UK’s FTSE 100 notches record closing high in broad rally

UK’s FTSE 100 notches record closing high in broad rally

By Shubham Batra, Pranav Kashyap and Medha Singh

(Reuters) -The UK’s FTSE 100 notched a record closing high on Tuesday in a broad rally as traders returned from a long weekend to price in more interest rate cuts from the Bank of England ahead of its policy meeting later in the week.

The blue-chip FTSE 100 index breached the 8,300 mark to hit a record high of 8,335.68 points and finished 1.2% higher. It was the 11th time the index has ended higher in the last 14 sessions.

The exporter-heavy FTSE 100 stocks also got a boost from a weaker sterling, as investors priced in two Bank of England (BoE) rate cuts this year, with the first likely in August.

Traders expects the BoE to keep interest rates unchanged on Thursday.

“There are still clear risks to the UK equity,” said AJ Bell, investment director Russ Mould.

“There is a general election coming up and a change of government is possible; the nation is heavily indebted; and the Bank of England looks a bit trapped between a low-growth rock and a sticky-inflation hard place,” Mould added.

Adding to Tuesday’s upbeat mood, a survey showed British construction companies enjoyed their fastest expansion in more than a year last month.

The mid-cap FTSE 250 gained 1.2% to end at its highest in over a year.

Precious metal miners added 2.3% and industrial support services stocks advanced 2.6% among the top sectoral gainers.

BP slipped 1.3% after the oil giant missed forecasts for first-quarter earnings as lower energy prices and a U.S. refinery outage offset increased oil and gas production.

Shell rose 1.3% after report the energy giant is in talks with Saudi Aramco to sell its gas station business in Malaysia and a deal could be worth up to $1 billion.

Shares of carriers Easyjet tumbled 5.8% and Wizz Air slumped 7% after Ryanair Chief Executive Michael O’Leary warned ticket fare prices this summer are likely going to be lower than previously expected.

(Reporting by Shubham Batra and Medha Singh in Bengaluru; Editing by Sohini Goswami, Savio D’Souza and Josie Kao)