FTSE 100: UK stocks erase losses from last week’s selloff ahead of economic data dump

The FTSE 100 reversed its losses from last week’s massive global selloff on Monday as investors hunt for bargains and look ahead to a slew of economic data in the coming days.

The blue-chip index rose 0.41 per cent to 8,201.26, while the mid-cap FTSE 250, which is more closely aligned with the health of the domestic economy, ticked up 0.16 per cent to 20,658.18

With this morning’s gains, the FTSE 100 has erased its losses from last Monday, which saw London markets rocked by a global selloff triggered by Japan’s central bank raising interest rates and fears of a recession in the US.

“A sense of calm has resumed across financial markets, helping to reverse the tumultuous trajectory of stocks witnessed over the past week,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“In sharp contrast to last Monday’s slide, the FTSE 100 has a spring in its step, easing into the green helped by gains in Asia and on Wall Street on Friday.”

The FTSE 100’s biggest gainer is currently telecoms giant BT, jumping 6.4 per cent after news that its largest shareholder, Altice, had agreed to sell its 24.5 per cent stake in the business to Indian conglomerate Bharti.

The biggest faller is retailer JD Sports. The firm’s shares fell 3.8 per cent after Deutsche Bank downgraded its rating on the stock to “sell” from “hold”, flagging that “subdued” spending in the category.

Investors are looking ahead to an important week for inflation on both sides of the pond. Economists expect UK inflation data for July, due on Wednesday, to show the first uptick so far this year, from two per cent in May and June to 2.3 per cent last month.

Rising inflation, particularly in the services sector, could give the Bank of England less confidence to cut interest rates in September after lowering them for the first time since March 2020 earlier this month.

In a podcast published on Monday, hawkish ratesetter Catherine Mann said the UK should not be “seduced” into thinking the battle to tame inflation is over and that wage pressures could take years to dissipate.

Other data from the Office for National Statistics this week will shed light on UK unemployment, second-quarter GDP and retail sales.

After a weaker-than-expected jobs report helped fuel market mayhem last week, economists expect US inflation data due on Wednesday to show US consumer prices rose three per cent on an annual basis in July, unchanged from June.

The figures will feed into investors’ judgements of whether the Federal Reserve is ready to finally bring interest rates down from a more than two-decade high.