MARKET REPORT: Feelgood FTSE is buoyed by hopes of a rate cut early next year

London's stock market rose following the return to trading after Christmas – buoyed by optimism over possible rate cuts early next year.

In a positive day for investors, the FTSE 100 rose 0.4 percent, or 27.44 points, to 7,724.95 and the FTSE 250 rose 0.5 percent, or 89.80 points, to 19,720.75.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: 'The brakes are not yet being applied to the Santa rally as investors eye rate cuts in the US as early as March.

“However, the full impact of painful borrowing costs has yet to be felt, and given the other challenges countries face next year, from climate change and debt management, pessimism is still at risk of creeping back.”

On Wall Street, the Dow Jones Industrial Average rose 0.1 percent, while the S&P 500 fell slightly and the Nasdaq rose 0.05 percent.

Oil prices fell slightly, while Brent crude fell 1 percent to below $80 a barrel. But prices are likely to remain high due to Israel's military campaign in Gaza and falling inflation in the US, analysts say.

And bitcoin – the world's largest cryptocurrency – was coming off a strong end to the year.

Prices are up more than 160 percent in 2023, with the recent rally driven by hopes of the launch of a spot bitcoin exchange-traded fund.

Back in London, AstraZeneca marched a day after striking a deal to buy Shanghai pharmaceutical company Gracell Biotechnologies for up to £950 million, the latest move to expand its presence in China. Shares rose 0.9 percent, or 92p, to 10,528p.

There were also gains for Intertek after the quality assurance company's rating was upgraded from 'underperform' to 'outperform' by BNP Paribas Exane. The shares added 1.7 percent, or 69 pence, to 4,257 pence.

Aviva rose 0.4 percent, or 1.7 cents, to 432.8 cents after it said it expected to earn an additional £80 million from the sale of its stake in a Singapore-based company founded in 2020.

Stock Watch – WH Ireland

WH Ireland has pared losses as City's stockbroker highlighted a turnaround in fortunes. Half-year results showed sales fell by a quarter to £10.7 million, while losses increased from £400,000 to £3.9 million.

But the report said that while market conditions were “still challenging”, they had shown “tentative signs of improvement in both indices and activity levels since November 2023, as the prospect that rates have peaked becomes more plausible”.

Shares rose 7.1 percent, or 0.25p, to 3.75p.

It now expects to receive £930 million from the sale of its 25.9 percent stake in Singlife to Japan's Sumitomo Life, up from a previous estimate after the deal was agreed in September.

London-listed insurer Aviva plans to use the additional proceeds to reinvest in the business, fund deals and return money to shareholders.

Elsewhere, Capricorn Energy said it could be eligible for £19.5 million or £39 million in contingent payments following the 2020 sale of an oil project in Senegal to Australia's Woodside.

The payments depend on the average oil price above $55 per barrel or $60 during the first six months of production and the start of regular production. Capricorn shares rose 4.2 percent, or 6.8p, to 168p.

The boss of a US energy company has resigned, less than two weeks after talks between his company and an oil giant over the formation of a joint venture ended.

John Cowan, who has led Canadian Overseas Petroleum Limited (COPL) since the summer, has left his job but will remain on the board as long as a replacement is found for him.

It comes after talks ended this month between COPL and an 'incumbent energy company' to establish a joint venture to develop and exploit oil reserves and resources at Cole Creek in Wyoming, in the US. Shares rose 5.9 percent, or 0.02p, to 0.34p.

HG, the manager of HG Capital Trust (HGT), has agreed to a partial sale of the Iris software group to Los Angeles-based private equity firm LGP.

The deal values ​​HGT's investment in Iris at almost £100 million.

Shares in HGT rose 1.4 percent, or 6p, to 433p.