UK Shares Rise Amid U.S. Inflation Anticipation and China's Stimulus Measures

UK shares saw a slight uptick on Friday ahead of a U.S. inflation report, with market optimism driven by China's aggressive stimulus measures. The FTSE 100 increased by 0.1% and the FTSE 250 by 0.4%, thanks to strong performances in mining and luxury stocks. Investors are now keenly anticipating the U.S. PCE price index.

UK shares inched higher on Friday as investors awaited critical U.S. inflation data to gauge the Federal Reserve's potential interest rate cuts. The market showcased optimism, buoyed by China's recent aggressive stimulus measures, which benefitted mining and luxury sectors.

The FTSE 100 index saw a modest rise of 0.1% at 0710 GMT, while the FTSE 250 midcap index elevated by 0.4%. Notably, the personal goods sector led the gains, whereas banks emerged as the losers, dropping by 0.5%.

Investors are now focusing on the U.S. personal consumption expenditures (PCE) price index, the Fed's preferred metric for inflation, to discern the upcoming rate cut in November. UK indexes are on track for weekly gains, partly driven by optimism over China's economic turnaround following a series of stimulus measures.

This week, China's central bank lowered interest rates and injected liquidity into the banking system, with expectations of further fiscal measures before the October holidays. Mining stocks surged as metal prices spiked, resulting in an 11% increase in the index of London-listed industrial miners.

Similarly, China-exposed luxury retailers like Burberry also contributed to a 12% weekly gain in the personal goods index. Despite this, the FTSE 100 lagged behind the European STOXX 600, which is projected to gain over 2% this week.

An individual stock performer was Cranswick, which rose by 1.6% after the meat producer forecasted its annual profit towards the higher end of market expectations.

(With inputs from agencies.)