Tuesday Jan 23 2024 09:31
3 min
London's primary stock indices advanced on Monday, buoyed by a record-breaking surge on Wall Street that offset concerns about a sluggish British economy and persistent inflation. The benchmark blue-chip FTSE 100, inched up by 0.29%, with banks leading the gains, while the domestically focused FTSE 250 saw a steeper increase of 0.7%.
The momentum from Wall Street's all-time high on Friday, driven by the optimism surrounding artificial intelligence (AI) and gains in chipmakers and technology stocks, carried over into Monday's session. Futures indicated potential additional gains in U.S. stocks, with the benchmark S&P 500 index up 0.5% .
Susannah Streeter, head of money and markets at Uk firm Hargreaves Lansdown, commented on the dynamics to Reuters:
“The FTSE 100 is largely sitting on the sidelines of the tech rally, given the lack of star names in the index. However, retail stocks have started on the front foot, as speculation has swirled about the potential for tax cuts in the UK Budget in March. It seems to have inspired a bit of confidence that respite is on the way for the retail sector.”
British Finance Minister Jeremy Hunt announced plans to use his budget statement in March, potentially his last before an anticipated national election later this year, to stimulate economic growth. Tax cuts are among the measures considered to achieve this objective.
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The FTSE 350 retail index saw a 0.9% increase, partially recovering from a 6.6% year-to-date decline. This positive movement followed both UK indices posting their third consecutive weekly declines on Friday. The downturn was triggered by higher-than-anticipated inflation and a decline in December retail sales, raising concerns about a looming recession and complicating the outlook for interest rates.
Retail and investment bank Barclays saw a 2.65% uptick after Morgan Stanley expressed expectations that the British lender would provide a three-year guidance with increased clarity on its distributions policy when it releases full-year results next month. At the time of writing, the Barclays share price stood at 144.78p, up 3.74p.
The NatWest share price was also up 2.5% after it was revealed that the UK government had sold a further 1% stake to reduce its ownership to 35.94%.
The Lloyds share price advanced by 2.34%, last trading at 43.67p.
S4 Capital gained 3.3% after Martin Sorrell's digital advertising group issued a fourth-quarter trading update in line with its previous forecasts.
Compass Group showed a modest increase of 0.3% following the catering firm's announcement that it had agreed to acquire rival CH&CO for an initial enterprise value of £475 million ($603.16 million).
Risk Warning and Disclaimer: This article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform. Trading Contracts for Difference (CFDs) involves high leverage and significant risks. Before making any trading decisions, we recommend consulting a professional financial advisor to assess your financial situation and risk tolerance. Any trading decisions based on this article are at your own risk.
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