FTSE 100 pauses for breath after rip roaring rally

On Monday, the FTSE 100 took a break and didn't receive any new factors to encourage further growth in the top London index.

According to Russ Mould, the investment director at AJ Bell, the FTSE 100 likely needed to slow down for a moment after achieving numerous consecutive records. On Monday, the index appeared to do just that, as it came to rest.

Last week, the index reached new record levels following an announcement by the Bank of England that they are planning to reduce interest rates soon. Furthermore, the UK successfully emerged from a recession after experiencing 0.6% growth in their GDP during the first quarter.

For the past month, the FTSE 100 has performed better than the stock markets in the United States. This is due to a cyclical rally driven by miners, banks, and housebuilders.

With the Bank of England appearing likely to decrease interest rates soon, the upward trend in stock prices may encounter a tougher obstacle: worldwide economic expansion.

Reducing interest rates can encourage economic development, but it's possible that the Bank of England and Federal Reserve will only decrease rates one time during this year. As a result, the practical effect may not be very significant if they choose to go in that direction.

Susannah Streeter, who leads the money and markets division at Hargreaves Lansdown, has stated that there are worries about interest rates in the US and how they may have to remain high for a significant period of time. The main CPI inflation measure is scheduled to be released this week, which has added to these concerns.

On Monday, the mining industry experienced a slower session due to less promising data from China. Streeter explained that China's economic growth is facing a setback, as the most recent data reveals minimal improvements.

Rio Tinto declined by 0.9%, whereas Glencore remained constant, and Anglo American barely managed to gain 0.3%.

The FTSE 100's outstanding climber was Diploma, which surged by 4% due to an increase of 14% in adjusted operating profit during the past six months.

Russ Mould commented that Diploma, a distribution business specialized in certain areas, was gaining attention as it raised its expectations for the year ahead. This company is not among the FTSE 100's most prominent players.