London close: Late rally sends FTSE 100 to one-week high

(Sharecast News) - London's benchmark FTSE 100 rallied in afternoon trade on Thursday, hitting its highest close in a week, led by strong performances in industrial sectors.

After trading sideways for most of the day, blue chips stocks put in decent gains over the final two hours of trade, sending the Footsie up 0.5% to 9,703.16 - its highest close since 4 December.

The gains followed a strong performance on Wall Street on Wednesday after the Federal Reserve voted in favour of a rate cut of 25 basis points, as expected, sending borrowing costs to their lowest level since 2022.

However, according to Russ Mould, investment director at AJ Bell, the market reaction was only modest as investors "shrugged off the Fed's latest reduction [...] as it is becoming harder to guess where rates might go next".

Also limiting upside was an underwhelming second-quarter report from US tech giant Oracle, as a 14% increase in revenues was less than Wall Street analysts had pencilled in, while capital expenditure guidance was hiked by $15bn.

"The slightest bit of bad news around tech has the potential to cause jitters among investors, given they're already on the edge of their seats worrying about excessive AI spending. The last thing they want to hear is a big tech company not earning as much as forecast and spending more than expected," Mould said.

Back on this side of the Atlantic, investors were beginning to turn to the Bank of England's meeting next Thursday, with markets pricing in a 25bp cut, though policymakers are expected to be divided in the decision.

Industrial stocks bounce

Strong gains were registered in industrial sector, led by packaging firm Smurfit Westrock, metals and energy outfit Metlen, industrial equipment rental firm Ashtead and silver miner Fresnillo.

Retail and leisure names like JD Sports, IAG, Whitbread and InterContinental Hotels were also putting in a decent performance.

Ladbrokes owner Entain fell as it said its chief financial officer was set to step down after 13 years with the gambling and gaming group.

Primark owner AB Foods was also in the red as it traded without entitlement to the dividend, while Citi trimmed its target price for the stock and kept a 'sell' rating. In contrast, the US bank upgraded Sainsbury to 'buy', lifting the supermarket stock higher.

On the FTSE 250, Ceres Power tumbled 11% after Grizzly Research disclosed a short position in the stock and said in a report that the company was "fuelling investors' illusions with misleading promises". Meanwhile, RS Group rose after an upgrade from JP Morgan.

Market Movers

FTSE 100 (UKX) 9,703.16 0.49% FTSE 250 (MCX) 21,852.10 0.10% techMARK (TASX) 5,562.19 0.06%

FTSE 100 - Risers

Smurfit Westrock (DI) (SWR) 2,835.00p 5.16% Metlen Energy & Metals (MTLN) 43.05p 4.74% Ashtead Group (AHT) 5,010.00p 4.70% JD Sports Fashion (JD.) 81.62p 3.42% International Consolidated Airlines Group SA (CDI) (IAG) 397.60p 3.11% WPP (WPP) 327.80p 3.05% Fresnillo (FRES) 2,858.00p 3.03% Whitbread (WTB) 2,405.00p 3.00% InterContinental Hotels Group (IHG) 10,050.00p 2.76% Diageo (DGE) 1,645.50p 2.72%

FTSE 100 - Fallers

Informa (INF) 899.00p -3.29% Smith & Nephew (SN.) 1,214.50p -2.76% Entain (ENT) 743.20p -2.18% Associated British Foods (ABF) 2,097.00p -1.55% Centrica (CNA) 165.30p -1.31% Melrose Industries (MRO) 561.80p -0.92% Pershing Square Holdings Ltd NPV (PSH) 4,984.00p -0.91% BAE Systems (BA.) 1,691.00p -0.91% Next (NXT) 13,475.00p -0.77% Auto Trader Group (AUTO) 594.80p -0.73%

FTSE 250 - Risers

RS Group (RS1) 643.00p 6.19% Carnival (CCL) 1,885.00p 4.29% Hochschild Mining (HOC) 444.20p 4.03% W.A.G Payment Solutions (EWG) 97.80p 3.38% OSB Group (OSB) 589.00p 3.24% Endeavour Mining (EDV) 3,544.00p 3.20% SDCL Efficiency Income Trust (SEIT) 51.90p 3.18% Wizz Air Holdings (WIZZ) 1,112.00p 2.96% C&C Group (CDI) (CCR) 129.00p 2.71% Oakley Capital Investments Limited (DI) (OCI) 571.00p 2.70%

FTSE 250 - Fallers

Ceres Power Holdings (CWR) 275.80p -10.63% Ocado Group (OCDO) 220.20p -6.30% Ithaca Energy (ITH) 163.60p -3.76% Partners Group Private Equity Limited. (EUR) (PEY) 10.05p -3.37% Cranswick (CWK) 4,920.00p -3.34% Zigup (ZIG) 382.00p -3.29% AJ Bell (AJB) 466.80p -3.11% International Personal Finance (IPF) 208.00p -3.03% Diversified Energy Company (DI) (DEC) 1,135.00p -2.99% Sirius Real Estate Ltd. (SRE) 91.05p -2.93%