The FTSE 100, one of the most watched stock market indexes in the world, had a mixed day on October 22, 2024. At first, it looked like the index was struggling, but by the end of the day, there were some positive signs. With news about the UK economy growing faster than expected, banks making big decisions, and miners seeing gains, it was a day full of ups and downs. Let’s break down what happened in simple terms.

A Slow Start for FTSE 100

The FTSE 100 began the day with a small drop, losing about 7 points early in the morning. This drop left the index standing at 8,310 points. But the story didn’t end there. The whole day saw the market bouncing back and forth as different industries and companies made moves that caught the attention of investors.

One of the biggest pieces of news that helped the market was from the International Monetary Fund (IMF). They announced that the UK economy is expected to grow faster than they thought just a few months ago. Instead of the 0.7% growth they predicted in July, the new forecast says the UK economy will grow by 1.1% in 2024. This was welcome news after many months of uncertainty.

This news came alongside some changes in the banking sector, which added even more excitement to the market.

Barclays Looks to Sell Stake in Payments Business

One of the key stories of the day involved Barclays, a major UK bank. Barclays has been in talks with the Canadian fund manager Brookfield about selling a piece of its payments business. They had tried to sell the entire business earlier this year but couldn’t find a buyer.

This time, the talks are about selling just a majority stake, not the whole thing. The deal is expected to work like a farm-in agreement, which means Brookfield will cover the costs of growing the business rather than paying a large amount of money upfront.

While no specific numbers were shared, previous reports suggested that the value of the deal could be anywhere between $800 million and $2.5 billion. Shares of Barclays saw a slight increase, rising by 1.75p to 241.5p.

Miners Lead the Gains

As the day went on, mining companies helped lift the FTSE 100 a little. Miners like Fresnillo, Anglo American, and Antofagasta saw gains, mostly because of rising gold and silver prices. Fresnillo, for example, had a strong 3.5% rise.

This wasn’t enough to push the whole index into the green, though. By late afternoon, the FTSE 100 was down 13 points, sitting at 8,304. Other companies, like Centrica and Admiral Group, saw their shares fall, which kept the index in negative territory.

Still, the fact that miners were seeing some success was a positive sign amid a somewhat shaky day.

HSBC Splits UK and Asian Businesses

Another major headline came from HSBC, one of the biggest banks in the world. HSBC announced that it would split its UK and Asian businesses. This is a significant move, as the bank has long been a global player with operations in many countries. Splitting these two regions means that HSBC is trying to focus more on local markets and make each part of the business stronger on its own.

The news came as a surprise to many, but it also signaled that HSBC is looking to adapt to a changing global economy. The bank believes this move will help them grow even faster in the future by tailoring their strategies to each region’s needs.

Wall Street Stumbles Amid Global Uncertainty

Across the Atlantic in the United States, the stock market had a tough day as well. The Dow Jones and the S&P 500 both fell by about 0.4%, and the Nasdaq slipped 0.2%. This was despite some companies, like General Motors and Philip Morris, reporting better-than-expected earnings.

The drop in the US markets was mainly due to growing worries about global conflicts and the upcoming US presidential election. With tensions in the Middle East and Europe, as well as uncertainty around who will win the US election, investors were nervous about what might happen next.

In particular, there’s growing speculation that Donald Trump could win the election next month. This possibility has caused bond yields in both the UK and the US to rise. Higher bond yields typically mean that investors are selling off bonds, which happens when they expect inflation to rise in the future. Trump’s policies are seen as potentially causing inflation, which is why this is happening.

UK Bond Yields on the Rise

In the UK, the yield on 10-year government bonds, known as gilts, rose by 0.7% to 4.17%. This was the second day in a row that bond yields had climbed. In the US, the yield on 10-year Treasury bonds briefly topped 4.2% before falling back slightly.

This rise in bond yields is a sign that investors are worried about what the future holds. With just two weeks until the US election, many are bracing for what could be a volatile time in the markets.

IMF Boosts UK Growth Forecast

To end on a positive note, the International Monetary Fund (IMF) raised its forecast for UK economic growth. As mentioned earlier, the IMF now expects the UK economy to grow by 1.1% in 2024, which is better than their previous prediction of 0.7%.

This places the UK among the top three G7 nations in terms of growth this year, just behind the US and Canada. The UK is also expected to outperform countries like Germany, Italy, and Japan, whose economies are predicted to struggle.

In conclusion, it was a day full of ups and downs for the FTSE 100, but with news of faster UK growth and big moves from companies like HSBC and Barclays, there’s hope that things could pick up in the coming days.