Defensive, industrial stocks boost FTSE 100 as economy runs hot

  • 6/16/2021
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June 16 (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 (.FTSE) end 0.2% higher at 7,184.95. Industrials (.FTNMX502050), travel (.FTNMX303010) and pharmaceuticals (.FTNMX201030) provided the biggest boost to the index. The domestically focused mid-cap FTSE 250 index (.FTMC) 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. read more "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. read more "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 (.FTNMX601010) were the biggest drag on the index, with oil majors BP (BP.L) and Royal Dutch Shell (RDSa.L) falling 1.1% and 0.7% respectively. Gateley (GTLY.L) fell 2.8% after the legal and professional services group reported a cyber security breach from a known external source. read more Online furniture retailer Made.com (MADE.L) fell 1.5% in its market debut. read more Reporting by Devik Jain in Bengaluru; Editing by Subhranshu Sahu Our Standards: The Thomson Reuters Trust Principles.

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