Defensive stocks lift FTSE 100 at start of pivotal week for central banks

Defensive Stocks Drive FTSE 100 Higher Ahead of Central Bank Decisions

Market Overview and Key Drivers

Sept 14 (Reuters) - London's FTSE 100 rose on Monday as investors flocked to defensive sectors such as healthcare and consumer staples, while government bond yields resumed their advance in a week packed with central bank decisions.

The blue-chip FTSE 100 index closed up 0.4% at 10,697.57 points. The midcap FTSE 250 slipped 0.6% to 23,834.48 points, its lowest close in more than a month. 

Sector Performance and Market Movers

Energy and Oil Majors

• Oil prices rose about 3% after new strikes on Saudi Arabian infrastructure and Gulf shipping. Oil majors Shell and BP gained about 1% each. [O/R]

Defensive Sectors and Pharma Gains

• Investors flocked to defensive sectors considered more insulated from economic cycles. Pharma stocks rose 3.8%, with GSK gaining 4.7% after it announced positive results for two lung cancer drugs: Jideytro and Ris-Rez.

• Consumer-facing personal care, drug and grocery and beverages added 2.8% and 2.6%, respectively.

Government Bonds and Financials

• British government bond yields ground higher once again on Monday, hitting new multi-year highs across maturities.

• Heavyweight banks and rate-sensitive homebuilders shed 1.4% and 2.2%, respectively.

Technology and AI Developments

AI Sector Impact

• Meanwhile, CEOs of top AI labs including OpenAI and Anthropic called for slower development of the technology, leading to declines in AI-linked stocks globally.

Tech Indices Performance

• The tech-heavy U.S. Nasdaq slipped 0.5%. However, the FTSE 350 tech sector was up 4.3%.

Central Bank Decisions and Economic Outlook

Upcoming Reports and Rate Decisions

• Investors will watch employment and inflation reports in the UK ahead of the Bank of England's interest rate decision on Thursday, when it is widely expected to hold rates.

• The U.S. Federal Reserve will announce its decision on Wednesday, with markets pricing in a 90% chance of a 25-basis-point hike, according to CME's FedWatch Tool.

Government and Corporate Meetings

• UK's Prime Minister Andy Burnham is set to meet executives from banks, oil majors, and a telecom firm, to discuss his economic growth plans.

Midcap Movers

GlobalData Revenue Forecast

• Among mid-cap stocks, GlobalData slid nearly 19% to the bottom of the FTSE 250 after the data analytics and consulting company's annual revenue growth forecast disappointed investors.

Reporting Credits

(Reporting by Anand Gopal and Purvi Agarwal in Bengaluru; Editing by Leroy Leo and Jonathan Ananda)