The United Kingdom’s leading stock exchange, London’s FTSE 100, has hit a record intraday high as investors shift capital to European equities.
The U.K.’s mining-heavy FTSE 100 index is up 1.1% on Jan. 17, surpassing a record intraday high of 8,484 points.
The index got a boost from media reports that miner Glencore is in talks with rival Rio Tinto about merging in what would be the biggest consolidation ever in the mining sector.
At the same time, the pan-European Stoxx 600 index is up 0.6%, with nearly all sectors and exchanges in positive territory as investors move into European stocks.
The British market is also getting a boost from growing expectations for further interest rate cuts from the Bank of England.
Recently released data showed that economic growth across the U.K. in November was weaker than expected, while inflation declined more than anticipated to 2.5%.
The situation has markets pricing in 70-basis points of interest rate cuts in the U.K. this year as the central bank tries to boost economic growth.
The FTSE 100 index not only has a large contingent of mining stocks but also boasts a high proportion of international companies and stocks from across Europe.
As such, the index often rises along with other European and international exchanges. So far this year, the FTSE 100 is up 3%, ahead of the 1% gain in the U.S. benchmark S&P 500 index.
