Defensive, industrial stocks boost FTSE 100 as economy runs hot

0
79
imageStock Markets11 hours ago (Jun 16, 2021 17:10)

© Reuters. FILE PHOTO: A sign displays the crest and name of the London Stock Exchange in London, Britain August 15, 2017. REUTERS/Neil Hall/File photo

By Amal S

(Reuters) – London’s FTSE 100 ended higher on Wednesday, helped by gains in industrial and defensive stocks, while data showed inflation jumped past the central bank’s target as Britain emerges from a third national lockdown.

After touching its highest level since February 2020 at 7,217.5, the blue-chip index end 0.2% higher at 7,184.95. Industrials, travel and pharmaceuticals provided the biggest boost to the index.

The domestically focused mid-cap FTSE 250 index fell 0.1%.

British inflation unexpectedly jumped above the Bank of England’s 2% target in May when it hit 2.1%, driven in large part by the comparison with prices in May 2020 when the country was in its first tight coronavirus lockdown.

“Everyone knows that pricing pressures are going to get a lot hotter and higher and there’s this nervousness that we could see persistent inflation which is not what the Fed has been saying. So investors are trimming their bets until they get a better clarity,” said Edward Moya, senior analyst at Oanda.

Global equity markets were under pressure, with investors wary ahead of the U.S. Federal Reserve’s policy statement at 1800 GMT, where the central bank is expected to at least signal a start of the debate on when to begin shifting monetary policy.

“There’s a lot of nervousness that we might have the hawkish Fed and that is really making a lot of investors just stay on the sidelines,” Moya added.

The FTSE 100 and the FTSE 250 have oscillated in a narrow range since mid-April on worries that a COVID-19 resurgence might crimp the recovery, while rapid economic growth could lead to higher inflation and prompt central banks to pare their support.

Energy stocks were the biggest drag on the index, with oil majors BP (LON:BP) and Royal Dutch Shell (LON:RDSa) falling 1.1% and 0.7% respectively.

Gateley fell 2.8% after the legal and professional services group reported a cyber security breach from a known external source.

Online furniture retailer Made.com fell 1.5% in its market debut.

Defensive, industrial stocks boost FTSE 100 as economy runs hot

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

LEAVE A REPLY

Please enter your comment!
Please enter your name here