London Stocks Rally Amid Interest Rate Cut Speculations
London shares increased as weak labor data reinforced expectations of more interest rate cuts, diverting investor focus to U.S.-China trade discussions. The FTSE 100 rose 0.4%, nearing a record high. The home construction sector led gains with energy shares up and precious metal miners declining significantly.
London shares advanced on Tuesday, driven by soft labor market data strengthening predictions of further interest rate cuts this year. Investors also focused on the progress in U.S.-China trade negotiations.
The FTSE 100 index climbed 0.4% by mid-morning, coming within touching distance of a record high seen in late February. Recent data indicated a steep slowdown in British pay growth and a rise in unemployment to its highest level in nearly four years by April, encouraging expectations for the Bank of England to continue cutting interest rates.
Elizabeth Martins from HSBC suggested that the latest figures might sway the BoE towards an August rate cut, despite earlier hints at a possible pause. Meanwhile, the home construction sector led the market gains driven notably by Bellway's upward revision of its annual home-building forecast. Energy shares rose in response to higher oil prices, while mining stocks saw steep declines.
(With inputs from agencies.)
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