London’s FTSE 100 edged lower on Friday as robust British retail sales figures suggested a delay in potential interest rate cuts, though the index was on track for its first weekly gain in six weeks.
The FTSE 100 dipped 0.3% in morning trade, contrasting with the steadier performance of the mid-cap FTSE 250, which looked set to log its first weekly gain in four weeks.
UK retail sales volumes surged 2.9% in May, rebounding strongly from a revised 1.8% decline in April and surpassing economists’ expectations of a 1.5% increase. The personal goods sector led the gains within the FTSE 350, rising by 1%.
Investors remained cautious ahead of the release of Purchasing Managers’ Index (PMI) figures later in the day.
Russ Mould, Investment Director at AJ Bell, remarked, “It’s a summer Friday and everybody’s busy watching football, so wouldn’t want to get too much on one morning’s price move.
Following hints from the Bank of England about a potential rate cut in August, investor sentiment in the UK has improved. Markets are now pricing in a 50-50 chance of a rate cut next month, buoyed by a weaker pound which has provided additional momentum.
In individual stock movements, United Utilities saw a 1.7% rise after an upgrade by J.P.Morgan to “overweight” from “neutral”. Meanwhile, Britvic surged 11.1% after rejecting a revised unsolicited cash offer from Carlsberg Group. On the flip side, B&M fell 1.6% following a downgrade by Morgan Stanley from “equal-weight” to “underweight”.
Investors in the US are also awaiting PMI figures later in the day, as market focus remains on economic indicators influencing global sentiment.
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