London’s FTSE 100 hits five-month high as eurozone interest rates cut
The index rose 56.06 points, or 0.67%, to close at 8,385.13, marking the highest closing level since May 21.
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Your support makes all the difference.London’s FTSE 100 hit a five-month high on Thursday after a second day of gains, as eurozone interest rates were cut for the second time in a row.
The index rose 56.06 points, or 0.67%, to close at 8,385.13, marking the highest closing level since May 21.
Over in Frankfurt, the European Central Bank (ECB) cut its headline interest rate by 0.25 percentage points to 3.25%, its second reduction in a row and third of 2024.
The ECB said it was confident to keep cutting rates as the “disinflationary process is well on track” with economic data continuing to head downward.
Experts said the central bank had also been taking note of growing signs that economic activity is starting to slow across the euro area.
Ryan Djajasaputra, an economist at Investec Economics, said: “The weakness in manufacturing has been a feature of the economy for over a year, but what has become more apparent in recent months is the slowing in the services sector and household consumption at large, which the ECB noted had been weaker than expected.
“However, (Christine) Lagarde did stress that the ECB does not anticipate a recession.”
He added that the ECB remained “tight-lipped” over its exact path of policy, with it giving no indication as to whether it will be kickstarting a faster pace of rate-cutting.
Stocks were given a boost over in Paris, where the Cac 40 climbed 1.22%. In Frankfurt, the Dax rose 0.77% at close.
In New York, the S&P 500 and Dow Jones were both up about 0.3% by the time European markets closed.
The pound was up about 0.2% against the US dollar at 1.3, and up around 0.4% against the euro at 1.2.
In company news, Simply Be and JD Williams fashion retailer N Brown said it has agreed to a takeover by Joshua Alliance, whose family built up the group in the 1960s.
Mr Alliance said the fashion firm would be better off in private hands as, due to its current shareholder ownership, it is “not benefiting from being listed on the AIM market, whilst having to bear significant costs associated with its listing”.
Shares in N Brown soared by 43.3% at close as investors cashed in before the acquisition is finalised.
Rentokil also made strong gains on Thursday after the pest control business reported rising sales and said it was making progress with efforts to trim its cost base.
The company leapt to the top of the FTSE 100 after telling investors that it was “taking action to mitigate cost overruns”, including reducing its headcount and more tightly managing overtime and staffing.
Shares in Rentokil closed 8.7% higher.
The biggest risers on the FTSE 100 were Rentokil, up 29.9p to 371p, Melrose Industries, up 17.3p to 448.8p, Informa, up 31.8p to 841p, Anglo American, up 77p to 2,337.5p, and Barclays, up 8.05p to 245.1p.
The biggest fallers on the FTSE 100 were Mondi, down 103.5p to 1,286.5p, Rio Tinto, down 93p to 4,946p, United Utilities, down 20.5p to 1,085.5p, Persimmon, down 31.5p to 1,688.5p, and Smiths Group, down 29p to 1,626p.