The FTSE 100 in the UK enjoyed a resurgence, reaching a seven-week high on Friday.
This upturn was primarily attributed to a rebound in crude oil prices, which bolstered the shares of oil giants.
Nonetheless, the mining conglomerate, Anglo American, faced a significant setback as it announced plans to curtail capital expenditure amidst lackluster demand.
Anglo American’s London-listed stock (AAL.L) plummeted by 19%, hitting a three-year nadir, making it the biggest decliner among FTSE 100 stocks.
Anglo American unveiled its strategy to slash capital expenditure by $1.8 billion by 2026. Additionally, the company disclosed its intention to reduce production at its South African subsidiary, Kumba Iron Ore (KIOJ.J).
This move was necessitated by the surge in iron ore stockpiles due to deteriorating rail bottlenecks.
Nevertheless, the FTSE 100 index (.FTSE) managed to conclude the day with a 0.5% gain, marking its second consecutive week of positive performance.
The upswing was propelled by a 1.6% surge in heavyweight energy stocks (.FTNMX601010), triggered by Saudi Arabia and Russia advocating for more OPEC+ members to participate in output cuts, consequently driving up crude oil prices.
Attention is now shifting to an array of central bank meetings scheduled for the upcoming week. Investors are eagerly anticipating pivotal decisions from the Federal Reserve, the Bank of England (BoE), and the European Central Bank (ECB).
Michael Hewson, Chief Market Analyst at CMC Markets, observed a shift in rate policy messaging, with a “higher-for-longer” approach gaining favor, particularly given the relatively high headline inflation and wages in the UK.
Hewson added that interest rate reductions by the BoE are likely to occur after the ECB initiates its rate cuts, primarily due to the elevated inflation levels in the UK.
Nonetheless, the optimism stemming from the belief that major central banks have concluded their rate hikes propelled the pan-European STOXX 600 index (.STOXX) to its highest closing point since February 2022, and the S&P 500 in New York (.SPX) neared its highest level for 2023.
Furthermore, the domestically-focused FTSE 250 midcap index (.FTMC) exhibited a 0.5% gain, reaching a near three-month closing high.
Cigarette and cigar producer Imperial Brands (IMB.L) experienced a nearly 2% downturn following a downgrade by RBC.
Conversely, Sainsbury (SBRY.L) saw a 1.6% upswing after Goldman Sachs upgraded the supermarket group’s rating from “neutral” to “buy.”