FTSE 100 gains on earnings boost, focus shifts to BoE

London’s benchmark index moved higher on Thursday, supported by strong corporate updates and gains in commodity-linked stocks, as investors turned cautious ahead of a key interest rate decision from the Bank of England.

The blue-chip FTSE 100 rose 0.9% to 10,307.19 points by 0942 GMT, while the midcap FTSE 250 edged 0.4% higher.

The gains came despite broader caution in global markets, as traders assessed geopolitical risks and central bank signals.

Corporate earnings drive market sentiment

Engineering and mining stocks played a key role in lifting the index.

Shares of Rolls-Royce climbed nearly 6.8% after the company reiterated its profit outlook, offering the biggest boost to the benchmark index.

However, not all engineering firms performed well.

Weir Group declined 7.5% after reporting a fall in first-quarter orders, highlighting mixed sector performance.

Mining giant Glencore added 2% after reporting a 19% increase in first-quarter copper production.

The rise in commodity output helped offset broader market concerns and contributed to overall gains.

Oil price surge lifts mining stocks

Global oil prices climbed to a four-year high of more than $122 per barrel amid concerns that a potential US-Iran conflict could escalate, leading to prolonged supply disruptions in the Middle East.

The surge in crude prices raised concerns about inflation, which in turn supported gold prices.

This boosted shares of major mining companies, with Endeavour Mining rising 6.2% and Hochschild Mining gaining 5.1%.

FTSE 100 lags global peers

Despite Thursday’s gains, the FTSE 100 has risen only 1.3% this month, significantly underperforming European and US benchmarks.

Markets view the UK as particularly vulnerable to rising energy prices due to its heavy reliance on natural gas.

Political uncertainty has also weighed on sentiment.

Concerns surrounding Prime Minister Keir Starmer and the appointment of Peter Mandelson as ambassador to the United States have added to market unease.

The controversy, linked to Mandelson’s past association with Jeffrey Epstein, has shown little sign of fading.

Focus shifts to central bank decisions

Investor attention is now firmly on the Bank of England’s policy decision, expected at 1100 GMT.

The central bank is widely anticipated to keep interest rates unchanged, but markets are closely watching for guidance on how geopolitical tensions, particularly the Iran conflict, could impact inflation.

In parallel, the European Central Bank is also expected to hold rates later in the day, following a similar move by the Federal Reserve, which kept rates unchanged a day earlier.

Traders are currently pricing in at least two additional rate hikes of 25 basis points each by the Bank of England before the end of the year, reflecting persistent inflation concerns and uncertainty around energy markets.

Overall, London markets remained supported by strong corporate earnings and commodity gains, but caution prevailed as investors awaited central bank signals and monitored geopolitical risks closely.