On Friday, the UK’s FTSE 100 index soared to its highest peak in a year, buoyed by optimism surrounding the Bank of England’s (BoE) recent dovish stance on its monetary policy.
This upbeat sentiment was further bolstered by Phoenix Group’s announcement of a promising financial outlook, marking its best performance in four years.
The FTSE 100 climbed by 0.6%, marking its second consecutive week of gains.
This upward trajectory was significantly influenced by Thursday’s nearly 2% increase, following the BoE’s indication of a potential direction towards interest rate reductions.
Phoenix Group stood out as the day’s star performer, with its shares surging by 8.4%.
The company projected a substantial profit increase and enhanced operating cash flow by 2026, positioning itself at the forefront of the index’s gainers.
The life insurance sector led the charge among industry groups, registering a 2.2% advance.
Russ Mould, investment director at AJ Bell, highlighted Phoenix’s appeal to retirees, attributing its popularity to generous dividends.
Mould remarked, “Life insurer Phoenix is incredibly popular with retirees thanks to its generous dividends and shareholders will be celebrating after better-than-expected results and a positive outlook for cash generation and debt reduction.”
Concurrently, the British pound dipped to a monthly low as consumer spending showed no growth in February, and BoE Governor Andrew Bailey hinted at possible rate cuts within the year.
This scenario favored dollar-earning companies on the FTSE 100, such as Unilever and Reckitt Benckiser, as they benefitted from the weakened pound.
However, the mid-cap FTSE 250 index experienced a slight decline, pulled down by Darktrace’s 7.4% fall following KKR’s technology growth fund’s exit from its investment in the cybersecurity company.
Other notable movements included J D Wetherspoon’s 6.3% drop after reporting slowed sales growth and JD Sports’ 6.3% decline, influenced by Nike’s revenue warning for the first half of fiscal 2025.
In contrast, Legal & General saw a 1.4% rise amid news of retracting its plans for a China business license and significantly reducing its onshore staff, demonstrating the varied performance across sectors and companies within the UK’s stock markets.