London equities kicked off the week positively, buoyed by a rally in metal miners and defence stocks. Investors are now awaiting comments from the Bank of England for hints on the central bank’s interest rate trajectory.
FTSE 100: The blue-chip FTSE 100 rose by 0.3%, rebounding from two consecutive sessions of losses.
FTSE 250: The mid-cap FTSE 250 gained 0.5%, approaching the key 21,000 mark.
Precious Metal Miners: Leading sectoral gains, precious metal miners rose 2.3% as bullion prices surged to record highs. This rise is driven by speculation that the U.S. Federal Reserve might soon implement its first rate cut.
Industrial Metal Miners: Gained 0.8% after copper prices hit an all-time peak.
Energy Shares and Defence Stocks: Aerospace and defence stocks were among the top performers. The sector rose amid heightened uncertainty in the Middle East following the death of Iranian President Ebrahim Raisi in a helicopter crash.
Danni Hewson, head of financial analysis at AJ Bell, commented, “It’s not a surprise to see these [defence stocks] up because if the situation in the Middle East destabilises even further, that will just push governments to spend more on defence.”
Traders are eagerly awaiting a speech by Bank of England’s Deputy Governor Ben Broadbent later in the day. His comments could provide clues about the timing of the central bank’s first rate cut.
Consumer Price Index (CPI): Set to be released on Wednesday, this key indicator will be closely watched by traders.
Manufacturing and Retail Sales Numbers: Due later this week, these figures will also be under scrutiny.
Hewson added, “A little bit of reorienting is going on, but there’s also a bit of wait and see,” referring to the anticipation surrounding Wednesday’s CPI numbers.
Kainos Group surged by 11.7%, making it the top performer on the mid-cap index. The services firm reported upbeat full-year results, boosting investor confidence.
In summary, London equities started the week on a strong note, supported by gains in metal miners and defence stocks. Investors are now focused on upcoming speeches and economic data for further market direction.
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