London shares rebound as fears of wider Middle East conflict ebb
London stocks gained 1% on Monday, following last week’s sharp selloff, as fears of the Middle East crisis escalating eased and investors looked ahead to domestic and U.S. economic data later in the week.
The benchmark FTSE 100 rose 1.1% as of 0826 GMT, while the midcap FTSE 250 gained 0.8%. Both indexes are set for the biggest percentage gain in a month.
Tyman led gains in the construction sector after it surged 29% on a $976 million buyout deal by Quanex Building Products. The index was also the top gainer with a nearly 3% jump.
The energy sector was up by 0.7% despite oil prices falling by more than 1%. Precious metal miners was the only sector in the red, slipping 1.2% as gold prices eased after Iran downplayed the risks of an escalation.
Markets will be focussed on comments from Bank of England’s Chief Economist Huw Pill on Tuesday for hints on future rate cuts and the manufacturing and services data for performance of the UK economy.
London stocks boosted by strong corporate results; Hipgnosis Songs Fund surges U.S. personal consumption expenditure price index data is due on Friday.
“All eyes this week are on the latest expectations for the United States and just how stubborn inflation is expected to stay,” Susannah Streeter, head of money and markets at Hargreaves Lansdown said.
Shares of Marks & Spencer Group jumped nearly 3% after Jefferies raised the stock to “Buy” from “Hold” earlier.
Hipgnosis Songs Fund boosted the midcap index with a 10.3% gain as Blackstone made a potential offer to buy the company that owns rights to music by artists including Shakira and Red Hot Chilli Peppers for about $1.5 billion.
Chill Brands fell nearly 24% after the vape-maker suspended CEO Callum Sommerton after allegations were raised around the company’s use of inside information.
Meanwhile, an industry survey showed that prices of homes being sold in Britain are close to their record highs after the biggest annual increase in a year.
London stocks dived on Tuesday, with most sectors in the red, as traders pulled back expectations of rapid US rate cuts, while shares of Dr Martens and Superdry tumbled on disappointing corporate updates.
The resource-heavy FTSE 100 and the mid-cap FTSE 250 fell 1.5% each by 0835 GMT.
While the FTSE 100 looked set for its biggest intraday percentage drop in eight months, the FTSE 250 was on track for the biggest decline in three months. Dr Martens slumped 31.3% to a record low after it named a new CEO and flagged a challenging fiscal 2025 on weak US demand.
The personal goods sector led sectoral losses, falling 4.1% on the news. Superdry tumbled 18.8% after it launched a turnaround plan that included an equity raise that would take the firm private.
Industrial Metal miners followed with a 2.9% fall after prices of non-ferrous metals dropped on a stronger US dollar. The precious metal miners index was the only outlier, rising 0.9% as concerns over rising geopolitical tensions between Iran and Israel propped up demand for gold.
Investors’ expectations of a rate cut by the US Federal Reserve further inclined toward September after hotter-than-expected retail sales data narrated a higher-for-longer story.
Meanwhile, unemployment in the UK edged higher in February and wages saw their weakest climb since mid-2022, bolstering bets for Bank of England rate cuts in the near future.
“The data has taken a real bite out of the FTSE 100,” said Danni Hewson, head of financial analysis at AJ Bell, as the unemployment data “sort of signals that cracks have started to show in the UK labour market.”