UK's FTSE 100 defies global sell-off on healthcare gains and pound weakness

(Reuters) -London's FTSE 100 closed slightly higher on Tuesday, bucking the downward trend seen across global markets as healthcare gains and sterling weakness provided crucial support.

The blue-chip index finished 0.1% higher, weathering the storm that swept through European and U.S. markets.

In contrast, the midcap index fell 0.5% and extended its losing streak to seven consecutive sessions.

Metal miners faced pressure as a strengthening dollar pushed gold and copper prices lower, with both precious and industrial mining sectors retreating over 1.7%.

Financial stocks also struggled, with insurers and investment-banking shares falling 1.3% and 0.3%, respectively.

The aerospace and defence sector declined 1.2%, with engineering firm Senior falling 2.9%.

The gloomy sentiment was widespread across markets, with Germany and France posting losses. The pan-European STOXX 600 dropped to its lowest level since mid-October and U.S. stock indexes also traded lower.

In the UK, the heavyweight healthcare sector's 1.3% gains helped offset weakness in other areas.

A weaker pound provided additional support for the main index after Chancellor Rachel Reeves warned of "hard choices" ahead in an unusual speech just three weeks before delivering her second annual budget. UK government bond yields also declined in response.

"Her speech was as much about managing expectations as setting direction," said Nigel Green, CEO of deVere Group.

Energy stocks advanced 0.3%, boosted by Diversified Energy's 8.1% gains after it hiked annual profit forecast. Oil major BP rose 1.3% after reporting a smaller-than-expected decline in third-quarter underlying profit.

Looking ahead, the Bank of England is expected to maintain interest rates at their current level on Thursday, though recent softer inflation and wage data could strengthen the case for a future cut.

Among individual movers, Associated British Foods fell 3% after announcing it might separate its Primark fashion retail business from its food operations. The company also reported a 13% drop in full-year profit.

(Reporting by Shashwat Chauhan, Utkarsh Tushar Hathi and Ragini Mathur in Bengaluru; Editing by Shailesh Kuber and Tomasz Janowski)