The FTSE 100 climbed into the green on Thursday afternoon as European stocks were boosted by the European Central Bank’s updated inflation forecasts.
The London index reached its highest level for almost two weeks after the ECB’s decision to hold interest rates again but significantly reduce its inflation and GDP forecasts.
It gave stocks across Europe an afternoon rally as traders saw it as a signal that central bankers could soon seek to cut interest rates.
The German Dax index was up 0.7% at the close and the Cac 40 closed up 0.77%.
London’s top flight rose 13.15 points, or 0.17%, to end the day at 7,692.46.
Meanwhile, the FTSE 250 had another day of robust gains after receiving a lift from the Chancellor’s announcement of a British stocks ISA, with economists at Citi predicting it will give London-listed firms a £1.5 billion boost.
Stateside, the S&P 500 rose to another record high amid continued strong trading for its major tech stocks.
Meanwhile, sterling was a beneficiary of dovish tones from the ECB and Federal Reserve boss Jerome Powell, who said a rate cut is still expected in the US this year.
The pound was up 0.44% at 1.279 US dollars and was 0.07% higher at 1.169 euros at market close in London.
In company news, Virgin Money UK shares leapt by more than a third after the lender agreed a £2.9 billion proposed takeover by Nationwide Building Society.
Nationwide put forward a 220p-a-share approach for Virgin Money, including a planned 2p-per-share dividend payout, in a move set to create the UK’s second largest mortgage and savings group.
Virgin Money shares were 55.65p higher at 214.7p after the companies said they had reached a preliminary agreement on the deal.
Ladbrokes’ parent firm Entain was among the FTSE’s weakest performers after it warned it faces a hit of around £40 million this year due to regulatory challenges in the UK and overseas.
The gambling giant also revealed it swung to a pre-tax loss of £842.6 million in 2023 from profits of £102.9 million in 2022 after paying £585 million to resolve a probe into alleged bribery at a former Turkish subsidiary.
Shares in the business finished 40.4p lower at 790p.
ITV shares made strong gains on Thursday after it said it planned a further £50 million worth of cuts.
It helped shares to rise by 7.42p to 68.38p despite profit falling from £501 million in 2022 to £193 million before tax last year.
Funding Circle shares leapt by 15.3p to 43.3p after the commercial lender said it plans to offload its US arm and announced a share buyback.
Elsewhere, the price of a barrel of Brent crude oil was up by 0.06% to 82.23 US dollars as markets were closing in London.
The biggest risers on the FTSE 100 were Rentokil, up 75.7p to 504.2p, Anglo American, up 90p to 1,857.4p, Ocado, up 20.4p to 458.3p, Spirax-Sarco, up 390p to 10,660p, and Antofagasta, up 56p to 1,797.5p.
The biggest fallers on the FTSE 100 were Entain, down 40.4p to 790p, HSBC, down 21.3p to 590.7p, Airtel Africa, down 2.6p to 94.4p, Melrose Industries, down 14.6p to 617.4p, and Intercontinental Hotels Group, down 170p to 8,154p.