The FTSE 100 rose on Monday, ahead of a raft of key economic data and an expected interest rate cut by the Bank of England later this week.
The FTSE 100 index closed up 102.28 points, or 1.1%, at 9,751.31. The FTSE 250 finished 172.61 points higher, or 0.8%, at 22,049.16, but the AIM All-Share ended down 2.13 points, or 0.3%, at 749.23.
In Europe, the Cac 40 in Paris closed up 0.7%, while the Dax 40 in Frankfurt closed up 0.2%.
This week's calendar includes decisions from central banks in the UK, Europe and Japan, plus inflation and retail sales figures in the US and UK.
Additionally, US nonfarm payrolls data for October and November will be released on Tuesday.
Joshua Mahony of Scope Markets said: “Despite an incredibly busy week ahead, traders are taking a largely positive tone as the Federal Reserve's rate cut means the jobs report and inflation data will have little immediate impact on monetary policy.
“Meanwhile, elevated levels of market confidence around the Bank of England's rate cut and the Bank of Japan's hike alleviate much of the risk that we will see significant unexpected hurdles for traders to overcome.”
The pound was trading higher at $1.3390 at the close of the London Stock Exchange on Monday, up from $1.3356 on Friday.
Looking ahead to the Bank of England rate decision, Fidelity International's Tom Stevenson said: “The consensus is that rates will fall by a quarter of a percentage point on Thursday to 3.75%, with swap markets pricing in a 90% chance of a cut.
“It would be the sixth rate cut since the Bank began cutting them in the summer of 2024.
“But the decision remains difficult and Bank Governor Andrew Bailey may be forced to use his casting vote this week.”
He added: “Interest rates are believed to be approaching the so-called 'neutral rate' where they neither stimulate nor constrain the economy and that has caused a more or less even split on the monetary policy committee between members who think rates should fall further to boost growth and those who think caution should be the watchword until it is clear that inflation is under control.”
New York stocks were little changed at the close of London stocks on Monday.
The Dow Jones Industrial Average fell 0.1%, as did the Nasdaq Composite, while the S&P 500 index rose 0.1%.
The 10-year US Treasury yield was trading at 4.17%, down from 4.19% on Friday. The 30-year US Treasury yield was at 4.83%, down from 4.86%.
Morgan Stanley said this week's U.S. jobs data could be more important for stocks' sentiment on future interest rate policy than last week's FOMC meeting.
“With the correlation between stock returns and interest rates falling deeper into negative territory last week, we are now firmly back in a good-is-bad/bad-is-good regime. This implies that moderate labor market weakness is likely to be viewed in a bullish context by equity markets,” the bank commented.
Meanwhile, New York Federal Reserve President John Williams said the U.S. economy appears to be “turning the corner” after a year dominated by uncertainty, with strong growth expected in 2026.
“What is striking is that, despite all the uncertainty, the US economy has shown considerable resilience and appears poised to gain momentum next year,” Williams added.
On the FTSE 100, gains were led by the financial sector: Prudential rose 3.2%, Hiscox rose 3.0%, Barclays rose 2.2% and NatWest rose 3.0%.
Haleon gained 2.9% when Morgan Stanley named it a “top pick” in the home and personal care sector.
Haleon, which lagged in 2025, looks set to accelerate organic sales growth in 2026 as it gets ahead of inventory reduction in the United States, in the broker's view.
Marks & Spencer, up 2.0%, was named Jefferies' favorite retailer in the UK.
The broker is cautious on overall consumer sentiment, with M&S being its only 'buy' rating on the retail sector.
Reflecting this caution, Jefferies downgraded Tesco, Next and Associated British Foods.
BAE Systems lagged behind, down 0.4% amid hopes of progress in Ukraine.
Over the weekend, Ukrainian President Volodymyr Zelensky admitted that the country would be willing to give up its long-term goal of NATO membership if the United States and Europe offered security guarantees to prevent future Russian aggression.
On Monday, Zelensky said two-day talks in Berlin with U.S. envoys on ending the war with Russia were “not easy” but “productive.”
Shares of Ukraine-focused Ferrexpo rose 6.2%.
Elsewhere, TT Electronics fell 20%, after DBAY Advisors said it plans to vote against a proposed £287m takeover of TT and ruled out making a bid itself.
DBAY Advisors, the Isle of Man-based asset management company, is TT's largest shareholder, with a stake of just under 25%.
Last Tuesday, DBAY said it was considering making a bid for TT, which makes electronic components.
However, on Monday DBAY ruled out such a move and confirmed that it will instead vote against the agreed acquisition by Switzerland's Cicor Technologies, an offer it considers “unattractive.”
Additionally, late Monday, TT said it continues to believe Cicor's cash offer “fairly values” the company. However, he believes that the stock alternative currently “undervalues TT and its future prospects.”
Therefore, TT now considers only the terms of the cash offer “fair and reasonable.” Last month, Cicor amended its offer for TT to 150 pence per share, all in cash. TT shareholders can also choose to receive 0.0084 Cicor shares.
On the FTSE 250, Frasers jumped 7.9% after launching a share buyback of up to £70m.
The owner of retail chains Sports Direct, Flannels and Frasers said the buyback will be completed by April 24 next year.
Bank of America called it an “early holiday gift” to shareholders, which should deliver a 2% gain in earnings, and “well received.”
“As such, in itself the impact is modest, but it is an important signal for the market following the allocation of £2.4 billion in capital expenditure and the creation of stakes in listed investments and investment properties during 2025 and 2026,” the broker added.
Brent oil was trading at $60.39 a barrel at the close of the London Stock Exchange on Monday, compared to $61.30 on Friday.
The biggest risers on the FTSE 100 were Airtel Africa, up 12.20p to 319.20p, Antofagasta, up 108.00p to 3,040.00p, Prudential, up 34.00p to 1,106.50p, Auto Trader, up 19.00p to 621.00p, and Hiscox, which rose 40.00p to 1,389.00p.
The biggest fallers on the FTSE 100 were Fresnillo, down 48.00 pence to 2,856.00 pence. BP, down 1.80 pence at 437.45 pence.
Tuesday's economic calendar includes UK employment and average earnings data, US non-farm payrolls figures and US retail sales data.
Tuesday's UK corporate calendar includes full annual results from the Hollywood Bowl and a trading statement from IG Group.
