FTSE 100 close: London markets make muted start to the week
London’s FTSE indexes struggled to regain the momentum from last week’s rally on Monday as investors continue to mull the impact of central banks’ rate rises.
The FTSE 100 closed marginally higher at 7,417.76 while the FTSE 250, which is more aligned with the health of the domestic economy, dropped 1.31 per cent to 17,747.47.
Bets of rate cuts fuelled markets last week. After an extended period of under-performance, markets around the world surged last week as investors bet that rate cuts would come sooner than signalled.
“Weak jobs figures from the US on Friday were the latest bit of news to underpin this status and with both Bank of England governor Andrew Bailey and Federal Reserve chair Jerome Powell due to speak this week, investors will be watching closely to see if they seek to counter or reinforce this narrative,” AJ Bell investment director Russ Mould said.
“For now, we’re still in a world where bad news equals good news because of the implications for rates. At some point though the market will turn to the implications of a significant weakening in the economy on corporate earnings,” Mould continued.
In London Melrose climbed to the top of the FTSE 100, rising 3.5 per cent after signing a new $5bn deal with engines manufacturer GE Aerospace.
The new aftermarket services agreement will widen Melrose’s GKN Aerospace division’s current partnership with GE, surrounding its fastest selling high-thrust GEnx engines.
Shares in Prudential finished the day slightly higher as it reported profit was higher despite a slight slowdown in activity over the course of the third quarter.
“Prudential has had a very clear strategic direction of focusing on Asia in recent years and there are signs the unsettled Chinese economy and market are starting to weigh on the company, with a slowdown in new business in the third quarter,” Mould said.
“The challenges should be kept in perspective. Consumer demand has remained resilient for now and Prudential still operates in immature markets with more significant growth potential than those targeted by counterparts operating in the West,” he continued.