UK's FTSE 100 hits near one-month high after Healey backs fiscal discipline

UK's FTSE 100 Surges to One-Month High After Government Fiscal Commitment

Market Reaction and Key Drivers

Oct 15 (Reuters) - London's blue-chip stocks climbed to a near one-month high on Thursday, led by financials, after the Finance Minister reaffirmed the government's commitment to fiscal discipline, while stronger-than-expected GDP data also buoyed sentiment.

The benchmark FTSE 100 index rose 0.54% to 10,782.98 points by 09:50 GMT, its highest since September 18, while the midcap FTSE 250 edged 0.07% lower.

Government Fiscal Policy and Economic Data

• British finance minister John Healey said this month's budget would aim at bolstering economic resilience, adding that he and Prime Minister Andy Burnham were aligned on maintaining fiscal discipline

• UK's benchmark 10-year bond yield declined further following Healey's comments to 5.34%

• UK's gross domestic product rose 0.1% in August, boosted by AI optimism, against expectations of a 0.1% drop

Bank of England and Interest Rate Outlook

• Bank of England Chief Economist Huw Pill said that any future interest rate increase should not be interpreted by investors as the start of a prolonged series of rate hikes

• Economists polled by Reuters expect the BoE to raise rates to 4% in November but narrowly expect to hold from there

Sector Performance

Financials and Consumer Staples

• Heavily weighted banks advanced, with NatWest Group rising 2.3% and Standard Chartered up more than 1%

• Consumer staples firms also extended gains, with British American Tobacco rising the most, up 2.6%

Industrial Metals and Real Estate

• Limiting the gains were industrial metal miners, down 3.1%, on weaker copper prices over concerns of further US Federal Reserve rate hikes

• British Land rose 2.6% after the commercial property firm said it expects higher half-year profit on office and retail park demand

• Antofagasta fell 5.8%, after the Chilean miner's third-quarter copper production declined year-on-year

Midcap Movers

E-commerce and Office Space Providers

THG and Workspace Developments

• Among midcaps, e-commerce group THG surged 18% after lifting annual profit forecast

• Flexible office-space provider Workspace slipped 5.6% after reporting lower quarterly occupancy, with Jefferies downgrading the stock to "hold" from "buy" citing a tougher sales market

(Reporting by Darshan Kumar in Bengaluru; Editing by Vijay Kishore)