FTSE 100 Holds Firm as Energy and Healthcare Stocks Offset Market Jitters
Market Overview and Key Drivers
Aug 18 (Reuters) - The UK's FTSE 100 steadied on Tuesday after six straight sessions of declines as a rise in healthcare and energy stocks offset broader market jitters about renewed inflationary pressures.
The blue-chip FTSE 100 index rose 0.1% at 10,728.04 points, having touched a three-week closing low on Monday. The midcap FTSE 250 slipped 0.6% to 24,561.43 points.
Global Economic Influences
Rising Borrowing Costs and Oil Prices
• Long-term borrowing costs from the United States to Japan and Germany rose to their highest levels in decades as oil prices climbed back above $90 a barrel, fanning inflation worries as U.S.-Iran peace hopes faded. [O/R]
Impact on Energy Stocks
• Oil and gas producers Shell and BP rose 1.8% and 2.7%, respectively, helped by higher crude prices.
Geopolitical Developments
• U.S. President Donald Trump said no talks were taking place with Iran and none were scheduled. He said the Strait of Hormuz was open, contradicting an earlier Iranian assertion that the critical waterway remained shut to shipping.
UK Economic Data
Labour Market Trends
• Britain's labour market cooled further in the second quarter, marked by slowing earnings growth in the private sector and the smallest number of vacancies in more than five years, official data showed.
Inflation and Consumer Impact
• Separately, grocery price inflation eased to its lowest level since October 2024 in August, market researcher Worldpanel by Numerator said, offering more respite to households grappling with elevated living costs.
Bank of England Policy Outlook
• The data is likely to keep the Bank of England from raising interest rates for now, though the central bank has said it may take until year-end to judge whether higher energy prices from the Iran war are feeding into pay settlements. Traders are pricing in at least one 25-basis-point rate hike from the BoE by the end of this year.
Sector Performance
Healthcare Stocks
• Healthcare stocks, seen as a defensive play during times of economic uncertainty, rose. AstraZeneca added 2.1% and GSK climbed 2%.
Midcap Movers
• Japan-focused investment trusts JPMorgan Japanese and Baillie Gifford Japan Trust dropped 3.7% and 2.1%, respectively, among the top decliners in the midcap index after Japan's benchmark bond yield climbed to a three-decade high.
• IT software provider Kainos Group rose 22% after its fiscal 2027 earnings forecast beat market expectations.
Reporting Credits
(Anand Gopal and Medha Singh in Bengaluru; Editing by Emelia Sithole-Matarise, Rod Nickel)