FTSE 100 to gain for second month on strong energy shares
However, the banking sub-index is still up 2.1% for the week and is set to gain 12.3% this month on support from higher yields amid a rising interest rate scenario. "Looking at the way the FTSE 100 and the big banking names have performed year-to-date, this drop is potential profit taking ahead of the weekend and the Bank of England meeting due next week where expectations are for a 25 bps rate hike," said Michael Hewson, an analyst at CMC Markets UK.
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London's FTSE 100 fell on Friday and was set to end the week marginally lower as banking shares weakened, though the index is on course to gain for the second month on support from strong monthly gains in energy stocks.
The blue-chip FTSE 100 fell 1% with financials HSBC Holdings, Barclays, and Prudential leading the decline. However, the banking sub-index is still up 2.1% for the week and is set to gain 12.3% this month on support from higher yields amid a rising interest rate scenario.
"Looking at the way the FTSE 100 and the big banking names have performed year-to-date, this drop is potential profit-taking ahead of the weekend and the Bank of England meeting due next week where expectations are for a 25 bps rate hike," said Michael Hewson, an analyst at CMC Markets UK. The FTSE 100 is set to end the week 0.1% higher, its fifth weekly gain in six as heavyweight energy shares tracked higher crude prices on supply worries.
Energy shares have gained 16.4% so far this month with Royal Dutch Shell and BP set for their highest monthly gains since November 2020, with Brent oil futures up for the sixth week. "As long as oil and gas prices remain at such levels, we are confident that the FTSE 100 will hit the 7,800 mark mid-year," Hewson added.
The domestically focussed mid-cap index fell 0.7%, down for the fourth straight week and on track for its worst month since March 2020. Meanwhile, data showed that the number of shuttered shops in Britain edged lower for the first time in four years in the final quarter of 2021, which pushed retail stocks 0.5% higher.
Among stocks, British outsourcer Capita dropped 1.4% after it said it would sell its IT services business Trustmarque to private equity firm One Equity Partners for 111 million pounds ($148.64 million).
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
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