UK’s FTSE 100 slips on utilities losses; indexes set for weekly gains

(Reuters) – The UK’s benchmark FTSE 100 edged lower on Friday, pressured by losses in defence stocks and utilities, while Direct Line jumped after Aviva agreed to buy the insurer.

The blue-chip FTSE 100 was down 0.1%, while the midcap FTSE 250 was up 0.3% at 0945 GMT. Both indexes are on track to log weekly gains, with the benchmark set to notch a third straight week of gains.

Utilities led losses, declining 0.8%, while aerospace and defense stocks fell 0.7%.

Personal goods jumped 2.5% to lead the sectoral gains.

Direct Line jumped nearly 7.1% to lead gains on the midcap index after insurer Aviva agreed to buy smaller rival in a sweetened 3.61 billion pound ($4.60 billion) cash-and-stock deal that will create the UK’s largest home and motor insurer.

In contrast, AJ Bell was the biggest drag on the midcap index and fell 3.8% after Deutsche Bank cut the investment platform to “hold” from “buy.

Spirax Group fell 2.2% after JP Morgan analysts downgraded the valve maker to “neutral” rating from “overweight”.

Meanwhile, Britain’s property sector gathered more pace in November, with house prices rising by a faster-than-expected 1.3% in November from October to hit a record high.

Britain’s business and trade minister Jonathan Reynolds said in an interview the country will think very carefully about retaliating if Donald Trump’s incoming administration hits the country with fresh tariffs.

Domestic investors were unsettled after Trump proposed blanket tariffs of 10%-20% on virtually all imports, given the U.S. President-elect has already pledged big tariffs on Canada, Mexico and China.

The Bank of England policymaker Megan Greene said on Thursday it was unclear whether higher U.S. tariffs would raise or lower British inflation.

Across the Atlantic, investors keenly awaited the monthly payrolls data that could challenge or cement bets of a U.S. rate cut this month.

(Reporting by Nikhil Sharma; Editing by Janane Venkatraman)