FTSE 100 rises as falling oil prices boost risk appetite

FTSE 100 Rises Amid Lower Oil Prices, Eyes on Budget and Fed Meeting

Market Overview and Key Drivers

Oct 26 (Reuters) - The FTSE 100 climbed on Monday as a pullback in oil prices boosted risk appetite, starting a week headlined by John Healey's first budget as finance minister and the US Federal Reserve's policy meeting.

The blue-chip FTSE 100 index rose 0.4% to 10,736.81 points by 1118 GMT, while the midcap FTSE 250 rebounded 1%, set for its biggest one-day jump since October 9.

Oil Prices and Energy Sector Performance

• Oil prices retreated over 1%, but stayed close to six-month highs, amid hopes of easing hostilities between the US and Iran. Brent crude futures traded at over $114 a barrel

• Energy stocks fell 1.8%, pulling back from Friday's record high, with Shell and BP down 1.7% and 2% respectively

Sectoral Movements

• Most sectors in the market staged a recovery, with banks up 1.4%, set for their biggest one-day jump since October 12, while investment banking and brokerage stocks rose 1.9%

• Aerospace and defence stocks gained 2.5%, with Rolls-Royce up 2.3%. The jet engine maker had marked its sharpest daily fall since April 2025 on Friday, after French rival Safran warned of slowing aftermarket sales growth

Upcoming Events and Economic Outlook

UK Budget Announcement

• Attention will squarely be on finance minister John Healey's first budget announcement this week, with expectations that it will prioritise bond market stability and offer fresh direction on the government's fiscal strategy

Federal Reserve Policy Meeting

• The Federal Reserve's monetary policy meeting on Wednesday will also be watched for clues on the central bank's interest rate trajectory. It is expected to hold rates at this meeting

Inflation and Interest Rate Expectations

• Data last week showed UK inflation rose more than expected, cementing the case for an interest rate hike from the Bank of England in November

Corporate Earnings and Company News

Market Reactions

• Corporate earnings will also be scrutinized to see how companies are faring in the uncertain geopolitical and interest rate environment

• Computacenter rose 10%, leading FTSE 100 gainers after the technology services provider raised its fiscal 2026 adjusted pre-tax profit forecast

• 3i Group rose 2.8% after the private equity group's portfolio company Future Biogas agreed to acquire the remaining 49% stake in six UK anaerobic digestion plants for £104 million ($138.91 million)

Additional Information

($1 = 0.7487 pounds)

(Reporting by Darshan Kumar and Purvi Agarwal in Bengaluru; Editing by Jochelle Mendonca)