The FTSE 100 regained its poise following gains on both Asian markets and Wall Street, and a strong showing from commodity stocks.

The UK blue-chip index gained 0.6%, or 48 points, to 7,742 as US markets seemed to price in expectations for further falls in inflation while at the same time US Federal Reserve chair Jerome Powell failed to make any comments about forthcoming monetary policy.

The FTSE 100 has now recovered all its 2020 pandemic losses and last stood at this level in May 2019.

‘While that won’t have directly given the markets something to digest, there is an element of no news is good news,’ said Sophie Lund-Yates, an analyst at Hargreaves Lansdown.

‘Reports of global supply chain bottlenecks easing and the reopening of China mean that ultimately markets are baking in some renewed optimism. There is a ceiling to this good mood though. Stock markets remain highly sensitive and have been prone to some misdirection in recent trading days.’

This renewed optimism helped lift commodity stocks, as it tends to do as traders expect a jump in demand:

• Anglo American (AAL) was up 2.5%, or 90p, at £35.84;
• Antofagasta (ANTO) was up 2.2%, or 39p, at £17.94;
• Glencore (GLEN) was up 2.1%, or 11p, at 545p;
• Rio Tinto (RIO) was up 1.9%, or 120p, at £61.93; and
• Endeavour Mining (EDV) was up 1.8%, or 36p, at £19.53.

The rises in commodities came despite oil falling back below $80 (£66)a barrel, although the price is still elevated compared to last week. The tick down reflected data from the American Petroleum Institute that showed US crude inventories jumped by 14.9m barrels last week, versus an expected drop in barrels.

Retailers continued to cheer markets with upbeat Christmas sales results. JD Sports (JD), up 5.4%, or 7p, at 148p, moved to the top of the FTSE after reporting a 20% increase in revenue over the festive period. Profits are expected to top £1bn for the full year to 3 February.

This boosted interest in Sports Direct owner Frasers (FRAS), which bought five brands from JD Sports at the end of last year for £47.5m. Its shares rose 3.1%, or 23p, to 745p.

Insurer Admiral (ADM) was a dark spot on the index, down 11%, or 253p, at £20.19 after small-cap peer Direct Line (DLG) plunged 29%, or 67p, to 164p after scrapping its final dividend following a near doubling in weather-related claims that pushed it to an underwriting loss. The cold snap last month means the insurer is expecting around £140m of claims versus the £73m it had planned for.

The FTSE 250 ticked 0.3%, or 56p, higher to 19,448, led by building materials supplier Grafton (GFTU), which added 3.3%, or 28p, to reach 866p after reporting a 9.1% rise in annual revenue and said operating profits for the full year were set to beat analysts’ top forecasts.

Luxury car maker Aston Martin Lagonda (AML) revved 2.9%, or 4p, higher at 162p. Marks & Spencer (MKS) added 2.8%, or 4p, to 145p, basking in the glow from JD Sports.

Among investment companies, BlackRock World Mining (BRWM ) was boosted by the rise in mining and commodity stocks, up 2.14% at 750p after closing on a small premium over net asset value (NAV) yesterday.

Digital venture capital fund Molten Ventures (GROW ) added another 2.3% to 385p as it continued to claw back savage falls during the first nine months of last year. The shares have rallied 38% in the past three months but remain on a wide 55% discount to NAV.

Heavily discounted real estate investment trusts also found buyers with UK Commercial Property (UKCM ) up 2.3% at 57p and Urban Logistics (SHED ) 2.2% firmer at 135p.