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London’s blue chip index closed higher on Monday, hitting new highs, as key manufacturing surveys showed sector growth in January both domestically and in the US. The FTSE 100 index closed up 118.02 points, 1.2%, at 10,341.56, a record close, and just shy of a new intra-day high of 10,345.48. The FTSE 250 ended up 172.69 points, 0.7%, at 23,426.05, but the AIM All-Share closed down 3.19 points, 0.4%, at 814.34. The Cboe UK 100 was up 1.3% at 1,032.05, the Cboe UK 250 was up 0.6% at 20,643.08, and the Cboe UK Small Companies was down slightly at 18,694.32. In European equities on Monday, the CAC 40 in Paris closed up 0.7%, while the DAX 40 in Frankfurt ended 1.1% higher. The gains in London came despite further hefty falls in metal prices and in the cost of Brent crude. Gold was quoted lower at $4,696.11 an ounce on Monday, down sharply against $5,003.82 at the same time on Friday. The price of silver fell a further 6.4% on Monday, while copper eased 1.3%, although both rallied from earlier lows. Strategists at Barclays said: ‘The volatility has been extreme, positioning is stretched, and short term technicals look overheated - but it seems that the broader drivers behind the move remain powerful and persistent. Whilst gold’s allure still glitters as a hedge to left-tail risks, in the short term, a pull back and positioning reset after its sharp ascent look warranted. We believe that the underlying bid for the asset will remain at lower levels.’ Despite screens flashing ’overvalued’, a certain amount of premium to gold’s fair value, which Barclays puts at $4,000 per ounce, looks ‘durable, suggesting gold is not a bubble.’ ‘Inflation continues to push gold’s fair value higher, and central bank demand remains firm. Add mounting concerns around policy credibility and fiat stability, and the backdrop supports elevated pricing,’ Barclays said. JPMorgan believes the sell-off was partly driven by activity in the derivatives markets, which exacerbated volatility and catalysed a negative rebalancing effect in the market. But the broker sees the pull-back ‘as an opportunity and remain firmly bullish long term on gold.’ While Deutsche Bank Research reiterated its $6,000 per ounce gold price target. Morgan Stanley said the nomination of Kevin Warsh as Federal Reserve Chair on Friday had played its part in the market volatility. The broker said Warsh’s appointment is aimed at ‘restoring market confidence following a parabolic rise in precious metals and a rapid weakening in the US dollar.’ ‘While the administration favours a weaker dollar to support competitiveness and reduce trade imbalances, the pace of the recent move was likely undesirable. Warsh’s reputation as a balance sheet hawk is seen as a credibility anchor, helping to cool gold prices and modestly support the dollar-buying time for broader policy objectives to play out as designed.’ In London, Endeavour Mining and Fresnillo fell 2.7% and 0.9% respectively, with Antofagasta 0.2% lower. Anglo American bucked the weaker trend, rising 1.2%, as Citi upgraded to ’buy’ from ’neutral’ calling its proposed merger with Teck Resources to form AngloTeck ‘transformative’. Oil also headed south, dragging BP and Shell down 0.4% and 0.5% respectively. Brent oil was quoted at $66.03 a barrel at the time of the London equities close on Monday, down from $69.76 late on Friday. Tom Stevenson, investment director at Fidelity International said the precious metal ‘rout’ provides a nervous environment for markets in a big week for central banks. ‘Both the Bank of England and European Central Bank announce rate decisions on Thursday. Both are expected to leave rates on hold,’ he noted. ‘The Bank of England is widely forecast to hold rates at 3.75%, with a majority of rate-setters focused on elevated wage growth and just a couple of dissenters pushing for a further cut in the cost of borrowing to support the economy,’ Stevenson explained. ‘Despite this, the Bank will probably signal further cuts later in the year as policies introduced in the budget weigh on prices and the impact of a stronger pound feeds into the economy.’ The recent spate of more optimistic economic updates continued with news that job cutting in the UK’s manufacturing sector fell to its weakest since losses started 15 months ago as growth in activity in the sector accelerated in January. The S&P Global UK manufacturing purchasing managers’ index jumped to a 17-month high of 51.8 points in January, from 50.6 points in December, beating the first estimate of 51.6 points. UK business optimism was at its highest level since before the 2024 autumn budget, with 58% of manufacturers expecting output to rise over the next 12 months. S&P said that confidence reflected hopes for a recovery in market confidence and a reduction in geopolitical uncertainty. Meanwhile, UK house prices rose more than expected in January, according to a report. The Nationwide house price index showed UK house price growth accelerated to 1.0% year-on-year in January from 0.6% in December, ahead of the FXStreet-cited consensus which forecast an increase of 0.7%. The pound was quoted lower at $1.3651 at the time of the London equities close on Monday, compared to $1.3719 on Friday. The euro stood lower at $1.1804, against $1.1881. Against the yen, the dollar was trading higher at JP¥155.52 compared to JP¥154.30. Stocks in New York were higher. The Dow Jones Industrial Average was up 0.9%, the S&P 500 index was 0.5% higher, and the Nasdaq Composite rose 0.6%. Reports from S&P Global and the Institute for Supply Management showed the US manufacturing sector faster than expected in January. The ISM’s manufacturing PMI registered 52.6 in January, up sharply from 47.9 in December, and ahead of the FXStreet consensus which forecast a more modest improvement to 48.5. It was the first expansion in 12 months. TD Economics called it a ‘solid report’ but cautioned ‘one month does not make a trend.’ ‘The recent ramp up in trade pressure, especially with partners where agreements are already in place suggests that trade uncertainty may persist longer than previously anticipated. This environment will continue to pose near term challenges for the manufacturing sector,’ the broker added. The yield on the US 10-year Treasury was quoted at 4.28%, stretched from 4.25%. The yield on the US 30-year Treasury was quoted 4.90%, widened from 4.85%. Pharmaceutical stocks supported the FTSE 100 with index heavyweights GSK, up 2.6%, and AstraZeneca, up 3.2%. GSK releases fourth quarter results on Wednesday, while trading in AstraZeneca kicked off in New York on Monday. In addition, Cambridge-based AstraZeneca said Imfinzi, in combination with chemotherapy, has been recommended for approval in the EU for the treatment of adult patients with resectable, early-stage and locally advanced gastric and gastroesophageal junction cancers. The biggest risers on the FTSE 100 were JD Sports Fashion, up 5.00p at 86.78p, InterContinental Hotels Group, up 5.60p at 140.40p, International Consolidated Airlines Group, up 15.00p at 433.20p, AstraZeneca, up 440.00p at 14,040.00p, and Beazley, up 35.00p at 1,168.00p. The biggest fallers on the FTSE 100 were Endeavour Mining, down 112.00 pence at 4,110.00p, BAE Systems, down 52.00p at 1,922.00p, Autotrader, down 6.20p at 531.80p, Fresnillo, down 34.00p at 3,668.00p and Melrose, down 4.80p at 621.20p. Tuesday’s global economic calendar has an interest rate decision in Australia overnight, Spanish unemployment data and Worldpanel grocery market share figures in the UK. Tuesday’s UK corporate calendar has half year results from Alumasc and Filtronic. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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