London’s blue-chip index was up 72 points higher by midday, with US stocks also set for gains
- FTSE 100 gains 72 points
- Miners lead the push higher
- Wall Street expected to start higher
1.35pm: Stocks outshone by bitcoin
Bitcoin has rocketed to a new record high, topping US$44,000 after Tesla () boss Elon Musk put his company’s money where his mouth is.
The electric carmaker said in a regulatory filing that as it plans to accept Bitcoin as a form of payment in the future, it has bought US$1.5bn of the cryptocurrency (read more here).
“This is the kind of backing that can take Bitcoin through $50k,” said analyst Neil Wilson at Markets.com.
“Once again it highlights the power that Elon Musk has in shaping price action and moving markets.”
Wilson noted that Tesla’s SEC filing simply says that the investment policy was updated in January 2021 and “thereafter” the company invested an aggregate $1.5bn.
“Timing would appear critical. Tesla also says it may acquire and hold other digital assets,” he said.
“The move will also raise questions for fund managers who may not want to invest in a company with this kind of risk on its balance sheet – we know Bitcoin is very volatile – this is normal FX risk x100. Tesla is now starting to take on big FX risk – this may not worry a lot of investors, but some conservative types might be concerned.”
Meanwhile, the FTSE is up 72 points or 1.1% at 6,561.45.
12.46pm: US stocks to join the party
Wall Street is set to join in the bullish mood in London as traders have an extra spring in their step thanks to hopes about President Biden’s stimulus package.
Just under two hours ahead of the opening bell, the main US stock indices are all seen rising, meaning new all-time highs could be notched up.
“The reflation trade continues at the start of the new week, on expectations of more US stimulus, ongoing central bank support, and of course hopes that the ongoing COVID vaccine roll outs will reduce infections further and hopefully economies will re-open again in the not-too-distant future,” said market analyst Fawad Razaqzada at ThinkMarkets.
“So, stocks remain on the front-foot with many global indices hitting records or multi-year highs, and has climbed above $60 a barrel for this first time in more than a year on hopes over stronger recovery in demand.”
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The FTSE is one of those stepping higher, up 67 points or 1% at 6,556.2 so far today, but is nowhere near its highs.
Razaqzada says he thinks this underperformance is likely to be short-lived.
“UK stocks have been held back because of the ongoing rally in the pound, which continues to find buyers on dips. Last week, the was not very dovish as it looked through short-term risks facing the economy (current lockdowns) and towards slightly normal times ahead and decided to raise its growth forecasts.
“With a no-deal Brexit…