London open: FTSE gains amid renewed hopes of Fed rate cut

(Sharecast News) - London stocks rose in early trade on Monday amid renewed hopes of a rate cut by the Federal Reserve next month, as investors looked ahead to this week's Budget.

At 0830 GMT, the FTSE 100 was up 0.4% at 9,578.65.

Sentiment got a boost late on Friday after the head of the Federal Reserve Bank of New York said he sees scope for shortly reducing interest rates due to weakness in the labour market.

In a speech about inflation-targeting at a conference in Santiago, Chile, John Williams refrained from predicting when a rate cut would be appropriate, but said that he would support the move "in the near term".

"I still see room for a further adjustment in the near term to the target range for the federal-funds rate to move the stance of policy closer to the range of neutral," Williams said.

Richard Hunter, head of markets at Interactive Investor, said: "A weak week ended with a firmer Friday as comments from a Federal Reserve member reignited hopes of an interest rate cut next month.

"The probability of a cut was raised to 70% by investors from 40% just the previous day, with the observation that monetary policy was still 'moderately restrictive' even after two cuts this year, potentially leaving the door ajar for an end of year boost. The outlook has been clouded by the recent government shutdown with a dearth of economic data available. Even last week's delayed jobs report, which was stronger than expected, related to September and therefore missed out the majority of the effects of the lockdown in October."

The mood was also lifted after the US and Ukraine said they had created an "updated and refined peace framework" to end the war with Russia following weekend talks in Geneva.

As far as the Budget on Wednesday is concerned, Hunter said it may well impact the currency and bond markets.

"For equities, the effects may be more indirect depending on an outlook which, apart from the extension of tax thresholds which could increase fiscal drag and equate to a tax rise in all but name, then filter through to consumer sentiment," he said.

"In such a scenario, investors could choose to mark down the likes of the retailers and the housebuilders, while the more domestic banks could also come under some pressure."

In equity markets, Anglo American shares dipped after BHP confirmed it is no longer pursuing a takeover of its rival that had threatened to wreck the latter's $57bn merger with Teck Resources.

BHP said a potential tie-up with Anglo, which would have created the world's largest copper producer, still had "strong strategic merits", but it is confident in its own organic growth strategy.

BHP had walked away from a previous approach in May 2024 after Anglo's board rejected three proposals from the larger group.

On the upside, AstraZeneca nudged higher after saying it will invest $2bn ramping up manufacturing facilities in Maryland, America.

The firm intends to both expand its existing flagship biologics plant in Frederick, and to build a new facility in Gaithersburg, which will develop innovative molecules to be used in clinical trials. Both are expected to operational by 2029.

IMI was also in the black after it agreed to sell its Truflo Marine business to Fairbanks Morse Defense for an enterprise value of �225m.

Wizz Air flew to the top of the FTSE 250, likely on the back of Ukraine peace hopes.

Market Movers

FTSE 100 (UKX) 9,578.65 0.41%

FTSE 250 (MCX) 21,453.52 0.42%

techMARK (TASX) 5,504.61 0.31%

FTSE 100 - Risers

Fresnillo (FRES) 2,356.00p 2.88%

Pershing Square Holdings Ltd NPV (PSH) 4,812.00p 2.65%

Barratt Redrow (BTRW) 388.50p 2.56%

Standard Chartered (STAN) 1,599.00p 2.50%

Entain (ENT) 743.20p 2.12%

Glencore (GLEN) 340.95p 1.78%

Barclays (BARC) 399.15p 1.77%

Antofagasta (ANTO) 2,618.00p 1.59%

The Sage Group (SGE) 1,081.00p 1.55%

Persimmon (PSN) 1,277.00p 1.47%

FTSE 100 - Fallers

Rightmove (RMV) 540.00p -1.39%

Anglo American (AAL) 2,676.00p -1.25%

National Grid (NG.) 1,124.50p -1.23%

BAE Systems (BA.) 1,699.50p -0.79%

Marks & Spencer Group (MKS) 330.80p -0.69%

Shell (SHEL) 2,767.00p -0.65%

SSE (SSE) 2,162.00p -0.64%

Admiral Group (ADM) 3,132.00p -0.63%

Vodafone Group (VOD) 89.52p -0.56%

Hiscox Limited (DI) (HSX) 1,321.00p -0.53%

FTSE 250 - Risers

Wizz Air Holdings (WIZZ) 1,151.00p 4.92%

Endeavour Mining (EDV) 3,292.00p 4.11%

Ceres Power Holdings (CWR) 324.00p 3.78%

Vistry Group (VTY) 614.80p 3.05%

Bridgepoint Group (Reg S) (BPT) 280.20p 2.86%

Carnival (CCL) 1,855.50p 2.60%

Grafton Group Ut (CDI) (GFTU) 905.40p 2.43%

Hochschild Mining (HOC) 357.40p 2.29%

Investec (INVP) 548.00p 2.24%

Oxford Biomedica (OXB) 605.00p 2.20%

FTSE 250 - Fallers

Discoverie Group (DSCV) 540.00p -4.76%

Ithaca Energy (ITH) 196.20p -3.35%

Avon Technologies (AVON) 1,758.00p -3.30%

W.A.G Payment Solutions (EWG) 91.20p -3.18%

IntegraFin Holding (IHP) 311.00p -2.66%

Ashmore Group (ASHM) 152.70p -2.18%

International Workplace Group (IWG) 215.20p -1.91%

SSP Group (SSPG) 142.50p -1.72%

CMC Markets (CMCX) 281.00p -1.58%

Trainline (TRN) 250.20p -1.34%