FTSE 100 Surges with Oil and Defensive Stocks Leading in a Key Policy Week
Market Overview and Key Drivers
Sept 14 (Reuters) - London's FTSE 100 index rose on Monday, as investors flocked to defensive sectors such as healthcare and consumer staples, with oil prices and bond yields resuming their advance in a week packed with central bank decisions.
The blue-chip FTSE 100 index rose 0.55% to 10,708.76 points by 0959 GMT. The midcap FTSE 250 slipped 0.4% to 23,878.45, its lowest intraday level in more than a month.
Oil and Energy Sector Performance
• Oil prices rose about 3%, after new strikes on Saudi Arabian infrastructure and Gulf shipping. Oil majors Shell and BP gained about 1.1% respectively, with energy stocks up 1.1%. [O/R]
• They outperformed peers last week, helping limit declines on the FTSE 100, which registered its biggest weekly fall in over a month.
Bond Yields and Defensive Sectors
• British government bond yields ground higher once again on Monday, hitting new multi-year highs across maturities.
• Investors flocked to sectors considered traditionally defensive. Pharma stocks rose 2.7%, with GSK rising 3.7% after it announced positive results for two lung cancer drugs - Jideytro and Ris-Rez.
• Consumer-facing personal care, drug and grocery and beverages sectors added 2.6% and 2.8% respectively.
Technology and AI Developments
• Meanwhile, CEOs of top AI labs including OpenAI and Anthropic called for slower development of the technology, hammering AI-linked stocks globally.
• Futures tied to the tech-heavy U.S. Nasdaq slipped 1.8%. However, the FTSE 350 tech sector was up 3.9%.
Metals and Mining Sector
• Industrial and precious metal miners were the biggest percentage losers as metal prices slid. [GOL] [MET/L]
Upcoming Economic Events
• This week, investors will watch employment and inflation reports in the UK, ahead of the Bank of England's interest rate decision, where it widely expected to hold rates.
• The U.S. Federal Reserve will announce its decision on Wednesday, with markets pricing in a 88.5% chance of a 25-basis-point hike, per CME's FedWatch Tool.
• Prime Minister Andy Burnham is set to meet executives from banks, oil majors, and a telecom firm, to discuss his economic growth plans on Monday.
Notable Movers
• GlobalData bottomed the FTSE 250 with a 22% slide. The data analytics and consulting company expects its annual revenue growth to be more muted than expected.
(Reporting by Anand Gopal and Purvi Agarwal in Bengaluru; Editing by Leroy Leo)
