London mid-caps set for weekly losses on bond jitters; Experian slides

London Mid-Caps Post Largest Weekly Fall in Three Months Amid Bond Jitters

Market Overview and Key Developments

Sept 4 (Reuters) - London's mid-cap stocks logged their biggest weekly fall in three months on Friday, pressured by concerns over soaring government debt and inflation, while Experian slid after the U.S. housing regulator criticised the sector's practices.     

The FTSE 100 index closed flat at 10,831.09 points, while the FTSE 250 ended up 0.36% and trimmed some of its weekly losses. 

Major Stock Movements

Experian and Credit Reporting Agencies

• Experian shed 4.4% after U.S. Director of Federal Housing, Bill Pulte, accused credit reporting agencies –Equifax, Experian, and TransUnion – of overcharging Americans for "far too long" and directed the mortgage finance giants Fannie Mae and Freddie Mac to approve all lenders to use the credit scoring system VantageScore.

Mid-Cap Pressure and Bond Market Reactions

• Mid-cap stocks have been under pressure this week as escalating tensions in the Middle East sparked a global bond selloff, as investors fretted about inflation in the face of elevated government debt.

• Benchmark 10-year gilt yield hit its highest since August 2007 earlier this week, while investors expected interest rates to rise by at least 27 basis points before year-end, LSEG data showed.

Economic and Policy Insights

Bank of England and UK Public Finances

• Bank of England Governor Andrew Bailey said that weak productivity and shocks such as COVID-19 had contributed to rising public debt across advanced economies. The new Andy Burnham-led government is expected to unveil its budget in October.

Analyst Commentary

• "It just highlights a very tight situation that the UK government is going to find itself in as far as public finances are concerned as we get closer to the budget," Fiona Cincotta, senior markets analyst at City Index said.

Global Economic Factors

• Across the Atlantic, expectations for the U.S. Federal Reserve to raise interest rates strengthened after data showed U.S. job growth accelerated in August.

• Investors were also closely watching developments in the Middle East, with Brent crude hovering near $95 a barrel. [O/R]

Other Notable Movers

Vodafone

• Telecoms firm Vodafone climbed 2.7% after Goldman Sachs upgraded the stock to 'buy' from 'sell'.

Oxford Nanopore Technologies

• Oxford Nanopore Technologies slid 6.9% after healthcare investor Novo Holdings sold 49 million shares of the biotech firm for £74 million ($100.07 million).

Additional Information

($1 = 0.7395 pounds)

(Reporting by Anand Gopal and Johann M Cherian in Bengaluru; Editing by Eileen Soreng and Shailesh Kuber)