London's FTSE 100 steadies after four-day slide; inflation data boosts rate cut bets
London's FTSE 100 steadied after a four-day decline, buoyed by gains in healthcare and consumer staples. UK inflation eased to 3.6% in October, boosting hopes for a December rate cut. Consumer stocks like Unilever and British American Tobacco rose, while AstraZeneca and pharma sectors advanced. Precious metal miners surged as gold prices increased. WH Smith gained after CEO exit, and Sage shares rose on strong profit results.
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FTSE 100, FTSE 250 nearly flat
UK consumer price inflation eases to 3.6% in October
WH Smith gains after CEO exits
Nov 19 (Reuters) - London’s FTSE 100 was little changed on Wednesday, after falling for four consecutive sessions, as gains in healthcare and consumer staples kept the market afloat, while a slowdown in inflation lifted hopes for a December rate cut.
The blue-chip index (.FTSE) was down 0.07% as of 12:40 GMT, while the mid-cap FTSE 250 index (.FTMC) was up 0.07%.
UK inflation slowed down for the first time in October since May, offering relief to the government before next week’s annual budget and boosting the chance of a rate cut by the Bank of England.
Markets are pricing in about 86% odds of a quarter-point reduction in December.
“MPC officials will, of course, still be glued to the details of next week’s Autumn Budget, but assuming it’s as tax-heavy and unfriendly to growth as we expect, a December rate cut seems to be a fairly safe bet,” said Matthew Ryan, head of Market Strategy at global financial services firm Ebury.
Supporting this outlook, a Reuters poll showed a majority of economists now expect a rate cut in December and again early next year.
Consumer-related stocks such as Unilever (ULVR.L) and British American Tobacco (BATS.L) contributed to FTSE 100’s rise, with both gaining about 1%.
Heavyweight AstraZeneca (AZN.L) was up 0.8% and the broader pharma sector (.FTNMX404010) advanced 0.5%.
Industrial metal miners (.FTNMX551020) were up 0.3%, while precious metal miners (.FTNMX551030) gained 4.7% after gold prices climbed over 1% on risk aversion ahead of key U.S. data. (GOL/)
In UK markets, banking stocks (.FTNMX301010) dropped 0.4%, on track for a fifth consecutive session of decline.
Aerospace and defence stocks (.FTNMX502010) were down 2% with BAE Systems (BAES.L) and Rolls-Royce (RR.L) falling 2.6% and 0.8%, respectively.
Household goods and construction sector (.FTNMX402020) fell 0.7%. Data from the government showed that house prices had the smallest annual rise in September since May.
Among individual movers, WH Smith (SMWH.L) gained 5.2% after the travel retailer said Carl Cowling had stepped down as CEO following an independent review, which revealed accounting failures in the U.S. operations.
Sage’s (SGE.L) shares climbed 3.3% after the software company reported better-than-expected annual operating profit.
