FTSE 100 Hits Two-Week High Amid US Rate Cut Speculation

The FTSE 100 climbed to a two-week peak, buoyed by increased U.S. interest rate cut bets and robust domestic retail shares after Kingfisher's improved forecast. The blue-chip index rose by 0.7%, spurred by gains in automobile and retail sectors. Analysts anticipate major updates from the Federal Reserve and Bank of England this week.

The FTSE 100 soared to its highest in two weeks on Monday, driven by growing expectations of a significant U.S. interest rate cut and a rally in domestic retail stocks following an optimistic forecast from Kingfisher.

The blue-chip index climbed 0.7%, marking its highest level since September 3. A slight dip in the pound provided some relief to the index's export-focused companies. Every major sector showed gains, with automobiles and retail sectors advancing 1.7% and 1.6%, respectively.

The mid-cap index rose by 0.2%. European home improvement retailer Kingfisher led the FTSE 100's advancement after raising the lower end of its annual profit forecast, citing stronger seasonal sales trends.

With anticipation building ahead of the Federal Reserve's expected interest rate cut on Wednesday, the CME's FedWatch tool indicated a 67% chance of a larger-than-usual 50-basis-point reduction, up from 50%. The Bank of England is also scheduled to meet this week, and while analysts largely expect rates to remain unchanged, investors will focus on signals about the BoE's future plans and bond sale updates.

UK inflation data, due on Wednesday, will be closely monitored for further insights into the BoE's rate plans. In individual stock movements, shares of gambling technology firm Playtech rose by 0.5% after announcing the sale of its Italian unit Snaitech for 2.3 billion euros ($2.56 billion) to Flutter Entertainment, whose shares increased by 1%.

Conversely, Essentra's shares plummeted 24% following a warning that annual operating profits might not meet market expectations due to weaker conditions in Europe and a sluggish recovery in the Americas. Additionally, shares of e-commerce company THG fell 2.3% as it aims to facilitate the demerger of its technology services division. ($1 = 0.8990 euros)

(With inputs from agencies.)