The FTSE 100 rose at the start of a pivotal week for global monetary policy, with defensive stocks leading gains across the index.
Investors rotated into traditionally safer sectors as markets braced for a series of high-stakes central bank decisions expected to shape the economic outlook.
Defensive stocks, which include utilities, healthcare, and consumer staples, tend to attract buyers during periods of uncertainty when risk appetite softens.
The moves reflected broader caution across financial markets as traders positioned themselves ahead of major interest rate announcements from leading central banks.
Central bank policy decisions carry significant weight for equity markets, as interest rate changes affect borrowing costs, corporate earnings, and investor sentiment simultaneously.
Rate-sensitive sectors were among the most closely watched, with investors assessing whether policymakers would hold, cut, or signal future changes to their monetary stance.
The Bank of England is among the institutions under scrutiny this week, with UK markets particularly sensitive to any shift in guidance from policymakers.
Global peers including the US Federal Reserve have also been navigating a complex environment of slowing inflation and uncertain growth prospects heading into 2026.
Equity strategists have noted that defensives often outperform in weeks dominated by macroeconomic events, as investors seek stability over higher-risk growth plays.
The FTSE 100 has shown resilience in recent sessions, supported by its relatively high concentration of large-cap defensive and commodity-linked stocks compared to other major indices.
Trading volumes were expected to remain elevated throughout the week as each central bank announcement landed, with volatility a persistent risk for market participants.
Analysts cautioned that any surprise in the tone or substance of central bank communications could quickly reverse early gains and shift sentiment across global markets.