UK stocks have reversed their losses from last week’s massive global selloff, with just eight of the FTSE 100’s components falling in early trading on Monday.
The blue-chip index climbed 0.61 per cent to 8,217.75, while the mid-cap FTSE 250, which is more closely aligned with the health of the domestic economy, rose 0.36 per cent to 20,699.00
With this morning’s gains, the FTSE 100 has erased its losses from last Monday, which saw London markets rocked by a global selloff triggered by Japan’s central bank raising interest rates and fears of a recession in the US.
“A sense of calm has resumed across financial markets, helping to reverse the tumultuous trajectory of stocks witnessed over the past week,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“In sharp contrast to last Monday’s slide, the FTSE 100 has a spring in its step, easing into the green helped by gains in Asia and on Wall Street on Friday.”
The FTSE 100’s biggest gainer is currently telecoms giant BT, jumping 6.5 per cent after news that its largest shareholder, Altice, had agreed to sell its 24.5 per cent stake in the business to Indian conglomerate Bharti.
The biggest faller, and the only stock dropping more than 0.5 per cent this morning, is retailer JD Sports. The firm’s shares fell four per cent after Deutsche Bank downgraded the stock to “sell” from “hold”, noting that “subdued” spending in the category “tampers our enthusiasm”.
Investors are looking ahead to an important week for inflation on both sides of the pond. Economists expect UK inflation data for July, due on Wednesday, to show the first uptick so far this year, from two per cent in May and June to 2.3 per cent last month.
Rising inflation, particularly in the services sector, could give the Bank of England less confidence to cut interest rates in September after lowering them for the first time since March 2020 earlier this month.
Other data from the Office for National Statistics this week will shed light on UK unemployment, second-quarter GDP and retail sales.
After a weaker-than-expected jobs report helped fuel market mayhem last week, economists expect US inflation data due on Wednesday to show US consumer prices rose 3 per cent on an annual basis in July, unchanged from June.
The figures will feed into investors’ judgements of whether the Federal Reserve is ready to finally bring interest rates down from a more than two-decade high.