The FTSE 100 index surprised investors on Wednesday by opening above expectations as a result of market optimism due to the pending outcome of the US Federal Reserve's interest rate announcement. The FTSE 100 index opened 19 points above Tuesday's close of 9660.95.
Fresnillo's stock price rose 2.68% to £2836 per share. Endeavour Mining's stock increased by 2.03% to £3526 per share. Berkeley Group reported an increase of 2.29% to £3662 as they have reaffirmed their forecast for the full year.
WPP, the advertising giant, added 1.39% or £322 per share. HSBC Holdings recorded a 1.93% increase in share price to £1088.60. Tesco's stock experienced a rise of almost 1% indicating that retail was the strongest performing sector in today's market.
On the downside, Games Workshop's shares experienced a 0.61% decline to £19530. Coca-Cola Europacific Partners dropped 0.88% to £6780. Ashtead Group saw a fall in their stock price of 0.81% at £4758 per share, indicating that there was selective profit-taking by investors from both the consumer and industrial sectors.
The European travel giant TUI reported its strongest annual earnings, backed by continuous customer demand and stronger summer 2026 bookings made in advance.
The company declared underlying earnings amounting to €1.46 billion, an increase of 12.6% year-on-year; however, it anticipates a more moderate revenue increase of 2-4% for the next financial year.
Meanwhile, FirstGroup received a significant boost after being selected as the preferred operator for the London Overground network.
The contract, valued at approximately £3 billion, spans eight years and includes planned service improvements on the Mildmay and Windrush lines.
Following the announcement, FirstGroup shares rose 4% to £181.8, reflecting heightened investor confidence.
One of the main reasons influencing the current trend is the expected interest rate cut by the US Federal Reserve. The markets are estimating a 90% chance of the Federal Reserve reducing the interest rate to 3.5%-3.75%, which would be the third cut in a row, starting from September.
Analysts anticipate differing views among the Fed officials, with investors closely watching the release of the updated “dot plot” for insight into future rate movements through 2026 and 2027.
Internationally, US Treasury yields remain elevated, reflecting market scepticism about sustained monetary easing.
The Dow Jones slipped 0.4%, weighed down by a 4% drop for JPMorgan after a warning that costs could rise next year amid credit card competition and increased AI spending. The S&P 500 was relatively flat, down just 0.1%, while the Nasdaq nudged 0.1% higher.
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