FTSE 100 Rises on Earnings and Rate Cut Hopes, DAX Sees Mild Recovery

On Thursday, London’s blue-chip stock index moved higher, boosted by strong corporate profits and economic data that backed expectations on further rate cuts from the Bank of England.

The benchmark FTSE 100 (FTSE) closed 0.13% higher, while the locally focused FTSE 250 (FTMC) fell 0.2%. The FTSE 100 has tried to rally for weeks with little success. Just as the US election hangs over Wall Street, UK investors have decided to sit it out till Rachel Reeves finishes speaking next week.

Unilever (ULVR.L) climbed 2.9% after topping third-quarter underlying sales projections, while Barclays (BARC.L) surged 4.1% after reporting an 18% increase in third-quarter earnings that exceeded expectations.

Anglo American (AAL.L) rose 2.9%, lifting the industrial metal miners’ sector (.FTNMX551020), as the global miner retained its copper and diamond production projections.

Optimism among British firms fell in October, according to two surveys released on Thursday, just six days before finance minister Rachel Reeves attempts to strike a balance between raising taxes and stimulating growth in the new government’s first budget.

Traders are widely anticipating a 25 basis point rate drop by the BoE at its November and December sessions.

Catherine Mann, the BoE’s interest rate-setter, welcomed a recent drop in inflation but said that the central bank still had “a long way to go” to meet its 2% inflation objective in the medium run.

FTSE 100 Futures Dip as Autumn Budget Uncertainty Looms

On Friday morning, futures showed the FTSE 100 giving up virtually all of its gains from Thursday, falling 8 points to 8,303.

However, uncertainty surrounding next week’s Autumn Budget was believed to be holding down gains, with chancellor Rachel Reeves confirming intentions to raise taxes and change UK debt regulations to free up funds for additional borrowing.

On Friday, the focus was expected to be on NatWest Group PLC’s (LSE:NWG) latest trading update, as well as GfK consumer confidence numbers.

DAX Rebounds 0.34% as Auto Sector Shines, but Weekly Outlook Remains Bearish

On Thursday, October 24, the DAX rose 0.34%, recovering from a 0.23% drop in the previous session, to close at 19,443. The DAX snapped a three-day losing run.
On Thursday, the car sector grabbed center stage. Renault reported Q3 earnings that surpassed expectations, fuelling demand for German auto stocks.

The top performers on the DAX for the session included Dr. Ing. hc F Porsche AG Preferred (ETR:P911_p), which saw a rise of 3.07%, or 2.06 points, closing at 69.16. Beiersdorf AG O.N. (ETR:BEIG) followed closely, gaining 2.79% or 3.55 points to finish at 130.60. Rheinmetall AG (ETR:RHMG) also had a strong showing, up 2.30% or 11.30 points, closing at 503.40.

Conversely, the worst performers included Symrise AG Inh. O.N. (ETR:SY1G), which dropped 2.99% or 3.45 points, ending the session at 112.10. Deutsche Bank AG NA O.N . (ETR:DBKGn)saw a decline of 2.40% or 0.39 points, closing at 15.79, while Merck KGaA (ETR:MRCG) fell 2.02% or 3.20 points to finish at 155.50.

The DAX is set to have a bad week on Friday. Broker IG computed the leading German index two hours before the Xetra opened 0.4 percent down at 19,365 points. This would bring its weekly loss to approximately 1.5 percent.

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Arslan Butt
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Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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