Personal goods stocks lifts FTSE 100; Frasers slumps

(Reuters) -Britain’s FTSE 100 index was barely changed on Thursday, as gains in the personal goods sector were limited by losses in real estate, while Frasers dropped to a more than two-year low after lowering its annual profit forecast.

The blue-chip FTSE 100 was up 0.2%, while the midcap FTSE 250 was flat.

The personal goods sector gained 3.3%, led by Watches of Switzerland which climbed 14.2% to a more than ten-month high to top the midcap index after reaffirming its 2025 guidance.

Frasers dropped 10.6% to the bottom of the FTSE 100. The retailer said it felt “kicked in the face” by the government’s tax hiking budget, blaming it for a drop in consumer confidence that forced a cut to annual profit guidance.

Many businesses have complained that the government’s move to hike social security contributions and the minimum wage will lead to higher costs, lower investment and ultimately weaker economic growth.

More than half of British employers plan to raise their prices and cut jobs in response to the budget, as per a BoE survey.

REITs and real estate <.FTUB3510> led sectoral losses, falling 1.9% and 1.6% respectively, as British Land declined 4.9% after Berenberg cut its target price on the commercial property firm to 480p from 500p.

The energy sector was also down at 1.4%.

Shell and Norway’s Equinor said they will merge their British North Sea assets to form what is set to be the ageing basin’s largest oil and gas company. Shell shares fell 1.4%.

Construction & materials was down 0.5% after an industry survey showed weaker residential house-building in November.

On the political front, French Prime Minister Michel Barnier resigned a day after opposition lawmakers voted to topple his government, plunging the euro zone’s second-largest economy deeper into political crisis.

France’s benchmark CAC 40 index was up 0.4%.

Across the Atlantic, Federal Reserve Chair Jerome Powell on Wednesday said the U.S. economy was in good shape and appeared to signal his support for a slower pace of interest-rate cuts ahead.

(Reporting by Nikhil Sharma and Sukriti Gupta; Editing by Varun H K)