A man wearing a protective face mask walks past the London Stock Exchange Group building in the City of London’s financial district on March 9, 2020 in London, Britain, as British stocks fall as investors fear the coronavirus outbreak is bringing the global economy to a standstill could bring. REUTERS/Toby Melville/File Photo Acquire License Rights
- Retail sales unexpectedly decline in October
- Barclays explores deal for Tesco banking business
- LSEG shares rise after strategy update
- The blue chip group FTSE achieved its best week in nine weeks
- FTSE 100 rises 1.3%, FTSE 250 rises 1.2%
Nov 17 (Reuters) – The U.K.’s major stock indexes rebounded to close over 1% higher on Friday, posting strong weekly gains after a raft of economic data raised investor expectations that interest rates have peaked.
The blue-chip index FTSE 100 (.FTSE) rose 1.3%, while the midcap index FTSE 250 (.FTMC) rose 1.2%.
Despite Thursday’s sell-off, indices appeared to end the week sharply higher as cooling inflation and signs of slowing economic growth fueled bets on interest rate cuts by the Bank of England.
The benchmark index rose almost 2% this week, its best weekly performance in nine weeks, while the FTSE mid-cap index closed 4% higher over the same period.
Official data showed on Friday that British retail sales fell unexpectedly in October as overwhelmed consumers stayed at home, providing a new warning sign for the economy.
“After enjoying the post-Covid surge in spending, consumers now appear to be much more cautious,” said Emma Mogford, fund manager at Premier Miton Monthly Income Fund.
The data painted a bleak picture for British consumers, but also meant traders were pricing in the possibility of interest rate cuts.
Futures markets show that traders expect interest rates to fall by about 80 basis points from the current 5.25% by the end of 2024, compared to a drop of just over 50 basis points a week ago.
Tesco (TSCO.L) rose 0.3% after Reuters reported that Barclays (BARC.L) is exploring a possible takeover of the retailer’s banking operations. The lender’s shares rose 2.7%.
The London Stock Exchange Group (LSEG.L) rose 1.6% after the exchange operator raised its medium-term growth forecast and said it would return 1 billion pounds ($1.24 billion) to shareholders in 2024.
AstraZeneca (AZN.L) rose 0.9% after the U.S. health regulator approved Truqap in combination with an older drug, providing another treatment option for patients with the most common type of breast cancer.
FirstGroup (FGP.L) rose 1.4% to hit a 10-year high after the transportation operator said it would form a joint venture with Japan’s Hitachi (6501.T) to produce up to 1,000 electric bus batteries for about 100 million pounds to lease (US$123.9 million).
Reporting by Sruthi Shankar in Bengaluru; Edited by Sohini Goswami and Shinjini Ganguli
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