British Equities Surge on U.S. Inflation Signs and Chinese Stimulus

British stock indexes ended the week higher, buoyed by positive U.S. inflation data and aggressive stimulus measures from China. The FTSE 100 and FTSE 250 saw gains, particularly in the luxury and mining sectors. The U.S. personal consumption expenditures price index eased, increasing the odds of a Federal Reserve rate cut.

British equities wrapped up the week on a high, spurred by promising signs that U.S. inflation is easing. This development has strengthened the view that the Federal Reserve will continue its monetary loosening policies. Additionally, aggressive stimulus measures from China gave a significant lift to mining and luxury stocks.

The blue-chip FTSE 100 index rose by 0.4%, while the FTSE 250 midcap index surged over 1%. Both indexes had a positive weekly performance, fueled by hopes for economic recovery in China following numerous stimulus announcements. Despite this, the FTSE 100 lagged behind the European benchmark STOXX 600, which gained more than 2% over the week.

On Friday, China's central bank lowered interest rates and injected liquidity into the banking system, with more fiscal measures expected before the country's week-long holiday starting October 1. Personal goods stocks led the gains, up 5.4%, marking their best week since February 2017, driven by Burberry's 17% weekly gains.

In the U.S., the personal consumption expenditures (PCE) price index rose by 0.1% in August, down from an unrevised 0.2% in July. Over the year, the PCE price index stood at 2.2%, down from 2.5% in July. The odds of a 50 basis points rate cut at the Federal Reserve's November meeting increased slightly to 52.1%, according to the CME Group's FedWatch Tool.

Elsewhere, Cranswick surged 6.7% after forecasting its annual profit towards the upper end of market expectations. Rightmove shares climbed 0.5% following consideration of a sweetened $8.3 billion takeover bid from Rupert Murdoch-owned REA Group.

(With inputs from agencies.)