On Monday, the two main stock indexes in the United Kingdom reached highs of more than two weeks, as economically sensitive sectors got a boost from an upbeat global mood.
Meanwhile, drugmaker GSK’s spinoff, Haleon, made its debut on the London Stock Exchange (LSE).
On Friday, Asian and European markets were tracking a rally on Wall Street, when risk sentiment got a boost because of easing of concerns about a 100 basis points increase in the interest rate by the US Fed and better-than-expected earnings of some banks.
There was a 1.5% gain in the blue-chip FTSE 100 index and a 0.9% gain in the domestically focused FTSE 250 index. This took both these indexes to their highest level, last seen on June 30th.
The FTSE 100 got its biggest boost from oil majors like BP and Shell, as they marked an increase of 4%. This was because of a rise in oil prices due to tight supplies and a weakening US dollar.
There was a more than 3% gain in mining giants Rio Tinto and Glencore, as measures from Chinese regulators for preventing a potential crisis in the real estate market gave the metal prices a boost.
Nonetheless, investors were still moving with caution because this week will mark the beginning of the earnings session in Europe amid political uncertainties, slowing economic growth, and rising inflation.
Market analysts said that the price action was likely going to be volatile. They said that the environment was expected to be such that earnings misses would get more of a reaction than upbeat earnings.
This week, a slew of data is also scheduled for release in the UK, which has the focus of investors. This includes UK inflation data, employment reports as well as retail sales numbers. All of these would provide some clues about the economy’s health and the outlook of the monetary policy.
The Bank of England is also scheduled for its policy meeting in August and it is likely that the data this week will impact their decision regarding the magnitude of the interest rate hikes.
Inflation is expected to climb to new heights, which could drive the bank into becoming more aggressive in terms of rate hikes, but this could slow down the economy further.
Haleon made its debut on the London Stock Exchange at a price of 330 pence, which put the total market valuation of the company at 31 billion pounds. This makes it one of the biggest listings on the LSE in almost a decade. There was a 0.3% dip in the share prices of GSK.
There was also a 9.6% gain recorded in Euromoney after a 1.66 billion pound price was proposed for the business-to-business information firm. This deal came from a group headed by French investment company Astorg Asset Management.
A 12.8% decline was also recorded in car insurer Direct Line’s share prices, as the company made downward revisions to its profit outlook for the year.