LONDON, Feb 16 ― UK shares advanced today, driven by base metal miners, with the indexes headed for weekly gains as investors remained optimistic about potential interest rate cuts from the Bank of England after recent economic data.
The FTSE 100 and the mid-cap FTSE 250 added 0.6 per cent each as of 0910 GMT, with the blue-chip index hitting an over one-week high.
Both indexes were on course to post gains for the week, breaking a two-week losing streak.
Industrial metal miners climbed 2 per cent, tracking the increase in base metal prices on expectations of US Federal Reserve rate cuts.
Most major sectors traded in the green. The defensive telecommunications service providers dropped 0.5 per cent.
UK retail sales surged by a stronger-than-expected 3.4 per cent in January, data showed on Friday, yet it did little to dampen market optimism.
“Firstly, this is just one month's numbers and given how weak retail sales have been until now, we will need more evidence that consumption really is recovering,” said Stuart Cole, chief macro economist at Equiti Capital.
“And secondly, the growth numbers this week were pretty terrible and are at the forefront of the markets thinking at the moment.”
That included data indicating softer inflation and the economy slipping into recession, which has bolstered hopes that the BoE would cut rates from its nearly 16-year high levels.
Money markets are pricing in about 72 basis points of rate cuts this year.
Among stocks, Segro advanced 1.3 per cent after the warehousing group cited optimistic prospects for its investment market business in 2024 and posted a better-than-expected annual profit.
NatWest gained 2.1 per cent after the taxpayer-backed British bank confirmed Paul Thwaite as its permanent chief executive and reported forecast-beating profit for 2023. ― Reuters