Miners and defence stocks are once again leading the FTSE 100, as it reaches another record high.
The blue-chip index passed 10,600 points, another significant milestone, as chances of a Bank of England interest rate cut next month increased.
The FTSE 100 was trading up over 100 points this morning, or 1.1 per cent, at 10,627 points, bringing its year-to-date gains to over 7 per cent.
A rate cut would be good news for the FTSE 100, especially given the likely knock-on effect on the pound, said AJ Bell’s Russ Mould.
He said: ‘Lower rates typically translate into weaker sterling, which, in turn, flatters the overseas earnings which dominate the index.’
Money markets are pricing in an 85 per cent chance of a cut following the lower inflation reading of 3 per cent and weaker jobs and wages data.
Defence stocks like BAE Systems have been on the tear this week as the PM doubled down on spending
Antofagasta led London’s biggest risers, gaining 4.6 per cent, after losing some ground after its results on Tuesday.
Despite a modest drop in production, core profits jumped 52 per cent amid heightened demand for copper, helping to lift shares this morni0ng.
Elsewhere, Glencore shares were up 2.8 per cent following its first update to investors since it abandoned talks with Rio Tinto to create a mining giant.
Despite taking a hit to profits following a slump in coal prices, Glencore reiterated its commitment to become the world’s biggest copper producer within the next decade.
Defence stocks extended their gains as BAE Systems reported record sales, off the back of higher government spending, lifting Babcock with it.
Shares in BAE rose 3.7 per cent, bringing their year-to-date gains to 20 per cent, while Babcock shares increased nearly 2 per cent.
Defence stocks have been on the tear this week after Keir Starmer said Britain must ‘go faster’ in increasing military spending.
Britain has already committed to increasing defence spending to 2.5 per cent of gross domestic product by next year, with an ambition to raise this to 3 per cent in the next Parliament.
Oil prices pushed higher as investors grappled with the ongoing Russia-Ukraine and US-Iran talks.
All eyes will turn to the US this afternoon, following the latest meeting of the Federal Reserve, as investors weigh the trajectory of rates.
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