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On Tuesday, UK stocks made gains supported by a decrease in the value of the pound and bond yields. This was driven by a slowdown in domestic wage growth, raising expectations that the Bank of England might initiate monetary policy easing in the near future. The FTSE 100, a leading stock index, increased by 0.8% and reached its highest point since February 20th. According to data, wages in Britain, not including bonuses, increased at the slowest rate since October 2022 in the three months leading up to the end of January. Additionally, the unemployment rate unexpectedly rose. Following the release of this data, the yield on the benchmark 10-year gilt dropped to 3.941%, and the pound weakened by 0.2%, which supported the stock market.Money markets are currently factoring in approximately a 75 basis point reduction in interest rates from the Bank of England, an increase from about 67 basis points the previous day. Life insurers and lenders sensitive to interest rate changes saw their sectoral stocks rise by around 1.8% each, while homebuilders performed poorly, with Persimmon dropping 3.6% after warning of challenging market conditions for the rest of the year. Persimmon, a British homebuilder, is experiencing a 3.12% decrease in its shares at 1,334.7p, making it the top loser on the FTSE 100. The company has issued a warning about the subdued market conditions expected throughout the year, despite a relatively good start to 2024. Persimmon has reported a pre-tax profit of 351.8 million pounds ($449.99 million), down from 730.7 million pounds reported the previous year. However, the company has observed an increase in the net private sales rate per outlet per week in the first ten weeks of 2024, standing at 0.59 compared to 0.54 in the same period in 2023. CEO Dean Finch remains optimistic about the significant pent-up demand for homes, despite the uncertain near-term outlook. Analyst Richard Hunter from Interactive Investor notes that there is a split of opinion in the market regarding Persimmon’s trading performance, suggesting a potential shift in interest in the company’s shares. The stock has seen an 11.02% increase in the last 12 months as of the last close.On the positive side of the ledger Entain, the owner of Ladbrokes, has surged to the top of the index, gaining over 4%,after news emerged that it has enlisted bankers to facilitate the sale of PartyPoker. This move is aimed at warding off activist investors by revitalising its primary operations. Sky News reported that Entain is collaborating with Oakvale Capital advisors to potentially sell its online poker business. Sources in the industry, approached about the sale, anticipate that it could fetch approximately £150m.
FTSE Bias: Bullish Above Bearish below 7700

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