The FTSE 100 crept towards the 10,000 mark on Friday, buoyed by interest rate cuts by the Bank of England and the Federal Reserve earlier in the week.
London’s leading index staged a late rally yesterday afternoon and added another 0.1% on Friday to trade less than 2% away from the key psychological level for the index.
But the gains were less than convincing with fresh concerns about the pace of rate cuts next year putting a dampener on lower borrowing costs announced yesterday.
“The FTSE 100 ticked higher in early trading after lower-than-expected inflation in the US helped lift shares on Wall Street and across Asia overnight,” said AJ Bell head of financial analysis Danni Hewson.
“The knife-edge nature of yesterday’s rate decision by the Bank of England is keeping UK stocks in check and stalled the FTSE 100’s push towards the 10,000 mark. Investors have responded to the reality that we could be approaching the end of the current rate-cutting cycle.
“This saw housebuilders lose momentum as hopes for a significant drop in mortgage costs in the coming months begin to fade away. An unexpected drop in retail sales only added to the gloom around the consumer backdrop in the UK.”
Barratt Redrow was the top faller at the time of writing, losing 2.4%, while Persimmon gave up 1.9%.
JD Sports was also among the faller after Nike shares sank on US trading. JD Sports relies heavily on Nike as a supplier and its struggles with innovation has dogged JD since the start of the year.
“Nike shares fell nearly 11% in after-hours trading after a sharp decline in Chinese demand and the impact of tariffs on margins took the shine off the fact that second quarter revenue had beaten expectations: earnings fell 32% year-on-year,” explained Derren Nathan, head of equity research, Hargreaves Lansdown.
DCC was the top riser, adding 2%, after announcing the results of a tender offer.