FTSE 100 slips as banks weigh; defensive stocks limit decline

FTSE 100 Slips as Banking Losses Outweigh Gains in Defensive Sectors

Market Overview and Key Sector Movements

Oct 20 (Reuters) - The FTSE 100 declined on Tuesday, with banks dragging the most, as elevated oil prices continued to weigh even as gains in defensive sectors helped cushion the fall. 

The blue-chip FTSE 100 index fell 0.8% to 10,680.25 points by 1006 GMT. The midcap FTSE 250 lost 1% and was on track for its biggest one-day fall in nearly two weeks.

Banking and Financial Sector Performance

• Banks fell nearly 2% to an over four-month low. Heavyweight lenders HSBC, Lloyds and NatWest fell between 1.6% and 2.3%

Industrial and Corporate Movers

• Industrial stocks lost 1.8%, with Diploma and Rolls-Royce down 3.3% and 1.7% respectively

• Bunzl slipped 2.2% despite reporting a 3.7% rise in third-quarter revenue and maintaining annual forecasts

Commodities and Defensive Sectors

• Oil prices advanced with Brent reaching a five-month high of $111.05 a barrel [O/R]

• Investors flocked to sectors considered traditionally defensive, with healthcare up 0.5%. The personal care, drug and grocery sector added 0.3%

Economic Data and Policy Developments

• Data showed a modest rise in the pace of pay growth for British workers and hints of a small recovery in the jobs market, which could bolster the case for a Bank of England interest rate hike next month, pressuring rate-sensitive midcaps

• The Times reported that Finance Minister John Healey rejected calls to raise capital gains tax ahead of his October 28 budget, amid concerns that higher taxes could prompt wealthy individuals to leave Britain or delay asset sales

Other Notable Stock Moves

• Miner Anglo American dipped 1.6% after maintaining its 2026 copper production guidance despite a 5% drop in third-quarter copper output

• Technology and online grocery firm Ocado rose 6.6% to top the FTSE 250 after J.P. Morgan raised its price target on the stock to 460 pence from 290 pence

Looking Ahead

• Investors will watch for UK inflation and retail sales figures this week, while markets enter another corporate earnings season

(Reporting by Darshan Kumar in Bengaluru; Editing by Harikrishnan Nair)