FTSE indexes eye sharp weekly gains on peak-rate optimism

Futures markets show traders expect interest rates to fall by around 80 basis points by the end of 2024 from 5.25% currently, compared with a decline of just over 50 bps a week ago. Shares of the London Stock Exchange Group reversed course to edge up 0.4% after the stock exchange operator raised its mid-term growth guidance and said it would return a billion pounds ($1.24 billion) to shareholders in 2024.

UK's main stock indexes rallied over 1% on Friday and were on track for steep weekly gains after a slew of economic data spurred expectations among investors that interest rates have peaked.

The blue-chip FTSE 100 rose 1.1%, while the midcap FTSE 250 index added 1.3%. Despite Thursday's selloff, the indexes looked set to end the week sharply higher as cooling inflation and signs of softening economic growth spurred bets of interest rates cuts by the Bank of England.

British retail sales volumes fell unexpectedly in October as stretched consumers stayed at home, official data showed on Friday in a new warning sign for the economy. "This is a super-tough environment for retailers given that this risk-averse sentiment to big spending is coming at such a crucial time in the calendar, which should be the cash-cow quarter for retailers," said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

The data painted a gloomy picture of UK consumers, but also meant that traders were pricing in the possibility of interest rate cuts. Futures markets show traders expect interest rates to fall by around 80 basis points by the end of 2024 from 5.25% currently, compared with a decline of just over 50 bps a week ago.

Shares of the London Stock Exchange Group reversed course to edge up 0.4% after the stock exchange operator raised its mid-term growth guidance and said it would return a billion pounds ($1.24 billion) to shareholders in 2024. AstraZeneca rose 1.2% after the U.S. health regulator approved its Truqap in combination with an older drug, providing another treatment option for patients with the most common type of breast cancer.

FirstGroup climbed 3.1% to touch over a 10-year high after the transport operator said it will form a joint venture with Japan's Hitachi for leasing up to 1,000 electric bus batteries for about 100 million pounds ($123.9 million).

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)