Britain’s main stock markets saw gains on Monday, mirroring a widespread rally across European markets as investors looked ahead to key economic indicators due this week, hoping to find clues about future moves in U.S. and British monetary policy.
The FTSE 100 index, representing top British companies, bounced back with a 0.7% increase after reaching a three-month low last week. This gain ended a four-day losing streak. The FTSE 250 index, which tracks mid-sized companies, also rose, climbing by 1%. Across the Atlantic, Wall Street’s rally extended on continued momentum following Donald Trump’s re-election as U.S. president. British stocks, however, have shown volatility since Trump’s victory raised fears of a trade war that could dampen European economic growth. Additionally, recent underwhelming stimulus efforts from China have affected commodity prices, putting further pressure on mining stocks.
The FTSE 350 mining sector dropped by 1.8%, affected by declining base metals prices after China’s latest economic stimulus measures did not meet investors’ expectations. Meanwhile, the precious metals and mining sector slid 5.2% as gold prices fell, influenced by a stronger dollar and expectations of a cautious policy stance from the U.S. Federal Reserve under Trump’s administration. Markets are now waiting for U.S. inflation data as well as British labour market and GDP data later this week to gauge potential interest rate cuts by the Federal Reserve and the Bank of England in the near future.
Several stocks saw notable gains, with chemical group Croda leading the FTSE 100 with a 5.2% rise after reporting a 5% increase in third-quarter sales, boosting the chemicals sector overall. NatWest also rose by 3.7% following its announcement of a £1 billion share buyback from the British government. On the midcap index, Kainos Group rose 6.2% after reporting a modest 1% growth in half-year adjusted pre-tax profit. Aquis Exchange Plc experienced a substantial 113% surge after Swiss stock exchange operator SIX Group announced plans to acquire the UK-based firm in a cash deal valued at £207 million.
Monday’s stock market activity was driven by a mix of gains in specific sectors and cautious anticipation of upcoming economic data that may signal future monetary policy directions in the U.S. and the UK.
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