FTSE 100 Steady Before US Inflation Data; Balfour Beatty Hits Record High
Market Overview and Key Drivers
Aug 12 (Reuters) - London's FTSE 100 was largely flat on Wednesday, as investors remained on the sidelines ahead of U.S. inflation data, while midcap stocks outperformed as Balfour Beatty soared to a record high after raising its annual forecast.
The blue-chip FTSE 100 index edged up 0.04% to 10,848.75 points by 1014 GMT. The midcap FTSE 250 climbed 0.5% to 24,916.12 points, on track to close at a record high.
Global Market Sentiment
• Global stocks also held steady ahead of U.S. inflation data, which is expected to show consumer prices increased moderately in July, potentially reducing financial market expectations for the Federal Reserve to raise interest rates this year. The data is due at 1230 GMT.
Impact of US Economic Data
• A surprisingly weaker-than-expected U.S. jobs report last week tempered expectations around rate hikes this year, although simmering concerns about the Middle East war has left investors in doubt.
Commodities and Geopolitical Factors
• Brent crude futures dipped but held near $90 a barrel after the U.S. and Yemen's Iran-aligned Houthis reported separate attacks on shipping, as prospects for ending the Iran war appeared to dim. [O/R]
UK Economic Outlook
Upcoming GDP Data
• Investors are also waiting for the UK's GDP data on Thursday, which is expected to show economic growth stalled on a month-over-month basis in June following a 0.1% growth in May.
Government and Monetary Policy
Prime Minister's Statement
• Britain's new Prime Minister Andy Burnham said in an interview with the BBC that his government will do what it can to help lower costs for business, though he acknowledged a "difficult financial outlook". Traders are currently pricing in a 46% chance of a 25-basis-point rate hike by the Bank of England in December.
Stock Highlights
Balfour Beatty's Record Surge
• Helping lift midcap stocks, Balfour Beatty jumped 9.2% after the British construction group raised its annual operating profit forecast, citing strong demand for infrastructure projects in the United States and UK.
Mining Sector Performance
• Mining giants Anglo American and Rio Tinto gained more than 1% each as copper prices edged up after a temporary shutdown at a major Indonesian smelter added to the pressure on the global red metal's supply. [MET/L]
(Reporting by Anand Gopal and Sruthi Shankar in Bengaluru; Editing by Vijay Kishore)
