London's FTSE 100 recovers after a four-day decline; inflation data increases rate-cut bets
The FTSE 100 in London was little changed Wednesday after four sessions of falling prices. Gains in consumer staples and healthcare kept the market afloat while a slower inflation rate raised hopes for a rate cut in December.
As of 12:40 GMT the blue-chip index had fallen 0.07%, while the midcap FTSE 250 was up 0.07%.
The UK's inflation rate slowed for the first month since May. This is good news for the government ahead of the annual budget next week and increases the chances of a Bank of England rate cut.
The markets are pricing about 86% of the odds that a quarter point reduction will occur in December.
Matthew Ryan, Head of Market Strategy for global financial services company Ebury, said that a December rate reduction seemed to be a safe bet.
A poll revealed that a majority now expects a rate reduction in December, and then again early next year.
Unilever, British American Tobacco and other consumer-related stocks contributed to the FTSE 100’s rise. Both gained about 1%.
AstraZeneca, the world's largest pharmaceutical company, was up by 0.8%. The broader sector of pharma also advanced by 0.5%.
The industrial metals miners rose 0.3% while the precious metal miners grew 4.7% as gold prices increased over 1% ahead of important U.S. economic data.
The UK banking sector saw a 0.4% drop in its stocks, putting it on course for a fifth straight session of decline.
BAE Systems, Rolls-Royce and other aerospace and defence stocks fell by 2%.
The construction and household goods sectors fell by 0.7%. The government's data showed that the house price increase in September was the lowest since May.
WH Smith was the biggest individual mover, gaining 5.2%, after the travel retailer announced that Carl Cowling, its CEO, had resigned following an independent review which found accounting errors in the U.S. operation.
Sage's share price rose 3.3% following the company's better-than expected annual operating profit. (Reporting and editing by Shreya Biwas; Additional reporting by Rashika Sing; Reporting by Utkarsh T. Hathi)
(source: Reuters)
