Banking sector boosts London index, while UK economic data and US debt talks shape market sentiment.

London’s FTSE 100 index finished the day in positive territory, buoyed by moderate gains in the banking sector and ahead of an eventful week in global markets. The blue-chip index rose by 14.12 points, or 0.18%, to close at 7,770.99, despite a brief afternoon dip triggered by concerns over the US debt ceiling crisis.

The index was supported by solid performances from major banks, including Standard Chartered, HSBC, and NatWest, the latter of which announced the sale of £1.26 billion worth of shares, reducing the UK government’s stake to 38.69%. This move is part of the government’s plan to eventually privatise the bank.

As the week progresses, investors are preparing for key data releases. On Tuesday, the UK’s Office for National Statistics (ONS) will reveal the latest public sector finances, which are expected to show a significant rise in borrowing due to government support for energy costs. Wednesday will see the release of the UK’s inflation figures, a critical test for the Bank of England’s efforts to meet its 2% inflation target.

Meanwhile, eyes are also on the United States, where President Joe Biden and Republican leader Kevin McCarthy are set to meet to discuss raising the debt ceiling and averting a potential financial crisis. Goldman Sachs has warned that the US could run out of funds in three weeks unless the deadlock is resolved.

Craig Erlam, senior market analyst at OANDA, commented, “While the start of the week hasn’t been overly exciting, things are expected to pick up with key data releases, debt ceiling talks, and other market-moving events on the horizon.”

Other European markets had a more cautious start, with Germany’s DAX down 0.32% and France’s CAC 40 slipping 0.18%. In the US, trading was mixed, with the S&P 500 edging up by 0.1% while the Dow Jones declined by 0.2%.

The British pound weakened slightly, falling 0.15% against the US dollar to 1.243, and down 0.1% against the euro to 1.15.

In corporate news, payments company Wise saw its shares drop 3.7% after announcing that its CFO would step down next year to recover from a cycling accident. Meanwhile, Ryanair’s share price rose 2.1% as the airline reported a return to profitability, benefiting from strong travel demand and higher ticket prices.

Among the biggest gainers on the FTSE 100 were Standard Chartered, Admiral Group, Ocado, BT, and Flutter Entertainment. On the other hand, the biggest losers included Frasers, ConvaTec, Vodafone, Halma, and Smiths Group.