FTSE 100 Rises Amid Sterling Slide as Political Drama Unfolds in France

The UK's FTSE 100 closed at a six-week high, bolstered by a slide in sterling that benefited international firms. The midcap FTSE 250 remained steady amid political tensions in France. British manufacturing recorded its sharpest contraction in nine months, with all eyes on the Bank of England for further guidance.

The UK's FTSE 100 index touched a six-week closing high on Monday, bolstered by a slip in the value of sterling that favored international firms reliant on a strong dollar.

Despite global market fluctuations, the FTSE 100 managed a 0.3% rise, hitting its best performance since October 21 as November closed with a modest 2.2% gain. The pound's 0.8% drop against the dollar brought relief to giants like Unilever, HSBC, and Anglo American, which draw significant revenue in dollars.

In contrast, the FTSE 250 remained flat, as investors monitored political dynamics in France. French equities rebounded following Prime Minister Michel Barnier's unexpected concession to Marine Le Pen's National Rally, lifting plans to cut medications reimbursements to secure his 2025 budget plan.

Chris Beauchamp, chief market analyst at IG, labeled the trading day as one of "diverging fortunes" within Europe, pointing to the FTSE 100's steady performance against a thriving Dax and a volatile CAC40 impacted by France's political crisis.

The market's attention is now set on the Bank of England's Governor Andrew Bailey, whose upcoming speech could provide insights on future monetary policies. Meanwhile, British manufacturing has seen its sharpest decline in nine months due to dwindling orders and persistent supply chain issues.

Homebuilder stocks such as Vistry Group and Persimmon faced a downturn following RBC's downgrade of their ratings. Vistry and Persimmon's shares fell by 3.9% and 1.3%, respectively.

(With inputs from agencies.)