The UK stock market has begun the week on the front foot with the FTSE 100 trading higher by over 60 points as it currently sits just a whisker below the 6800 level. The pound is trading a little lower on the day and has just fallen back below the 1.25 handle against the US dollar.
FTSE attempts to rally
After some volatile trade last week surrounding the shock outcome of the US election the leading UK stock benchmark ended little changed, despite seeing its largest weekly trading range in several months. The inverse correlation with the pound remains strong, with the currency’s fall today one of the factors supportive of stocks. The best performing share so far is DCC (LON:DCC) which has risen by almost 8% after the support services company announced it expected full-year operating profit to beat the market expectations. When the broader index is enjoying a strong up day it’s often the mining stocks that are amongst the biggest gainers and today is a case in point, with Anglo American (LON:AAL), BHP Billiton (LON:BLT) and Glencore (LON:GLEN) all rallying. The biggest laggard is Mediclinic International which is seen lower by just under 2%.
Busy week for UK data
While the trade flows for the pound and FTSE were largely driven by external factors last week, this week the markets are more likely to be in an introspective mood with several key UK economic indicators released. Since BoE Governor Carney’s comments about the Central Bank’s limited tolerance for above target inflation, there has been a greater scrutiny on price levels in the broader economy and with tomorrow seeing both the Consumer Price Index (CPI) data for October released shortly before the latest inflation report hearings, any signs of rising inflationary pressures could boost the pound and in turn weigh on stocks. UK employment figures are scheduled to be released on Wednesday and retail sales numbers on Thursday in what could be keenly viewed data points for investors as they continue to attempt to ascertain the country’s economic health since the EU referendum.