FTSE Weekly Performance and Market Drivers

Feb 20 (Reuters) – Britain’s FTSE indexes gained on Friday and were set to end the week higher, led by defence stocks, while expectations for a March rate cut from the Bank of England and easing AI-disruption worries globally also aided sentiment.

Index Moves: FTSE 100 and FTSE 250

The blue-chip FTSE 100 was up 0.6% at around 1134 GMT and was trading just shy of a record high, while the domestically focused FTSE 250 rose 0.5%.

Defence Stocks Rally on Geopolitics

Geopolitical tensions between Iran and the U.S. and the greater likelihood of defence cooperation within Europe helped defence stocks gain 6% this week.

Aston Martin outlook and brand strategy

Earnings Movers and Sector Shifts

On the earnings front, Aston Martin fell 1.4% after the luxury carmaker warned of a bigger annual loss and said it plans to sell the right to use its name on the Aston Martin F1 Team to bolster its finances after a challenging year.

The broader auto sector lost 1.4% and was the only one in the red.

Anglo American loss and share reaction

Anglo American posted a $3.7 billion loss following another write-down in its diamonds business. However, shares added 1.3%, tracking higher base and precious metal prices.

Weekly Trend: Largest Jump in Weeks

Both FTSE indexes were on track for weekly gains, with the blue-chip index set for its biggest one-week jump in nearly two months.

Macro Data: Inflation, Manufacturing, Retail Sales

Investors were relieved by data earlier this week that showed inflation was steadily nearing the central bank’s 2% target. Strong manufacturing activity data and retail sales numbers on Friday, however, pointed to the risk of price pressures flaring up.

BoE March rate-cut odds

Still, traders see a 78% chance that the central bank will cut interest rates by 25 basis points when it meets next month to shore up the labour market.

AI Disruption Concerns Ease

AI-disruption concerns, which had roiled global markets earlier in the month, appeared to temporarily take a back seat.

US–Iran Tensions in Spotlight

However, simmering tensions between Iran and the U.S. were in the spotlight after President Donald Trump on Thursday warned Iran must make a deal over its nuclear program or “really bad things” will happen.

Report of CEO shake-up

Other Movers: Diageo

Among other movers, Diageo rose 2.7% after a report said new CEO Dave Lewis is planning a major shake-up of his executive team.

(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Vijay Kishore)