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HomeboeLondon's FTSE 100 Swings Between Gains and Losses in Early Trade

London’s FTSE 100 Swings Between Gains and Losses in Early Trade

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London’s FTSE 100 experienced a slight increase of 0.1% in early morning trading, but displayed volatility as it swung between gains and losses. This reflects the downbeat mood currently affecting global stock markets as investors adjust their expectations regarding interest rates in the UK and US. Both the Federal Reserve and the Bank of England decided to keep interest rates unchanged this week, but policymakers from both sides have emphasized that rates are likely to remain elevated for an extended period. In fact, there is the possibility of another rate hike if incoming economic data supports it.

The UK, in particular, is facing the prospect of a prolonged pause in interest rates, which is putting more pressure on an economy that is currently experiencing tepid growth. This uncertainty is most noticeable in the FTSE 250 index, which is considered a reliable indicator of the domestic economy. The index has experienced fluctuations between positive and negative territory throughout the year and is currently down by 1.5%.

Today, several purchasing managers’ indices (PMIs) will be released for the Eurozone, UK, and US, providing further insights into the economic performance of these regions.

In other news, UK retail sales rebounded in August after a decline in July due to adverse weather conditions. Sales rose by 0.4%, driven by strong purchases of food and clothing. While this is an improvement, it falls slightly below the 0.5% increase predicted by analysts. Additionally, the GfK Consumer Confidence index increased by four points to -21, marking the highest reading since January 2022.

One notable company attempting to recover from a significant drop is Ocado. The online grocery retailer experienced a 20% decrease following a downgrade by Exane Paribas to ‘underperform’. However, prior to this downturn, the stock had more than doubled since June.

On the other hand, JD Sports Fashion is continuing to see gains after impressing the market with its interim results, which showed a 26% increase in pre-tax profits.

AstraZeneca also experienced an uptick after announcing positive results from the TROPION-Breast01 phase three trial. These developments have contributed to the overall performance of the FTSE 100 in early morning trading.

Overall, the global stock market is experiencing a downbeat mood, with investors adjusting their expectations regarding interest rates. The UK’s tepid economic growth is further impacted by the prospect of a long pause in rates. However, the rebound in retail sales and positive performance of certain companies, such as Ocado, JD Sports Fashion, and AstraZeneca, provide some optimism amidst the uncertainties. As the day progresses, the release of various PMIs will provide further insights into economic performance.

More detail via Investing.com UK here… ( Image via Investing.com UK )

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