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FTSE 100 thrashes European rivals as markets eye rate cut amid easing of Iran tensions

The FTSE 100 is outperforming its European rivals and within sight of a record high. The FTSE-100 index was up 115.12 at 8010.97 at 11.45am on Monday (April 22). In February 2023, the FTSE 100 posted an all time high of 8,047.

Shares have been lifted by hopes the Bank of England will cut interest rates by half a percentage point by the end of the year and the first cut priced in for August.

The easing of tensions in the Middle East, with no further attacks between Iran and Israel at the weekend, has also buoyed investors.

AJ Bell Investment Director Russ Mould said: “The FTSE 100 bounced back strongly on Monday amid relief that tensions in the Middle East seem to have been contained for now.”

He added: “Travel and retail stocks were among the gainers on the FTSE 100, with precious metals miner Fresnillo the only stock showing notable weakness, with gold and silver prices dipping as demand for safe havens eased.”

Marks & Spencer surged four percent or 9.3p to 255.1p while Next climbed by two percent or 212p to 8,986p. Rumours Ocado is under pressure from investors to consider a Nasdaq listing meant the retail-to-technology stock topped the FTSE 100 risers.

Ocado’s shares jumped seven percent or 24p to 371.2p, although the firm is still almost 50 percent lower on the year-to-date. Sainsbury’s rose 7.6p to 266.4p before the supermarket giant posts its annual results on Thursday (April 25).

Meanwhile, Paris’s CAC 40 was up 14.57 to 8,036.98 just after midday while Frankfurt’s DAX rose 79.96 to 17,817 at 12.20pm.

Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown, said: “The FTSE 100 has spring in its step at the start of the week, amid an easing of geopolitical tensions.

“The pulse of positivity comes in the absence of fresh retaliatory attacks by Israel or Iran and the US flexing its funding muscle and passing a crucial aid package for Ukraine.”

Oil prices also dipped to almost four week lows with Brent crude down more than one percent in early trading to its lowest since March 27.

Monday’s rallies come after tech stocks had a tough week, with a 10 percent drop in Nvidia’s share price last week. Microsoft, Alphabet, Meta and Tesla are to deliver earnings in the coming days.

Earnings will be under even greater scrutiny this week, but the tech “pull back” means “savvy investors” have a chance to top up their portfolios at lower prices, according to Nigel Green, CEO of asset management firm deVere Group.

Meanwhile, the UK’s biggest high street lenders are set to report lower profits over the start of the year after a bumper 2023 which saw earnings peak as borrowing costs soared.

Lloyds, Barclays and NatWest will be updating shareholders on their first-quarter financial results on Wednesday, Thursday and Friday respectively.

The banking sector was buoyed last year by UK interest rates hitting their highest level for more than a decade, meaning lenders benefited from the cost of borrowing, particularly mortgages, surging.

Lloyds and HSBC were among the lenders to report record-high annual profits for 2023. But earnings are set to have slowed as the high street giants feel the effects of a shift in customer behaviour, including more people locking away their cash into savings accounts with higher returns.


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