FTSE 100 Rises on Fed Rate Cut Hopes Amid Global Market Optimism

The FTSE 100 saw an uptick, closing higher as global markets rose on U.S. Federal Reserve rate cut expectations. The midcap FTSE 250 remained steady. While U.S. optimism prevailed, UK labor data showed weak job growth, complicating the Bank of England's policy decisions. Upcoming economic data and geopolitical talks add to market dynamics.

Britain's FTSE 100 climbed to a one-week high on Wednesday, bolstered by the global anticipation of a U.S. Federal Reserve interest rate cut, which increased demand for riskier assets worldwide. This marked the third straight day of gains for the blue-chip index, despite the FTSE 250 barely moving.

European stock markets outperformed the FTSE 100, as energy and financial stocks slipped in London's market. Investor optimism surged after the latest U.S. inflation data met expectations, reinforcing confidence in an upcoming rate cut by the Fed and driving Wall Street to unprecedented highs, further boosting British stocks.

In sharp contrast to the positivity across the Atlantic, UK's labor figures depicted sluggish hiring alongside persistent wage growth, presenting a challenge for the Bank of England in their fight between economic slowdown and inflation. Markets expect a delayed rate cut from the BoE in November. As attention shifts to Thursday's GDP data, expected to show minimal economic growth, and high-stakes discussions between U.S. and Russian leaders, market volatility ensues.

(With inputs from agencies.)