FTSE 100 Rebounds with Weekly Gains Despite Energy Sector Decline

Real estate stocks and homebuilders also posted notable gains, with both sectors surging by more than 2% on Friday.

The FTSE 100 in the United Kingdom experienced a decline on Friday, primarily driven by lower oil prices that weighed on prominent energy-related stocks.

Despite this setback, both the FTSE 100 and the FTSE 250 managed to record weekly gains, fueled by growing optimism that the global monetary tightening cycle is drawing to a close, which bolstered investor appetite for riskier assets.

The FTSE 100, known for its substantial exposure to commodities, closed down by 0.4% on Friday. Nevertheless, it marked the end of a two-week losing streak with a noteworthy gain of 1.7% since the start of the week.

Meanwhile, the mid-cap FTSE 250 index surged by 1.2% on Friday, delivering its most robust weekly performance in nearly a year, with an impressive gain of 6.6%.

The oil and gas sector faced the steepest decline, plummeting by 3.4%.

This drop followed a more than 1% fall in oil prices, attributed to easing supply concerns arising from the Middle East conflict and lingering uncertainty surrounding China’s demand outlook as a top oil importer.

Conversely, precious metal mining stocks saw an upswing of nearly 4%, closely tracking the rise in gold prices driven by a weakening US dollar.

Interest rate-sensitive stocks continued to rise after the Bank of England’s decision to maintain interest rates at a 15-year peak of 5.25% on Thursday, coupled with an indication that rate cuts were not on the immediate horizon.

Real estate stocks and homebuilders also posted notable gains, with both sectors surging by more than 2% on Friday.

The British pound gained strength, appreciating by 1.4% against the US dollar and poised for its most substantial weekly increase in nearly a year.

Stuart Cole, Chief Macro Economist at Equiti Capital, noted, “Risk appetite has benefited from the unchanged interest rate decisions of the U.S. Federal Reserve, the European Central Bank, and the BoE,” adding that the market’s takeaway was that all three central banks had likely concluded their tightening cycles.

In individual stock movements, medical products manufacturer Smith+Nephew rose by 2% after receiving an upgrade from JPMorgan, shifting its rating from “neutral” to “overweight.”

Furthermore, shares of British electrical retailer Currys witnessed a 4% increase following its agreement to sell its Greek subsidiary, Kotsovolos, to Public Power Corporation.