The FTSE 100 advanced on Friday as softer U.S. retail sales data tempered expectations for aggressive Federal Reserve interest rate hikes.
London’s blue-chip index gained 0.4% by mid-morning, extending gains from the prior session as investors reassessed the likelihood of further monetary tightening by the U.S. central bank. The Commerce Department reported U.S. retail sales fell 0.1% in May, below forecasts for a 0.3% increase, signaling cooling consumer demand.
The data reduced market pricing for a 75-basis-point rate hike at the Fed’s June meeting, with traders now favoring a 50-basis-point increase. The U.S. dollar weakened against major peers, providing support to exporter-heavy FTSE 100 constituents.
Energy and financial stocks led gains, with Shell PLC and HSBC Holdings PLC up 1.2% and 0.8%, respectively. Consumer staples lagged, with Unilever PLC down 0.3% despite the broader index’s advance.
The FTSE 100’s gain followed a 0.7% rise in the prior session, reflecting a broader risk-on sentiment in global equities amid easing growth concerns. Investors will monitor upcoming U.S. inflation data and the Federal Reserve’s policy meeting next week for further direction.
