UK’s FTSE 100 sees weekly decline, Pound strengthens on potential Fed rate cut- Republic World

UK’s FTSE 100 in focus: The UK’s primary stock index, the FTSE 100, concluded the week with slight losses, predominantly driven by declines in aerospace and defence stocks. 

Conversely, the pound experienced its most robust performance since November following softer US data, hinting at a potential interest rate cut by the Federal Reserve.

The internationally oriented FTSE 100 closed 0.4 per cent lower for the day, marking its third consecutive week of decline. 

It trailed behind European and US counterparts, which surged to record highs fueled by gains in technology stocks throughout the week.

In contrast, the midcap FTSE 250 index experienced a notable uptick of 1.3 per cent for the week, driven by an annual budget statement that yielded no surprises. It closed the day with a 0.1 per cent increase.

The pound strengthened by 0.18 per cent against the dollar, reaching $1.2826, its highest level since August. 

The surge followed US job growth acceleration in February, although accompanied by a rise in the unemployment rate and a slowdown in wage growth.

Charles Hepworth, investment director at GAM Investments, remarked that if the unemployment rate continues to rise and wage growth decelerates, it could amplify the possibility of rate cuts by the Federal Reserve.

Aerospace and defence stocks experienced sectoral losses, snapping a seven-session winning streak, primarily impacted by weakness in Melrose shares following warnings of ongoing supply chain challenges earlier in the week.

Real estate investment trusts and real estate stocks, however, saw gains of 1.4 per cent and 1.3 per cent, respectively, helping mitigate losses on the benchmark index.

Among individual stocks, DS Smith surged 5.2 per cent, leading gains on the benchmark, after Mondi reached a preliminary agreement for an all-share offer to acquire the company for £5.14 billion. In contrast, Mondi’s shares declined by 2.3 per cent.

Informa edged 0.3 per cent higher after raising its earnings forecast for the current year and posting positive 2023 profits. 

On the other hand, Entain slipped 5.4 per cent, ranking as the worst performer in the FTSE 100, extending losses from the previous session following regulatory changes that would impact its 2024 profits.

(With Reuters Inputs)