FTSE 100 stocks started the week with a surge, rising one per cent in the three hours after the opening bell, as the market holds its breath on whether the Bank of England will cut interest rates later this week.
After the record performance of the FTSE 100 in May, where the index hit an all-time high, strong performance on Thursday, Friday, and today has left analysts hopeful that London’s main market could recreate the success of earlier in the year.
Having already risen 3.4 per cent in the last three days, a one per cent rise would send the FTSE 100 to a new record high.
Why is the FTSE 100 doing so well today?
Only 13 of the FTSE 100 stocks were down this morning, with Reckitt being the standout loser of the day due to fears over litigation in the US due to its baby formula.
The company fell over nine per cent upon market open, and was joined by Entain and Pearson as the only three stocks to fall more than one per cent, after they both posted poor earnings reports.
In contrast, growth among FTSE 100 stocks was broad based, with 18 stocks jumping at least 1.5 per cent in the market’s opening hours.
Winners of the morning included Airtel Africa, Natwest, and JD Sports, all of which saw stock prices soar around three per cent.
A key contributor to the FTSE 100’s strong performance over the last couple of days has also been oil stocks, noted Dan Coatsworth, investment analyst at AJ Bell.
“Shell and BP were among the biggest contributors to the index’s performance as oil prices nudged higher to $81.21 per barrel. Oil prices had been on a downward trend since early July, so finding price stability has offered some reassurance,” he explained.
Results were similar in the more domestically-focused FTSE 250, with just a dozen stocks falling more than one per cent in the morning, while far more ticked up.
Markets have begun to rally behind the idea of a cut from the Bank of England, with odds of slashed interest rates from the central bank jumping from around 45 per cent to 60 per cent over the weekend.
However, it is still a close call, with some arguing that the Bank should wait until its September meeting due to the swathe of data set to be released over the summer.