The FTSE 100 finished slightly higher on Wednesday as investors welcomed softer-than-expected inflation data, although gains remained restrained ahead of key interest rate decisions in the United States.
London’s blue-chip index added 0.1% to close at 10,508.61, while the FTSE 250 rose 0.2% to 23,364.73. Across Europe, trading was mixed with Paris’s CAC 40 slipping 0.2% and Frankfurt’s DAX 40 edging up 0.1%.
The inflation figures encouraged hopes that the Bank of England will not need to tighten policy further in the near term, providing support for rate-sensitive sectors. Housebuilders were among the strongest performers, with Berkeley Group rising 1.9%, Barratt Redrow gaining 2.7% and Persimmon climbing 3.8%.
Mining stocks also found support as gold prices strengthened. Endeavour Mining jumped 5.0%, while precious metals producer Fresnillo added 1.4%.
Oil markets steadied after two sessions of sharp declines as traders paused ahead of planned US-Iran peace talks on Friday and the latest interest rate decision from the Federal Reserve. Brent crude traded at $80.11 a barrel, slightly above Tuesday’s London close of $79.95.
Barclays was another notable winner, advancing 3.4% after Bank of America lifted its price target on the lender to 600p from 570p and maintained its buy recommendation.
The broker said higher swap rates, strong lending growth in the UK, active capital markets activity, particularly in the United States, and resilient consumer trends should all benefit Barclays’ business mix. Bank of America also suggested stronger capital generation could create room for larger shareholder returns through buybacks.
Engineering group Weir rose 2.7% after securing what it described as a significant pumps order from Lloyds Metals and Energy in India. The contract relates to the second phase of a slurry pipeline project at the Surjagarh mine in Maharashtra. Weir had previously supplied equipment for the project’s first phase, which involved a 100-kilometre pipeline capable of transporting 10 million tonnes annually.
Among mid-cap stocks, Smiths News surged 9.8% after announcing a long-term distribution agreement with News UK, publisher of The Sun and The Times. The deal extends the partnership until July 2037 and expands Smiths News’ distribution footprint, making it the exclusive national distributor of News UK’s newspaper titles across Great Britain.
While London markets managed modest gains, sentiment on Wall Street deteriorated. The Nasdaq Composite and S&P 500 both fell more than 1%, while the Dow Jones Industrial Average dropped almost 500 points.
US equities came under pressure after updated Federal Reserve projections indicated that nine of the 18 policymakers who submitted forecasts expect at least one further interest rate increase before the end of the year. Traders subsequently moved to fully price in a quarter-point rate rise by year-end.
The shift reflects a stronger US labour market and inflation running at its highest level in three years, driven in part by higher energy costs linked to tensions in the Middle East.