FTSE 100 slips ahead of central bank action

The FTSE 100 gave up early gains on Tuesday as the weight of concerns about the timing of interest rate cuts, softer economic data, and geopolitical risks dragged on London’s leading stocks.

Another record high for the S&P 500 envigorated the bulls in the early hours of trade on Tuesday, but the rally faded throughout the session, and the FTSE 100 was trading down 0.27% at the time of writing.

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“For now, markets have shrugged off their New Year malaise, but investors’ newfound optimism could be tested in the near term with central bank meetings rapidly approaching on the horizon. At some point rates will have to be cut for stocks to maintain their upward trajectory,” said AJ Bell investment director Russ Mould.

Investors will be conscious the ECB is due to announce its interest rate decision on Thursday, providing the first material insight into the thinking of major central banks this year.

ECB officials have regularly played down the prospect of interest rate cuts in Europe this year, and Thursday’s instalment will be eyed for any hints of dovishness from policymakers.

FTSE 100 movers

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Miners were the standout performers as the sector bounced back from a string of poor sessions. Anglo American rose over 2%, Rio Tinto gained 1.8%, and Fresnillo 1.8%.

Indeed, there was a trend of stocks that have had a poor start to the year outperforming on Tuesday. Ocado, one of the FTSE 100’s heaviest-hit constituents of 2024, was among the risers, adding 1.9%.

Bargain hunters also took a shine to JD Sports as the sportswear retailer ticked higher after building a base around 110p. Yesterday, we explained the attractions of JD Sports in our article titled ‘JD Sports: shares look attractive after a terrible start to 2024.’

JD Sports shares had added another 1.4% at the time of writing on Tuesday.

Traders booked profits in Rolls Royce, which slipped 1.8% after meeting stiff resistance at 310p.

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