FTSE set for another day of gains

Renewed optimism over potential monetary easing bolsters markets ahead of the weekend.

Investors are donning their risk-on hats as hopes of interest rate cuts gain traction, propelling London stocks to record highs. This comes a day after the Bank of England (BoE) opened the door to rate reductions.

The UK’s first-quarter GDP figures revealed that the country rebounded from a short-lived recession, with gross domestic product (GDP) growing by a better-than-expected 0.6% between January and March, surpassing economists’ forecasts of 0.4% growth.

The FTSE 100 has rallied more than 8% so far this year, more than double its 3.8% gain in 2023. The blue-chip index is aiming for a sixth consecutive session of gains, a streak not seen since August.

On Thursday, the BoE paved the way for potential rate cuts as early as next month, with Governor Andrew Bailey indicating that reductions could exceed market expectations. Money market traders currently see around a 45% chance of a rate cut at the next policy meeting, with approximately 58 basis points of easing priced in by year-end.

In corporate news, British Airways owner IAG reported a first-quarter revenue increase to €6.43 billion from €5.89 billion a year earlier. Operating profit multiplied to €68 million from €9 million, while the pretax loss narrowed to €87 million from €121 million. CEO Luis Gallego expressed confidence in the company’s positioning for the summer, citing high demand for travel as a continuing trend.

TBC Bank, based in Tbilisi, Georgia, announced a share buyback programme of up to £22.4 million, following a rise in first-quarter pretax profit to £102.3 million. CEO Vakhtang Butskhrikidze expressed optimism about the group’s prospects for delivering excellent results in 2024, driven by strong economic growth in Georgia and Uzbekistan.

Digital advertising firm S4 Capital reported a 15% or 12% like-for-like decline in first-quarter net revenue to £186.4 million, impacted by client caution and reduced technology services activity. Executive Chair Martin Sorrell maintained the company’s full-year targets, anticipating improved market conditions and capitalising on its prominent artificial intelligence positioning.

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