𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Stocks in London prospered on Monday as oil prices fell amid hopes for progress on peace talks between the US and Iran, and technology stocks rallied after recent falls.

The FTSE 100 Index closed up 31.55 points, 0.3%, at 10,761.33.

The FTSE 250 ended 342.49 points higher, 1.4%, at 24,795.85, and the AIM all-share added 4.84 points, 0.6%, at 757.92.

In Europe, the CAC 40 in Paris ended up 1.0%, while Frankfurt’s DAX 40 advanced 0.6%.

Around the time of the London equities close on Monday, stocks in New York were higher.

The Dow Jones Industrial Average was up 1.0%, the S&P 500 was 0.6% higher and the Nasdaq Composite rose 0.7%.

New York’s tech rally came after heavy falls last week as investors started to fret about whether the massive investment in AI infrastructure will ever deliver an acceptable return.

“Investors are no longer in doubt that growth is coming, but they are starting to question whether they have paid too much for it,” said Tom Stevenson, investment director at Fidelity International.

“The AI investment boom is bumping up against a rising cost of capital. As even the massive cashflows of the US hyperscalers are drained, the industry is becoming increasingly reliant on the kindness of the equity, and more important, the bond market. With yields at or above 5% the case is harder to make,” he added.

Supporting the under-fire technology sector, Anthropic, one of the world’s leading artificial intelligence companies, reported a more than 1,100% surge in quarterly revenue as it counts down to going public on Wall Street later this month.

Revenue reached 17 billion dollars in the third quarter, up from 1.4 billion dollars a year earlier, Anthropic said.

This week sees results from iPhone maker Apple after the market close on Monday and chip maker Advanced Micro Devices on Tuesday.

In addition, US midterm elections and Friday’s nonfarm payrolls report will provide direction.

Goldman Sachs notes public opinion polling suggests national sentiment has swung by around 10 to 11 percentage points towards the Democrats, while prediction markets imply high odds Democrats will win the House majority with a wider margin of control (around 236 seats) than either party has had in several years.

Goldman says the Senate majority is more uncertain, with prediction markets currently favouring Democrats, but polls in the decisive races are within the margin of error.

Diego Barnuevo, analyst at Ebury, thinks that a Democratic sweep would be neutral to mildly positive for the fiscal outlook.

“Congress could restrain (US President Donald) Trump’s expansionary agenda and, with it, the deficit. Negotiations would be confined to must-pass items, such as the budget and the debt ceiling, with the latter expected to be hit at some point in 2027,” he commented.

Ahead of the elections, two reports showed the US manufacturing sector remains in rude health.

According to S&P Global, the US manufacturing sector continued to expand markedly in October, albeit to a slightly softer degree than the previous month.

The seasonally adjusted S&P Global US manufacturing purchasing managers’ index recorded 54.9 in October, comfortably above the 50.0 no-change mark, but slowed from September’s 52-month high of 55.9.

The reading was below FXStreet consensus which forecast a rise to 56.0.

A separate report from the Institute for Supply Management (ISM) showed the US manufacturing sector expanded in October for the 10th consecutive month and accelerated from September.

The ISM’s manufacturing PMI registered 55.5, up from 54.5 in September, and better than the 54.6 FXStreet consensus.

Vikram Rai, senior economist at TD Economics, said October’s ISM report offers encouraging signs that manufacturing demand is holding up, while the decline in the prices index is “welcome” and suggests some easing in input-cost pressures after September’s sharp increase.

The pound was quoted at 1.3417 dollars late on Monday afternoon, higher than 1.3396 dollars at the London equities close on Friday.

Against the euro, sterling eased to 1.1980 euros from 1.1996 euros on Friday.

The euro was higher at 1.1200 dollars from 1.1163 dollars late on Friday.

Against the yen, the dollar rose to 157.82 yen from 157.50 yen.

The yield on the US 10-year Treasury was quoted at 4.89% late on Monday afternoon, narrowing from 4.94% on Friday.

The yield on the US 30-year Treasury was at 5.25%, narrowing from 5.31%.

In the UK, the seasonally adjusted manufacturing PMI rose to a five-month high of 52.8 points in October, in line with the flash estimate and up from 51.9 in September.

“UK manufacturing showed resilience in the lead-up to the autumn budget,” commented S&P Global Market Intelligence director Rob Dobson.

The report comes ahead of Thursday’s interest rate decision from the Bank of England (BoE) at which the central bank is widely expected to raise interest rates by 25 basis points to 4.00%.

Analysts at Bank of America expect the BoE to deliver the rate hike but “gently push back against the priced pace and number of future increases”.

But it expects “sparklers” rather than “fireworks” at Thursday’s decision on November 5.

“A 25bp hike is the Catherine wheel that has been pinned to the post for a long time, but we see this is a ‘safety first’ event – resilient real data and the threat from energy price pass through justifies action,” BofA added.

Brent oil fell sharply amid signals that Iran and the US are ready to resume talks to end the Middle East war.

Axios news outlet reported that US vice president JD Vance had sent a letter to Iranian national security chief Mohsen Rezaei about possible new talks.

Iran meanwhile said it was ready to reopen the Strait of Hormuz within two days should the US agree to ending the war on all fronts, among other conditions related to the conflict.

Later, President Masoud Pezeshkian said the country’s supreme leader Mojtaba Khamenei had granted “powers” to the government in its talks with the US seeking to end the Middle East war.

Brent oil was trading at 105.09 dollars a barrel on Monday, lower than 117.61 dollars late on Friday.

In London, the lower oil price dragged Ithaca Energy, BP and Shell down 5.9%, 4.4% and 2.9% respectively.

BP on Monday said it had completed the six billion dollar sale of a 65% stake in its lubricants brand Castrol to private equity firm Stonepeak Partners.

Castrol will now operate as a standalone company with its own management, governance and strategic priorities, and BP will retain a 35% stake.

BP is subject to a two-year lock-up period on completion but then has the option to sell the remaining stake.

While oil stocks faltered, airlines prospered on hopes for lower fuel costs.

British Airways owner International Consolidated Airlines Group rose 3.8% and budget airline Wizz Air added 5.2%.

Lower bond yields boosted rate sensitive housebuilders, with Barratt Redrow up 3.5%, Vistry up 8.9%, and kitchen supplier Howden Joinery up 3.9%.

Elsewhere, Ibstock slid 10% after warning it expects second-half performance to be materially below its previous expectations after weak trading in September and October.

Chief executive Joe Hudson said: “Trading conditions deteriorated sharply during the third quarter, with weakness continuing into October.

“We have responded by reducing production to manage inventory, taking further cost action and maintaining tight control of cash.

“These production decisions create an additional near-term earnings headwind but are necessary to align output with demand.”

Gold was quoted at 3,968.02 dollars an ounce Monday, higher than 3,898.22 dollars on Friday.

The biggest risers on the FTSE 100 were JD Sports Fashion up 4.38p at 96.32p, Fresnillo up 102p at 2,337p, St James’s Place up 47p at 1,087p, Weir Group up 108p at 2,664p and Kingfisher up 14.8p at 366.6p.

The biggest fallers on the FTSE 100 were Ithaca Energy down 18p at 284.8p, BP down 27.4p at 600p, Shell down 115.5p at 3,921p, Vodafone down 2.25p at 116.85p and Centrica down 2.8p at 149.9p.

Tuesday’s global economic events calendar has an Australian interest rate decision overnight and US factory orders figures.

Tuesday’s local corporate calendar has full-year results from Primark owner Associated British Foods and insurer Hiscox.

Contributed by Alliance News