On Friday, London markets rebounded, that phase of optimism is stocks led by the Federal Reserve rate cuts and a surge in the oil price for commodity stocks. After several days of losses, the oil prices rebounded after the US Navy has destroyed an Iranian drone in the Strait of Hormuz, reigniting the tensions.
FTSE 100 index reversed the losses of two days by climbing 0.7% and the domestically-focused FTSE 250 index also rose 0.4%. FTSE 100’s index of oil and mining heavyweights also reacted positively by making substantial gains, having fallen in some recent days.
On Thursday, U.S. stocks were led higher after the New York Fed president John Williams said that it “pays to act quickly, to the lower rates at the first sign of economic distress.”
According to CME’s FedWatch tool, the Market expectations for a 50 basis point cut at Fed’s July meeting surged as a result. The possibility of fell again, when a New York Fed spokesperson insisted the Williams’ comments were the part of an academic speech and it’s not about policy actions.
AJ Bell investment director Russ Mould said: “The market’s obsession with when or if the U.S. Federal Reserve will hit the button on rate cuts continues, with hopes of action at its meeting at the end of this month growing. “This puts the FTSE 100 on course for a strong end to the week.”
In this bullish session the oil and mining stocks were among the biggest risers, following the increased tensions between Iran and the U.S., shares of Antofagasta led the rally by jumping 2.8%, while Anglo American also advanced 1.5%.
Advertising giant WPP slipped 3% after the French competitor Publicis warned the traditional marketing trends were also declining, and weighing on its performance, in particularly in the United States.
The British media company ITV shares edged up 1.7% after the news that it struck a deal with the BBC to launch BritBox, which is a new streaming service. BritBox streaming service will launch in fourth quarter and will be priced at £5.99 a month.