FTSE 100 storms higher in cyclical rally led by NatWest

London’s leading index stormed higher on Friday, with cyclical sectors leading the charge after a strong Asian session helped boost China-focused stocks and NatWest earnings beating estimates.

The FTSE 100 was 1.3% higher at 7,701 at the time of writing.

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“As we head towards the spring, the market seems to be getting more optimistic and, after a tricky few weeks, the FTSE 100 is close to regaining the levels it saw at the start of 2024,” said AJ Bell investment director Russ Mould.

“The inflation shock from the US earlier in the week seems to have been shrugged off for now, even if it has pushed back expectations for when the Federal Reserve will start cutting interest rates.

“Gains in Asia and the US overnight were augmented by better-than-expected results from NatWest which helped drag the rest of the banking sector higher and the retail sector was lifted by a pretty stunning rebound in retail sales in January from December’s miserable figures. The data was way ahead of expectations and suggests, despite the UK slipping into a technical recession, the UK consumer remains surprisingly resilient.”

The rally was broad, with 87 of the FTSE 100 constituents gaining at the time of writing. China-focused stocks added significant points to the index, helping the FTSE 100 outperform European indices.

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Miners Antofagasta, Rio Tinto, and Anglo American were all up over 3%.

NatWest was the top gainer, jumping 5% after the bank’s full-year profits beat analyst estimates. The bank benefitted from the higher interest rate environment and managed to minimise the outflow of customer deposits. Provisions for bad debts were also contained as economic conditions supported loan book health.

Lloyds and Barclays rose 3.4% and 2.3% in sympathy.

Heavyweight AstraZeneca rose 2.5% ahead of its ex-dividend date next week.

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