FTSE finishes higher, Bitcoin plunges below $30K, Brent above $75 By Investing.com

Key Points

• FTSE 100 closing price of 7090.99, +0.4%
• Melrose gains after completing unit sale
• Travel & leisure sector in focus
• Brent breaches $75
• Bitcoin plunges below $30K
• FX markets steady ahead of Powell

By Samuel Indyk

Investing.com – The FTSE 100 finished higher for the second consecutive day on Thursday but the index failed to break back above the 7,100 level.

Melrose Industries (LON:MRON) was near the top of the index after it confirmed the sale of its Nortek Air Management unit and said it would return approximately £730mln to shareholders.

Travel & Leisure stocks were also in focus after the UK health secretary Matt Hancock confirmed that the government was looking into allowing fully-vaccinated travellers to skip quarantine rules upon their return from countries on the ‘amber’ list, such as France, Spain, Portugal, Italy, and Greece. However, there are still hurdles to overcome, such as cost of private Covid tests and travel restrictions enforced by other countries for UK passengers before normal summer travel can resume.

BP (LON:BP) and Royal Dutch Shell (LON:RDSa) were both trading higher as Brent breached $75 to the upside, the first time the major benchmark has traded above that level since 25th April 2019. The improving demand outlook continues to support prices while tight supply is also a factor. Hopes of a near-term influx of Iranian oil appear to have been diminished after hardline candidate Ebrahim Raisi won Iran’s presidential election over the weekend, potentially meaning sanctions will stay for longer.

The price of Bitcoin dropped below $30,000 for the first time since January as the Chinese crackdown on cryptocurrencies continues apace. On Monday, China’s central bank informed some major banks and payments firms to check client accounts for transactions related to cryptocurrencies and cut their payment channels. Some analysts have argued that a break of $30,000 could lead to further selling while others have said that Bitcoin trading below $30,000 may be an attractive entry point.

In the more traditional currency space, the US Dollar Index was marginally higher ahead of Jerome Powell’s testimony to Congress at 19:00BST. Focus will be whether Chair Powell will put a firmer timeline on when the Fed will start removing the emergency stimulus that has been in place since the start of the pandemic. Following Wednesday’s FOMC decision, the USD has pushed higher as the median view on the Committee now sees two interest rate increases in 2023.

GBP/USD and EUR/GBP were broadly unchanged despite more comments from Hancock, who said that the data was looking good for the removal of all social distancing restrictions by the 19th July.

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