Stocks in London closed higher on Monday with uncertain economic conditions doing little to damp investor enthusiasm in London even as global peers fell.
Central banks take centre stage this week with interest rate decisions from the Federal Reserve, Bank of England and Bank of Australia while further questions were raised of the European Central Bank - which raised rates by 75 basis points on Friday - after a slower than expected growth reading but hotter inflation.
Helping to offset the uncertain mood in London on Monday were M&A prospects at International Consolidated Airlines Group, a recovery for banking stocks and a rise for British Gas owner Centrica following a broker rating increase.
The FTSE 100 index closed up 46.86 points, 0.7%, at 7,094.53. The FTSE 250 ended down 26.74 points, 0.2%, at 17,889.93, though the AIM All-Share added 0.76 of a point, 0.1%, at 806.13.
The Cboe UK 100 closed up 0.9% at 710.24, the Cboe UK 250 ended down 0.1% at 15,365.31, and the Cboe Small Companies ended down 0.1% at 12,335.58.
For the whole of October, the FTSE 100 added 2.9%, its first monthly gain since July. In September, the index gave back 5.4%.
In European equities on Monday, the CAC 40 in Paris ended down 0.1%, while the DAX 40 in Frankfurt added 0.1%.
In New York, stocks were lower at the time of the closing bell in London. The Dow Jones Industrial Average was down 0.2%, the S&P 500 down 0.5% and the Nasdaq Composite 0.7% lower.
The pound was quoted at $1.1500 late Monday in London, down from $1.1593 at the equities close on Friday. A weaker pound acts as a tailwind for the FTSE 100, which is stacked with foreign earners.
Providing the focus for the week ahead, there will be interest rate decisions from the US Federal Reserve on Wednesday and the Bank of England on Thursday. Both are expected to enact 75 basis point hikes.
AJ Bell analyst Danni Hewson commented: 'investors will be weighing up exactly what the Fed's next steps might be as it seeks to battle inflation in the face of a global slowdown and earnings woes.
'While no one expects any deviation from script this week, investors will be seeking to gauge what might happen next from comments made by policy makers during this meeting and whether the hawkish stance clear from the last meeting might have softened.'
The RBA is on Tuesday expected to hike by 25 basis points again.
The euro stood at $0.9885 on Monday, down slightly against $0.9943 late Friday.
The single currency struggled to make headway after data showed economic growth in the eurozone slowed. However, an inflation reading was hotter-than-expected.
According to a flash estimate from Eurostat, on a seasonally-adjusted annual basis, the eurozone economy grew 2.1%, slowing from 4.1% in the second quarter.
Meanwhile, eurozone consumer prices are predicted to have risen 10.7% annually in October, speeding up from a 9.9% hike in September. The reading was ahead of consensus of 10.2%, as cited by FXStreet.
In London, IAG added 4.9%.
The Times reported that British Airways-owner is eyeing a potential acquisition of budget airline easyJet, as part of renewed plans to consolidate the European airline industry.
IAG also has its eye on Portugal's flag carrier TAP. It already owns Spain's Iberia and Vueling and Ireland's Aer Lingus.
easyJet shares closed up 6.1%. TAP Air Portugal is currently state-owned.
Hewson said 'the last few years have proven incredibly costly to the industry and have also altered the marketplace, which is why investors seem rather pleased at the prospect that two could be on the brink of becoming one.'
Share price recoveries for banking stocks also boosted the FTSE 100. NatWest, among the best of the lot, rose 4.6%. The stock had slumped 9.2% on Friday on poorly-received quarterly results. Lloyds rose 1.8% on Monday, reversing some of Friday's 3.5% fall.
Centrica climbed 4.4%. Jefferies lifted the British Gas owner to 'buy' from 'hold'.
Royal Mail owner International Distributions Services also closed 4.4% higher, as it received two bits of good news.
The Communications Workers Union has cancelled a planned strike over the next fortnight, in a long running dispute over pay and conditions.
Additionally, IDS said the UK business secretary has confirmed that no further action will be taken with regards to Vesa Equity Investment's 22% stake in IDS. Vesa is a Luxembourg-based company, and its stake was being reviewed under the National Security & Investment Act 2021.
Vesa is controlled by Czech billionaire Daniel Kretinsky, who also owns stakes in West Ham United football club and Sainsbury's.
Elsewhere in London, TP Group shares soared to 2.18 pence, from 0.78p on Friday.
The consulting, software and engineering company has agreed to a £17.5 million takeover by Science Group.
TP shareholders will receive 2.25 pence per share in cash, which is almost triple that of the closing price of 0.78p on Friday. Around 11.7% TP shareholders have given a letter of intent to accept the offer. Science Group itself already holds a 28% stake, meaning almost 40% support in total.
Science Group added 4.9%.
Gold was quoted at $1,638.60 an ounce at late on Monday, slightly lower than $1,640.91 on Friday. Brent oil was trading at $92.24 a barrel, lower than $93.34.
Against the yen, the dollar was quoted at JP¥148.61 late Monday in London, up from JP¥147.54 late Friday.
Tuesday's economic events calendar has a slew of manufacturing PMI readings, including the UK at 0930 GMT and the US at 1345 GMT.
The local corporate calendar has third-quarter results from oil major BP and a trading statement from pest control and hygiene firm Rentokil Initial.
Copyright 2022 Alliance News Limited. All Rights Reserved.
