FTSE 100 dips as banks and energy drag, yet weekly gains in sight

FTSE Futures Updates

London’s FTSE 100 experienced a retreat from its peak of over one week on Friday, influenced by declines in the banking and energy sectors. Nevertheless, it was positioned for gains amid a week filled with significant economic data and central bank decisions.

The blue-chip FTSE 100 index fell 0.6% to 10,751.57 points by 0953, poised for its biggest weekly jump since late July. The midcap FTSE 250 was flat, but was on track for its sharpest weekly rise since early August.

  • On Friday, financial stocks exerted the most significant downward pressure on the index. Banks experienced a decline of 0.7%, with Lloyds and HSBC reporting decreases of 1.2% and 0.6% respectively.
  • Energy companies were down 0.8%, as oil prices fell for a third straight session on easing concerns over Saudi supply disruptions.
  • Telecom stocks were the biggest percentage decliners, experiencing a 4.3% tumble. Airtel Africa opened new tab lost 8.8% after a report said its Airtel Money was considering downsizing its London IPO.
  • On the flip side, precious metal miners rose 1.6%, as gold prices extended their rally.
  • Data indicated that British consumers unexpectedly raised their shopping activity in August, despite a reduction in fuel purchases following a surge in prices.
  • The report follows the Bank of England’s decision to maintain interest rates, while cautioning that an extended conflict in Iran could necessitate an increase in rates by policymakers.
  • Brokerages adjusted their rate forecasts in response to the decision, with Barclays aligning with J.P. Morgan in anticipating a rate increase in November.
  • The central bank on Thursday also paused UK government bond sales for six months and halted long-dated gilt sales entirely, just days after a global bond rout. Gilts stabilised on Friday following the previous session’s rally.
  • The US Federal Reserve hiked rates by 25 basis points this week, and the central bank reinforced its fight against inflation, sparking a rally across global markets on Thursday.
  • Among individual stocks, Softcat bottomed the FTSE 250 with a 2.8% fall after the IT firm agreed to buy US-based GDT at an enterprise value of $1.05 billion.