Stock prices in London closed the week on a positive note, with the FTSE 100 recording a 1% gain after a five-week losing streak. The cautious sentiment in the market was influenced by various factors, including domestic inflation falling to the Bank of England's 2% target earlier in the week. This development increases the likelihood of an interest rate cut in August, which could have implications for the stock market. [85c326ae]
The FTSE 100 dropped 0.4% on the day, but the overall gain for the week indicates a shift in investor sentiment. The market may be reacting to the potential for lower interest rates, which can stimulate economic growth and boost stock prices. [85c326ae]
The positive close for London stocks comes after a mixed performance earlier in the week. On Thursday, the FTSE 100 made modest gains, while the FTSE 250 slipped. This mixed performance was influenced by several factors, including the announcement by Chancellor Jeremy Hunt of a national insurance cut worth £10 billion during the autumn statement. [7975dfc0]
In company news, AJ Bell reported an 8.3% growth in revenue for 2023 in constant currency. However, pretax profit dropped to £345 million from £595 million, contributing to the cautious sentiment in the market. [e8b3496a]
Another development that could have influenced the market was the inclusion of Country Garden, one of the biggest players in China's property industry, on a draft list of 50 developers eligible for more financial support. This news could have implications for the global property market and investor sentiment. [9059c7e6]
Additionally, flash PMI releases were expected for the EU, Germany, and the UK, providing insights into the health of the manufacturing and services sectors. These economic indicators can impact market sentiment. [d8ac4035]
Berkeley Group, a FTSE 100 housebuilder focused on London and the southeast, is set to publish its full-year results on Wednesday. The company builds more expensive homes and is expected to provide an assessment of the state of the housing market. Sentiment in the market has shifted recently, with estate agents and developers suggesting that the recovery seen in the first couple of months of 2024 has stalled. Berkeley had already secured all sales for its financial year by February, so no surprises are expected in the numbers. The company expects to deliver an annual pre-tax profit in line with market expectations. [2ce242c5]
Overall, the mixed performance in the London stock market earlier in the week can be attributed to a combination of factors, including the closure of US markets for Thanksgiving, the national insurance cut announcement, AJ Bell's financial results, the inclusion of Country Garden on the draft list, the flash PMI releases, and the anticipation of Berkeley Group's full-year results. [c4e98c7b]
London stocks are expected to edge higher as investors await the latest US non-farm payrolls report. Analysts estimate that the US economy may have added around 180K new nonfarm jobs last month, with the unemployment rate remaining steady near 3.9% and wages growth slightly accelerating on a monthly basis. A soft jobs report could support dovish Fed expectations and weigh on the US dollar.
In corporate news, housebuilder Bellway maintains its guidance for housing completions this fiscal year but raises its forecast for pricing. Drinks maker C&C Group announces that CEO Patrick McMahon is stepping down after accounting errors in the last three years. [d7ad8c75]
London stocks closed the week positively after domestic inflation fell to the Bank of England's 2% target earlier this week, increasing the likelihood of an interest rate cut in August. The FTSE 100 dropped 0.4% on the day but recorded a 1% gain, ending a five-week losing streak. [85c326ae]