies king Wolseley (WOS) was in demand, as was Irish building supplies giant CRH (CRH), which does most of its business across the Atlantic.

Miners Glencore (GLEN), Anglo American (AAL), Rio Tinto (RIO) and Antofagasta (ANTO) also took their cue from dollar weakness.

Meanwhile, reports in Australia also have it that Glencore bosses met with their opposite numbers at Rio to discuss a $2.55 billion (£2 billion) bid for Rio's Coal and Allied assets in New South Wales.

Sainsbury's (SBRY) took a pounding Friday on fears that Amazon's move into bricks-and-mortar stateside would soon cause another round of price deflation here. But it's bounced back sharply as concerns look overdone.

There's also talk it's won a £130 million bidding war for convenience store business Nisa as it looks to add to its purchase of Argos owner Home Retail Group last year.

But it's support services firm G4S (GFS) that's the biggest riser, up nearly 5% as it makes a return to the FTSE 100 index following the latest quarterly reshuffle.

Technical analyst Alistair Strang's software was in perfect working order Monday. Earlier he told us that the FTSE 100 could head to 7,575 if it made it above 7,530. It did, topping out at 7,537 before ending the session at 7,523.

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Among the mid-caps, the FTSE 250 also started the week higher, although gains were more modest. And miners were the big winners again, with KAZ Minerals (KAZ), Evraz (EVR), Vedanta (VED), Petra Diamonds (PDL) and Ferrexpo (FXPO) all up over 2%. Sirius Minerals (SXX) also celebrated promotion to the index.

Meanwhile, troubled Capita (CPI) looked to continue its recovery as the Neil Woodford-backed outsourcer hit an eight-month high of 670p after broker Jefferies upgraded its recommendation to 'buy' and hiked its price target by two-thirds to 750p. It follows on from last week's better-than-expected trading update.

Amongst other names, there were decent gains for Aberdeen Asset Management (ADN) and PZ Cussons (PZC).

Big winner of the day on the 250 was Ocado (OCDO), up 11% as investors, analysts and the media alike speculated that the online grocer could be Amazon's next target.

Ocado's hardly been out of the news in recent days, with Richard Bernstein at activist investor Crystal Amber said to be meeting bosses in a bid to overhaul the company.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.