The FTSE 100 marched higher on Monday, ahead of a raft of key economic data and an expected interest rate cut by the Bank of England later this week.
The FTSE 100 index closed up 102.28 points, 1.1%, at 9,751.31. The FTSE 250 ended 172.61 points higher, 0.8%, at 22,049.16, but the AIM All-Share ended down 2.13 points, 0.3%, at 749.23.
In Europe, the Cac 40 in Paris closed up 0.7%, while the Dax 40 in Frankfurt ended 0.2% higher.
This week’s schedule includes central bank decisions in the UK, Europe and Japan – plus inflation and retail sales prints in the US and the UK.
In addition, Tuesday brings US non-farm payrolls data for October and November.
Joshua Mahony, at Scope Markets, said: “Despite the fact that we have such an incredibly busy week up ahead, traders are taking a largely positive tone, with the Fed’s rate cut meaning that the jobs report and inflation data will have less of an immediate impact on monetary policy.
“Meanwhile, the elevated levels of market confidence around both the Bank of England’s rate cut and the Bank of Japan’s hike, does alleviate much of the risk that we see any major unexpected hurdles for traders to navigate.”
The pound was quoted higher at 1.3390 dollars at the time of the London equities close on Monday, compared to 1.3356 on Friday.
Looking ahead to the BoE rate call, Tom Stevenson, of Fidelity International, said: “The conventional wisdom is that rates will fall by a quarter percentage point on Thursday to 3.75%, with swaps markets pricing in a 90% chance of a cut.
“It would be the sixth rate cut since the Bank started cutting in the summer of 2024.
“But the decision remains a close call, and it is possible that Bank governor Andrew Bailey will be forced to use his casting vote this week.”
He added: “Interest rates are thought to be approaching the so-called ‘neutral rate’ at which they neither stimulate nor constrain the economy and that has caused a roughly even split on the monetary policy committee between members who think rates should fall further to boost growth and those who think caution should be the watchword until it is clear that inflation is under control.”
Stocks in New York were little changed at the time of the London equity close on Monday.
The Dow Jones Industrial Average was down 0.1%, as was the Nasdaq Composite, while the S&P 500 index was 0.1% higher.
The yield on the US 10-year Treasury was quoted at 4.17%, trimmed from 4.19% on Friday. The yield on the US 30-year Treasury was at 4.83%, narrowed from 4.86%.
Morgan Stanley said this week’s US jobs data could be more important for equities’ perception of interest rate policy going forward than last week’s FOMC meeting.
“With the equity return/interest rate correlation falling deeper into negative territory last week, we are now firmly back in a good is bad/bad is good regime. This implies that moderate labour market weakness is likely to be viewed in a bullish context by equity markets,” the bank commented.
Meanwhile, New York Federal Reserve president John Williams said the US economy appears to be “turning the corner” after a year dominated by uncertainty, with solid growth expected in 2026.
“What’s striking is that despite all the uncertainty, the US economy has shown considerable resilience and looks poised to pick up steam next year,” Mr Williams added.
On the FTSE 100, gains were led by financials, with Prudential up 3.2%, Hiscox up 3.0%, Barclays up 2.2% and NatWest up 3.0%.
Haleon gained 2.9% as Morgan Stanley named it “top pick” in the Home & Personal Care sector.
Having lagged in 2025, Haleon looks set to accelerate organic sales growth in 2026 as it laps US destocking, in the broker’s view.
Marks & Spencer, up 2.0%, was named as Jefferies’ favoured UK retailer.
The broker is cautious on consumer sentiment generally, with M&S its only “buy” rating in the retail sector.
Reflecting this caution, Jefferies downgraded Tesco, Next and Associated British Foods.
BAE Systems lagged behind, down 0.4% amid hopes of progress in Ukraine.
Over the weekend, Ukraine’s president Volodymyr Zelensky conceded that the country would be willing to give up its long-term goal of Nato membership, if the US and Europe offered security guarantees to prevent future Russian aggression.
On Monday, Mr Zelensky said that the two-day talks in Berlin with US envoys on ending the war with Russia were “not easy” but “productive”.
Shares in Ukraine-focused Ferrexpo climbed 6.2%.
Elsewhere, TT Electronics fell 20%, after DBAY Advisors said it plans to vote against a proposed £287 million takeover of TT and ruled out making a bid itself.
DBAY Advisors, the Isle of Man-based asset management firm, is the largest shareholder in TT, with a just under 25% stake.
Last Tuesday, DBAY said it was considering making a bid for TT, which manufactures electronic components.
However, on Monday, DBAY ruled out such a move, confirming it will instead vote against the agreed takeover by Switzerland’s Cicor Technologies, a bid it deems to be “unattractive”.
Also, late on Monday, TT said it continues to believe that the all cash offer from Cicor “fairly values” the company. However, it believes that the share alternative currently “undervalues TT and its future prospects”.
Therefore, TT now considers only the terms of the all-cash offer to be “fair and reasonable”. Last month, Cicor amended its offer for TT to 150 pence a share, all in cash. TT shareholders can also opt to receive 0.0084 of a Cicor share.
On the FTSE 250, Frasers jumped 7.9% after starting a share buyback of up to £70 million.
The owner of the Sports Direct, Flannels and Frasers retail chains said the buyback will be completed by April 24 next year.
Bank of America called it an “early festive gift” for shareholders, which should be 2% earnings accretive and “well receive”.
“As such, in and of itself the impact is modest, but this is an important signal to the market following the allocation of £2.4 billion into capex and building stakes in listed investments and investment properties during 2025 and 2026,” the broker added.
Brent oil was quoted at 60.39 dollars a barrel at the time of the London equities close on Monday, down from 61.30 late Friday.
The biggest risers on the FTSE 100 were Airtel Africa, up 12.20 pence at 319.20p, Antofagasta, up 108.00p at 3,040.00p, Prudential, up 34.00 pence at 1,106.50p, Auto Trader, up 19.00p at 621.00p, and Hiscox, up 40.00p at 1,389.00p.
The biggest fallers on the FTSE 100 were Fresnillo, down 48.00p at 2,856.00p, Rightmove, down 6.60p at 527.20p, Hikma Pharmaceuticals, down 13.00p at 1,503.00p, Smith & Nephew, down 10.00p at 1,205.50p and BP, down 1.80p at 437.45p.
Tuesday’s economic calendar has UK jobs and average earnings data, US non-farm payrolls figures and US retail sales data.
Tuesday’s UK corporate calendar has full-year results from Hollywood Bowl and a trading statement from IG Group.
