UK's FTSE 100 rises for a sixth straight quarter as Middle East optimism aids sentiment
FTSE 100 Performance and Market Drivers
June 30 (Reuters) - The UK's blue-chip FTSE 100 inched higher on Tuesday, led by gains in defence and financial stocks, notching gains for a sixth consecutive quarter as optimism surrounding a ceasefire in the Middle East lifted sentiment.
The internationally focused FTSE 100 index rose 0.1%, while the midcap FTSE 250 was flat. The blue-chip index gained in 11 of the last 12 months, with March being the only exception, as global markets roiled after the U.S. and Israel launched a war on Iran.
Quarterly and Monthly Index Movements
• The FTSE 250 posted its biggest quarterly rise in five quarters but a monthly loss as politics took centre stage after Keir Starmer resigned as prime minister.
Sector Performance
Banks and Financial Stocks
• Banks added 0.8% and were up 20% for the quarter. Lloyds and Natwest gained 2.1% and 1.6%, respectively.
Aerospace and Defence
• Aerospace and defence stocks rose 2.1% after Starmer unveiled an extra £15 billion ($20 billion) to modernise Britain's depleted armed forces. Rolls-Royce, BAE Systems, Melrose Industries and Babcock were up between 2% and 3.3%.
Mining Sector
• Industrial metal miners rose 1%, tracking metal prices, while precious metal miners lost 1.5%.
Economic and Business Outlook
Economic Growth
• Economic data showed that Britain's economy grew 0.6% in the first quarter, but households felt a squeeze before the price pressures of the Middle East conflict.
Business Confidence
• A Lloyds survey showed that UK businesses' confidence about the economic outlook fell this month as cost pressures and global uncertainty continued to hurt.
Industry-Specific Developments
Housebuilders and Construction
Class Action Lawsuit
• The UK's biggest housebuilders are facing a potential multi-billion-pound class action lawsuit over alleged anti-competitive conduct, according to a consumer claim. The home construction index lagged on the FTSE 100 with a 1.6% decline, while Persimmon, Barratt Redrow and Taylor Wimpey fell between 1% and 3%.
Supermarkets and Retail
• Among individual movers, supermarket group Sainsbury's rose 1.3% after first-quarter results but said it expects the Middle East conflict to add to food inflation.
Travel and Insurance
• British holiday and insurance group Saga shares gained 6.7% after first-half cruise bookings topped expectations.
Automotive Industry
• The UK car lobby group warned electric vehicle makers will have to pay £1.4 billion ($1.85 billion) in tariffs if there is no solution on local content requirements with the European Union. The automobiles index shed 2.3%.
(Reporting by Twesha Dikshit; Editing by Shinjini Ganguli, Alexandra Hudson)
