FTSE 100 Steady as Energy Offsets Bank Losses; Burnham Set for PM
Market Overview and Key Drivers
July 17 (Reuters) - London's FTSE 100 was little changed on Friday as gains in energy stocks, driven by higher oil prices amid escalating Middle East tensions, offset weakness in financial shares, with Andy Burnham set to become Britain's next prime minister.
The blue-chip FTSE 100 index rose 0.04% to 10,576.97 by 1043 GMT, while the midcap FTSE 250 slipped 0.4%.
Geopolitical Tensions and Energy Sector Impact
• The United States escalated its renewed bombing campaign on Iran by hitting bridges and an airport, and Tehran responded with strikes on U.S. bases across the Middle East.
Oil Prices and Supply Concerns
• Energy stocks gained 1.7% as oil prices edged higher on concerns over supply disruptions after the United States and Iran stepped up attacks across the Gulf, fuelling fears over exports through the Strait of Hormuz and the Red Sea. [O/R]
Utilities Sector Performance
• Utilities, rose 2%, leading sectoral gains.
Financials and Consumer Goods Under Pressure
Banking Sector Declines
• On the flip side, banks fell, pressuring the index, with Barclays, Lloyds Banking Group and Standard Chartered down between 1% and 1.6%.
Personal Goods and Retail Impact
• Personal goods also fell 4.3% after Burberry warned that the conflict in the Middle East was hurting tourist spending in Europe, sending shares in the British luxury brand down more than 5.6% despite strong sales growth in the United States and China during the April-June quarter.
Political Developments
Andy Burnham Set to Become Prime Minister
• On the political front, Andy Burnham, nicknamed the 'King of the North', will become leader of Britain's governing Labour Party, the final step before becoming its seventh prime minister in a decade on a pledge to thwart the rise of the populist Reform UK.
Individual Stock Movers
Healthcare Sector
• Among other stocks, GSK fell 3.8% after the drugmaker said it would halt development of its experimental treatment for refractory chronic cough after the therapy failed a late-stage trial and missed key efficacy goals across multiple dosages.
Energy Investments in Iraq
BP and ConocoPhillips Announcements
• BP and ConocoPhillips rose 1% and 1.2%, respectively, after CNBC reported that the energy companies are set to announce billions of dollars in new investments in Iraq as Washington seeks to strengthen the country's energy sector and reduce reliance on export routes vulnerable to disruption from regional conflict.
(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Shinjini Ganguli)
