London’s blue-chip stock index edged lower on Monday as a rising British pound weighed on export-oriented companies, while investors focussed on a week of key central bank rate decisions.
The benchmark FTSE 100 was down 0.1% after notching its best week since mid-August on Friday as investors raised their bets of a more aggressive Federal Reserve rate cut on Wednesday.
Mid-cap and small-cap stocks shed 0.1% and 0.2%, respectively.
The pound gained 0.3% to its highest in more than a week, while gold touched a record high.
However, UK miners slipped 0.2%, after a 6.8% leap in the previous session, on downbeat industrial production data from top consumer China.
With global growth concerns back in focus, the week’s key event is the Fed’s rate decision, with the market weighing up the odds of a 25-basis-point cut versus a 50-bps cut.
After weeks of back-and-forth due to mixed economic data, traders now see a 61% chance of a heftier 50-bps cut, per the CME’s FedWatch tool.
The Bank of England, which meets this Thursday, is expected to leave rates on hold and investors will primarily watch for clues on BoE’s path for the rest of the year and updates on the pace of its bond sales.
FTSE 100 gains on precious metals surge
Among stocks, insurer Phoenix Group fell 2.3%, most on the FTSE 100, after halting the sale process of its SunLife business.
Playtech jumped 8.5% after the gambling technology firm said it expects 2024 adjusted core profit to be slightly ahead of market expectations.
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