FTSE rises, busy week ahead with several central bank decisions

Stock prices in London have seen a promising start on Monday morning, as investors braced themselves for upcoming meetings of central banks from Japan, the United States, and the United Kingdom. The market mood this morning is cautiously optimistic amid ongoing Middle East conflicts.

The FTSE 100 index has started the week on a strong note, opening with a 0.7% uptick, gaining 50.75 points to reach 7,342.03. Similarly, the FTSE 250 registered an increase of 0.8%, up by 139.01 points at 17,005.24, and the AIM All-Share index also showed an upward trajectory, adding 0.8% or 5.10 points, reaching 679.56.

The impending decisions of central banks take centre stage this week, starting with the Bank of Japan (BoJ) on Tuesday, the Federal Reserve on Wednesday, and the Bank of England (BoE) following suit on Thursday. Investors will be closely watching whether the BoJ is poised to shift away from its ultra-loose monetary policy, while the Fed and BoE are widely anticipated to maintain the status quo on interest rates, intensifying the focus on forward guidance.

In the FTSE 100, HSBC shares climbed 1.1%. The London-based lender reported a more than doubled quarterly profit, yet it fell short of market expectations. This came as the bank readied a $3 billion share buyback. HSBC’s third-quarter pretax profit rose to $7.71 billion from $3.23 billion in the previous year, attributed to a higher interest rate environment. Nevertheless, the figure fell shy of analyst estimates of $8.10 billion.

The bank’s net interest income jumped by 15% to $9.25 billion, while net fee income increased by 5.3% to $3.00 billion. Net operating income showed a robust 45% growth, reaching $15.09 billion, although it didn’t meet analyst estimates of $16.24 billion.

Pearson shares appreciated by 1.5% as the educational publisher raised its annual guidance. The third quarter saw a 2% year-on-year revenue increase on an underlying basis. Pearson now foresees group revenue growth to be at the higher end of its existing low-to-mid-single-digit guidance and an upgraded outlook for adjusted operating profit in the range of £570 million to £575 million, approximately £20 million higher than prior guidance. This progress was attributed to “strong operational momentum and financial performance” experienced during the third quarter.

In the retail sector, Frasers saw a 1.7% rise as it confirmed the divestment of Missguided’s intellectual property to Chinese fast fashion firm Shein. Frasers will retain Missguided’s real estate and employees, incorporating them into its fashion division. The deal is seen as a potential game-changer in the UK retail sector, promising exciting collaboration opportunities across Frasers’ brand portfolio.

Asos shares gained 2.5%, prompted by reports from the Telegraph suggesting negotiations to sell the Topshop brand to Authentic Brands Group, a US company renowned for brands such as Ted Baker, Reebok, and Forever 21. However, this potential deal presents both opportunities and challenges for Asos, as it has been a key growth driver since its acquisition.

Meanwhile, Ascential shares surged 35% as it unveiled a proposed sale of its Digital Commerce and WGSN units for cash proceeds of £1.2 billion. The first unit is set to be sold to Omnicom Group, and the second to a fund advised by Apax Partners. The company’s intention is to distribute around £850 million to shareholders after the completion of these transactions.