The UK’s FTSE 100 index reached a new record high of 20,491.99 points on Wednesday, driven by positive corporate updates and anticipation of the Bank of England’s interest rate decision.
The index closed the session up by 0.5%.
A depreciating pound, which fell against the dollar due to expectations of a dovish stance by the Bank of England in their upcoming monetary policy meeting, also bolstered the index.
Investors are already pricing in a 25-basis-point rate cut for August, with a 40% likelihood of such a reduction occurring as soon as June, fueled by recent dovish market sentiments and a slowdown in UK inflation.
“April’s inflation data, released later in the month, is likely to prove critical in any decision.
“A better than expected number could see July come into play, but if inflation proves stickier than expected there is no rush to cut,” explained Jessica Shuman, a senior investment specialist at Insight Investment.
Among notable stock movements, AstraZeneca’s shares rose by 1.2% after the pharmaceutical giant announced a global withdrawal of its COVID-19 vaccine, citing an excess of updated vaccines available since the pandemic’s decline.
Informa’s shares also climbed by 2.3% following the event organizer’s optimistic annual revenue and profit forecast, further boosted by an increased share buyback program.
The FTSE 250 index, tracking mid-cap companies, increased by 0.4%, maintaining its position around 15-month highs.
In significant individual stock news, John Wood Group’s shares surged by 16.9% after rejecting a £1.42 billion buyout offer from Dubai-based Sidara, which it claimed undervalued the company’s prospects.
Contrastingly, the industrial metals miners index saw a decline of 1.2%, leading the sectoral losses, influenced by a stronger dollar and falling base metal prices.
The automobile and parts index also dipped by 1.1%, impacted by disappointing results and forecasts from German automaker BMW.