LONDON, April 17 — British stocks climbed today, underpinned by industrial metal miners, while the pound strengthened after a slower-than-expected pace of inflation fall pushed back hopes of a rapid rate cut by the Bank of England.
The resources-heavy FTSE 100 and the mid-cap FTSE 250 gained 0.5 per cent each after posting steep losses yesterday.
Industrial metal miners gained 2.7 per cent, with shares of Rio Tinto up 3 per cent, after iron ore futures climbed to their highest levels in more than five weeks.
Aerospace and defence sector was the top loser, dropping nearly 1 per cent, as geopolitical risks over the Middle East conflict persisted.
Britain’s inflation slowed to 3.2 per cent in March, compared with 3.4 per cent a month ago, but was slightly higher than economists’ expectations of 3.1 per cent, according to a Reuters poll.
“We are in that consolidation phase and in between narratives. The market is shifting from a soft landing to higher for longer it creating a little bit of noise,” said Lilian Chovin, head of asset allocation at the British private bank Coutts.
“Therefore, we are going to remain in this range until more data gets released and we have confirmation of a slowdown.”
Traders now expect the Bank of England to cut rates by 38 basis points in 2024, with the possibility of a first rate cut only in November.
US Federal Reserve Chair Jerome Powell said on Tuesday that monetary policy needs to be restrictive for longer, further dashing investors’ hopes for meaningful reductions in borrowing costs this year.
Among individual stocks, ASOS advanced 5 per cent after the online fashion retailer appointed a new CFO and reiterated its full -year forecast for adjusted core profit despite stiff competition and excess inventory.
Shares of Burberry gained 2 per cent after rival LVMH’s first-quarter sales rose and roughly met forecasts.
Entain gained 3.6 per cent after the owner of Ladbrokes posted better-than expected first-quarter online gaming revenue due to a rise in its customer base. — Reuters
