Could this be the start of the Santa rally? The FTSE 100 jumped on Monday, with most constituent shares gaining ahead of the Bank of England interest rate decision on Thursday.
London’s leading index shook off a poor session for US shares on Friday, gaining 0.9% as cyclical sectors drew investor interest.
“Despite a sell-off in Asia, the FTSE 100 got off to a strong start on Monday, supported by higher precious metals prices,” says AJ Bell investment director Russ Mould.
“The continuing surge in gold and silver helped lift Endeavour Mining and Fresnillo, and there was broader strength in the mining sector, despite weak Chinese data. The sickly industrial production and retail figures strengthen the argument for new stimulus efforts from the government in Beijing.
“The relative lack of exposure to AI in the UK is proving more of a boon of late amid increased nervousness about valuations in the space.”
UK investors will be looking forward to the Bank of England’s interest rate decision this week and an early dose of festive cheer when rates are expected to be cut to 3.75% – the lowest level since January 2023.
Matt Britzman, senior equity analyst, Hargreaves Lansdown, explained: “UK markets have a clear focal point this week, with the Bank of England in the spotlight and a rate cut on Thursday widely seen as a done deal.”
“Markets are pricing in around a 90% chance of a move, so, absent any shocks, the decision itself matters less than the Bank’s tone. Beyond domestic policy, UK assets will also take cues from the flood of delayed US economic data, making this a week where macro forces are firmly in the driving seat.”
Burberry was the top riser, adding 3%, as the luxury brand traded towards the top end of its trading range and looked set to close the year out with annual gains in excess of 30%.
IAG was another stock near the top of the leaderboard on Monday that has enjoyed gains through 2025.
Hikma was the top faller after announcing its CEO would step down after a terrible run for the shares.
“Things may not have got any worse since November’s disappointing update but it’s no shock to see Hikma Pharmaceuticals CEO Riad Mishlawi head for the exit,” Russ Mould said.
“The shares have lost more than a quarter of their value in 2025. The most damaging part of last month’s trading statement was the reduction in medium-term profit growth expectations – which forced a broader reassessment of the investment case than a mere blip in trading would have done.