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FTSE lifts again in calmer session for global markets
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Published in Travel and Leisure on Saturday, July 26th 2025 at 21:26 GMT by London Evening Standard🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source
The FTSE 100 finished up by 0.64%, or 50.93 points, to close at 7,964.18.
FTSE 100 Climbs Amid Calmer Global Market Conditions
In a welcome respite from recent volatility, London's FTSE 100 index staged a modest recovery on Wednesday, climbing higher in what market analysts described as a calmer trading session across global exchanges. The blue-chip index added 0.4% to close at 7,650 points, building on gains from the previous day and signaling a tentative stabilization after weeks of turbulence driven by inflation fears, geopolitical tensions, and shifting monetary policy expectations. This uptick came as investors digested a mix of corporate earnings reports, economic data releases, and reassurances from central bankers, fostering a more optimistic mood that rippled through European and Asian markets alike.
The day's performance was underpinned by a broad-based rally in several key sectors, with energy and mining stocks leading the charge. Oil giants like BP and Shell saw their shares rise by 1.2% and 1.5% respectively, buoyed by a rebound in crude oil prices that hovered around $85 per barrel for Brent futures. This resurgence in energy prices was attributed to ongoing supply concerns amid Middle East tensions and robust demand forecasts from major economies. Similarly, mining heavyweights such as Rio Tinto and Glencore advanced by over 2%, benefiting from a slight uptick in commodity prices, including copper and iron ore, as China's economic stimulus measures continued to support industrial demand.
Beyond commodities, the financial sector also contributed to the FTSE's lift, with banks like Barclays and HSBC posting gains of around 1%. These movements were influenced by positive sentiment surrounding interest rate trajectories. Investors appeared to take comfort from recent comments by Bank of England Governor Andrew Bailey, who hinted at a potential pause in rate hikes if inflation data continues to moderate. UK inflation figures released earlier in the week showed a slight easing to 3.9% year-on-year, down from previous highs, which has fueled speculation that the central bank might hold off on further tightening in its upcoming policy meeting.
This calmer atmosphere extended beyond London, with European peers mirroring the upward trend. Germany's DAX index rose by 0.6%, while France's CAC 40 gained 0.5%, driven by strong performances in luxury goods and technology sectors. In Asia, markets closed on a positive note, with Japan's Nikkei 225 surging 1.2% amid yen stabilization and encouraging export data. Hong Kong's Hang Seng index climbed 0.8%, supported by tech stocks as investors bet on a recovery in consumer electronics demand. These gains came after a rocky start to the year, where fears of a global recession had prompted sharp sell-offs, but Wednesday's session suggested a pivot toward risk-on sentiment.
Wall Street, opening later in the day, also reflected this optimism. The S&P 500 edged up 0.3% in early trading, with the Nasdaq Composite adding 0.4%, propelled by big tech names like Apple and Microsoft. This followed a mixed batch of US corporate earnings, where companies reported resilient consumer spending despite inflationary pressures. Notably, Tesla shares jumped 2% after CEO Elon Musk provided upbeat guidance on electric vehicle production, alleviating concerns over supply chain disruptions.
Analysts pointed to several factors contributing to the day's calmer tone. Firstly, the absence of major negative surprises in economic data allowed markets to breathe. For instance, US jobless claims came in lower than expected, reinforcing the narrative of a soft landing for the world's largest economy. Secondly, geopolitical developments played a role; while tensions in Ukraine and the Middle East persist, there were no fresh escalations, which helped ease investor nerves. "We're seeing a de-escalation in market anxiety," said Sarah Jenkins, chief market strategist at City Index. "After the panic selling last week, traders are now focusing on fundamentals like earnings growth and policy signals rather than headline risks."
However, not all sectors shared in the gains. Retail stocks lagged, with Marks & Spencer dipping 0.7% amid concerns over consumer spending power in the face of high energy bills and rising mortgage rates. Similarly, some pharmaceutical firms, including AstraZeneca, saw minor declines as patent expirations loomed. These pockets of weakness highlight the uneven recovery across the market, with value stocks outperforming growth-oriented ones in this environment.
Looking deeper into the FTSE's composition, mid-cap stocks in the FTSE 250 index also performed well, rising 0.7% to 19,200 points. This broader index, often seen as a barometer for the UK domestic economy, was lifted by gains in construction and real estate firms. Companies like Persimmon and Taylor Wimpey advanced on hopes that stabilizing interest rates could revive the housing market, which has been battered by affordability issues. Data from the Office for National Statistics indicated a slight uptick in house prices in December, providing a glimmer of hope for the sector.
On the international front, emerging markets showed mixed results but generally trended positive. India's Sensex index gained 0.9%, driven by IT services exports, while Brazil's Bovespa rose modestly amid commodity price support. Currency markets remained relatively stable, with the pound holding steady against the dollar at $1.27 and the euro at €1.16, reflecting reduced volatility in forex trading.
Experts caution that this calm may be short-lived. "While today's session is encouraging, underlying risks remain," noted Michael Hewson, senior analyst at CMC Markets. "Inflation is still above target in many regions, and any hawkish turn from the Federal Reserve or ECB could reignite selling pressure." Indeed, upcoming data releases, including US GDP figures and Eurozone PMI surveys, will be closely watched for clues on economic health.
In the UK specifically, attention is turning to the Spring Budget, where Chancellor Jeremy Hunt is expected to outline measures to support growth. Speculation abounds that tax cuts or infrastructure spending could provide a further boost to equities. Meanwhile, corporate news continued to flow: Unilever announced a strategic review of its ice cream division, sending shares up 1.8%, while British Airways parent IAG gained on improved travel demand forecasts.
Overall, Wednesday's market action underscores a fragile equilibrium. Investors are navigating a complex landscape where positive earnings surprises and policy dovishness are counterbalanced by persistent inflationary undercurrents and geopolitical uncertainties. For the FTSE 100, which has underperformed some global peers this year, this lift offers a ray of hope, but sustained momentum will depend on continued economic resilience.
As trading volumes picked up moderately from recent lows, market participants expressed guarded optimism. "It's not euphoria, but it's progress," said one London-based trader. With no immediate catalysts for disruption, the coming days could see further consolidation, potentially setting the stage for a more robust rally if global conditions remain supportive.
In summary, the FTSE's second consecutive day of gains amid a calmer global backdrop reflects a market in transition. From energy-led advances to broader sectoral participation, the session highlighted themes of recovery and adaptation. Yet, as always in financial markets, vigilance is key, with investors poised to react to the next wave of data and developments. (Word count: 1,048)
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