MARKET REPORT: Feelgood FTSE is buoyed by hopes of an interest rate cut early next year

The London stock market rose on its return to trading after Christmas – buoyed by optimism over potential interest rate cuts early next year.

On a positive day for investors, the FTSE 100 rose 0.4 per cent, or 27.44 points, to 7724.95 and the FTSE 250 was up 0.5 per cent, or 89.80 points, to 19,720.75.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: ‘The brakes aren’t yet being applied to the Santa rally, as investors eye up interest rate cuts as early as March in the US.

‘However, the full effect of painful borrowing costs has yet to be felt, and given the other challenges facing nations next year, from climate change and debt management, pessimism still risks creeping back in.’

On Wall Street, the Dow Jones Industrial Average rose 0.1 per cent, while the S&P 500 slid slightly, and the Nasdaq was up 0.05 per cent.

Rally: On a positive day for investors, the FTSE 100 rose 0.4%, or 27.44 points, to 7724.95 and the FTSE 250 was up 0.5%, or 89.80 points, to 19,720.75

Oil was down a touch as Brent crude fell 1 per cent to below $80 a barrel. But prices are likely to remain elevated due to Israel’s military campaign in Gaza and falling inflation in the US, say analysts.

And bitcoin – the world’s largest cryptocurrency – was closing in on a strong finish to the year.

Prices have jumped more than 160 per cent in 2023, with its recent rally driven by hopes over the launch of a spot bitcoin exchange-traded fund.

Back in London, AstraZeneca marched ahead a day after it landed a deal to buy Shanghai pharmaceutical company Gracell Biotechnologies for up to £950million, its latest move towards expanding its presence in China. Shares rose 0.9 per cent, or 92p, to 10,528p.

There were also gains for Intertek after the quality assurance firm’s rating was upgraded by BNP Paribas Exane from ‘underperform’ to ‘outperform’. Shares added 1.7 per cent, or 69py, to 4257p.

Aviva rose 0.4 per cent, or 1.7p, to 432.8p after it said it expected to make an extra £80m from selling its stake in a Singapore-based business that was formed in 2020.

Stock Watch – WH Ireland

WH Ireland clawed back losses as the City stockbroker highlighted a turnaround in fortunes. Half-year results showed revenue fell a quarter to £10.7million, while its losses widened from £400,000 to £3.9million.

But it said that while market conditions were ‘still challenging’, they had shown ‘tentative signs of improvement in both indices and activity levels since November 2023 as the prospect of interest rates having peaked becomes more plausible’. 

Shares rose 7.1 per cent, or 0.25p, to 3.75p.

It now expects to receive £930million from its sale of the 25.9 per cent stake in Singlife to Japan’s Sumitomo Life, an increase on an earlier estimate after the deal was agreed in September.

London-listed insurer Aviva plans to use the additional proceeds to reinvest in the business, fund deals and hand cash back to shareholders.

Elsewhere, Capricorn Energy said it could be in line for £19.5million or £39million in contingent payments following the 2020 sale of a Senegal oil development to Australia’s Woodside.

The payments depend on the average price of oil exceeding $55 a barrel or $60 during the first six months of production and on regular production getting started.Capricorn shares gained 4.2 per cent, or 6.8p, to 168p.

The boss of a US energy firm has resigned less than two weeks after talks ended between his company and an oil major over forming a joint venture.

John Cowan, who has led Canadian Overseas Petroleum Limited (COPL) since the summer, quit his job but will remain on the board while a replacement for him is found.

It comes after talks this month ended between COPL and an ‘established energy company’ to create a joint venture to develop and exploit oil reserves and resources at Cole Creek in Wyoming, in the US. Shares rose 5.9 per cent, or 0.02p, to 0.34p.

HG, the manager of HG Capital Trust (HGT), has agreed to a partial sale of the software group Iris to the Los Angeles-based private equity firm LGP.

The deal values HGT’s investment in Iris at nearly £100million.

Shares in HGT increased 1.4 per cent, or 6p, to 433p.

This post first appeared on Dailymail.co.uk