FTSE 100 FINISH LINE 17/12/25
The UK's stock market indexes experienced a rebound on Wednesday, primarily driven by gains in major banks, as inflation figures came in lower than anticipated, bolstering expectations for an interest rate cut by the Bank of England. The FTSE 100, the blue-chip index, climbed 1.5%, on track for its best performance since April 14. After experiencing sharp declines in energy and defence stocks that led the benchmark index to fall on Tuesday, the midcap FTSE 250 index increased by 1%, reaching the highest level in nearly seven weeks.
The annual rate of UK CPI inflation decelerated more than anticipated in November, dropping to an eight-month low of 3.2% from October's 3.6%. This outcome fell below both market expectations, which predicted a decline to 3.5%,. According to the ONS, the decline was widespread across most major categories, largely influenced by earlier and more significant discounting associated with Black Friday. Inflation rates for both services (4.4% y/y) and core components (3.2% y/y) also eased, with the latter marking its lowest level of the year. These trends offer promising signs that underlying inflation is moving in the right direction. Following the data release, market expectations for a December interest rate cut by the Bank of England (BoE) have strengthened, alongside increased market pricing for further rate cuts in 2026.
The FTSE 350 index, which tracks banking stocks, was the frontrunner with a 2.9% rise, achieving its highest level since 2008. HSBC Holdings saw a 3.8% increase, attributed to a brokerage upgrade, while Standard Chartered and Barclays rose by 2.2% and 2.3%, respectively. Energy stocks rebounded by 2.5% after a sharp drop in the previous session, buoyed by soaring oil prices following U.S. President Donald Trump's order for a complete blockade of all sanctioned oil tankers to and from Venezuela. Industrial metal miners also saw significant gains of 2.4%. The day's movements positioned the FTSE 100 for its best year since 2009, rising 20.5% year-to-date, outpacing Wall Street's benchmark S&P 500 index, which has only increased by 15.6% this year. Among individual stocks, outsourcing company Serco's shares surged 5.6%, hitting a decade high after the firm projected profits exceeding analyst expectations for the current year and the next. Conversely, business supplies distributor Bunzl was the top loser on the FTSE 100 index, with a 2.8% drop following the company's forecast of a slight year-over-year decrease in its operating margin for 2026..
TECHNICAL & TRADE VIEW - FTSE100
Daily VWAP Bullish
Weekly VWAP Bullish
Above 9720 Target 9920
Below 9700 Target 9550
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!