The FTSE 100 began the week with a modest rise on Monday, bolstered by gains in mining stocks. As investors await the release of the UK’s domestic GDP data later in the week, all eyes are on how this might influence the Bank of England’s future policy decisions. The blue-chip index climbed 0.3%, while the midcap FTSE 250 remained unchanged at 0930 GMT.
In Europe, stock markets hovered near six-week highs following indications of potential stimulus measures aimed at supporting China’s slowing economy. The mining sector saw significant gains, with shares of Glencore, Antofagasta, and Rio Tinto rising between 2.6% and 3.3%. This led to the mining sector emerging as one of the day’s top performers. Additionally, the energy sector added 1.2%, with oil prices benefiting from heightened uncertainties in the Middle East following the fall of Syrian President Bashar al-Assad’s regime.
The personal goods sector also posted a strong performance, advancing 1.6%, while the aerospace and defence sector experienced a decline, falling by 1.1%. Whitbread shares slipped 2% after UBS lowered its target price for the hotel group.
Looking ahead, investors are awaiting comments from Bank of England Deputy Governor Dave Ramsden regarding financial stability. Much of the focus will be on the UK’s GDP estimate for October, which could offer clues about the Bank of England’s interest rate strategy moving forward. Current market expectations suggest an 89.2% chance of the BoE holding rates steady at its next policy meeting on December 19, with projections of around 76 basis points in rate cuts by the end of next year.
Meanwhile, a survey revealed a significant drop in demand for workers in the UK following the government’s recent budget, suggesting the early impacts of tax hikes on businesses. Across the Atlantic, investors are awaiting crucial inflation data that could pave the way for a rate cut by the US Federal Reserve in December.
The FTSE 100’s positive start to the week, along with encouraging signs from global markets and key economic data, signals cautious optimism as investors assess the future direction of monetary policy in the UK and beyond.
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