Market Analysis

On Friday, the UK's main stock index reached a three-month high, set to finish the month with modest gains despite a volatile period. The FTSE 100, the blue-chip index, increased by 0.3% as of 0706 GMT, positioning itself for a second consecutive monthly gain and a third straight weekly advance.

The FTSE 250, which focuses more on domestic companies, climbed 0.2%, although it is expected to record a monthly decline.

The pharmaceutical sector emerged as the top performer for the month, while personal goods stocks experienced the most significant losses.

Among the day's highlights, Close Brothers Group and HSBC led the banking sector, with their shares rising 0.8%, while telecommunication and media stocks lagged behind.

August has been a turbulent month for global financial markets, with fears of a potential U.S. recession affecting risk assets and yen-funded carry trades contributing to market volatility. However, optimism increased as the Federal Reserve suggested a possible rate cut.

Attention is now focused on the U.S. inflation report and the euro zone's preliminary inflation data, both of which are due later today.

Regarding monetary policy, the Bank of England is anticipated to maintain higher interest rates longer than its counterparts in the U.S. and euro zone. While the Federal Reserve and European Central Bank are expected to lower rates in September, the Bank of England is projected to keep rates steady, according to LSEG data.

In domestic news, Nationwide Building Society reported a surprise 0.2% drop in house prices for August, though prices were still up 2.4% year-on-year.

Paraphrasing text from "Reuters" all rights reserved by the original author.