London Stocks Surge Amid Commodity Boom and Anticipated U.S. Rate Cuts

London stocks experienced an uptick on Friday, driven by gains in energy and industrial metal miners. The FTSE 100 rose by 0.5%, while the FTSE 250 increased by 0.2%. Investors are closely watching upcoming U.S. inflation data, which could influence a Federal Reserve rate cut in September.

London stocks experienced a notable rise on Friday, buoyed by gains in energy and industrial metal miners. The increase in commodity prices contributed to this surge, while market participants awaited U.S. inflation data that is expected to inform predictions of a potential September rate cut by the Federal Reserve. By 0708 GMT, the blue-chip FTSE 100 index saw a 0.5% rise, with the mid-cap FTSE 250 gaining 0.2%.

Personal goods stocks rose by 1.1% following a strong sales report from French luxury brand Hermes. Meanwhile, energy stocks, including giants BP and Shell, saw gains of over 1% each as oil prices ticked up slightly. Precious metal miners staged a recovery with a 0.5% increase aligned with firmer gold prices, recovering from the sector's worst day since May 2022. Industrial metal miners also traded higher, up by 1%.

Investors are particularly focused on the U.S. personal consumption expenditure (PCE) numbers expected later in the day to provide further insights into the Federal Reserve's stance on interest rate policies. This follows data showing the U.S. economy grew faster than anticipated in the second quarter while inflationary pressures eased, supporting the possibility of a September rate cut. In company-specific news, NatWest rose 8% despite a 16% dip in first-half pre-tax operating profits. Drax surged 14.7%, leading the FTSE 250, after reporting higher first-half profits and projecting annual profits at the high end of expectations.

(With inputs from agencies.)