UK’s main stock index hit a three-month high on Friday, set to eke out gains for the topsy-turvy month, with bank shares in the lead ahead of crucial global economic data that could shed further light on the pace of rate cuts by top central banks.
The blue-chip FTSE 100 index was up 0.3% as of 0706 GMT, on track for its second straight monthly gain and third consecutive weekly advance. The domestically-focused mid-cap FTSE 250 rose 0.2%, but eyed a monthly decline.
The pharmaceutical sector was the top monthly sectoral gainer, while personal goods shares were the worst hit.
On the day, lenders Close Brothers Group and HSBC steered the banks index, rising 0.8% to the top of the bourse, while telecommunication and media stocks were the biggest laggards.
August marks a turbulent month for financial markets globally as concerns over a likely US recession rocked risky assets, with unwinding of yen-funded carry trades also elevating market volatility. However, relief trickled in eventually as the Federal Reserve hinted at an imminent interest rate cut.
FTSE 100 edges up led by pharmaceuticals, insurers
The focus now turns to the US inflation report, which is keenly monitored by the Fed, and the euro zone’s flash inflation data, both due later in the day.
As for monetary policy bets, the Bank of England is seen keeping interest rates high for longer than in the US and the euro zone.
While the Fed and the European Central Bank are expected to cut in September, the BoE is seen holding rates, LSEG data showed.
Back home, house prices unexpectedly fell by 0.2% on-month in August but were 2.4% higher than a year earlier, Nationwide Building Society data showed.
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