(Reuters) -London’s FTSE 100 was little changed on Wednesday, after falling for four consecutive sessions, as gains in healthcare and consumer staples kept the market afloat, while a slowdown in inflation lifted hopes for a December rate cut.
The blue-chip index was down 0.07% as of 12:40 GMT, while the mid-cap FTSE 250 index was up 0.07%.
UK inflation slowed down for the first time in October since May, offering relief to the government before next week’s annual budget and boosting the chance of a rate cut by the Bank of England.
Markets are pricing in about 86% odds of a quarter-point reduction in December.
“MPC officials will, of course, still be glued to the details of next week’s Autumn Budget, but assuming it’s as tax-heavy and unfriendly to growth as we expect, a December rate cut seems to be a fairly safe bet,” said Matthew Ryan, head of Market Strategy at global financial services firm Ebury.
Supporting this outlook, a Reuters poll showed a majority of economists now expect a rate cut in December and again early next year.
Consumer-related stocks such as Unilever and British American Tobacco contributed to FTSE 100’s rise, with both gaining about 1%.
Heavyweight AstraZeneca was up 0.8% and the broader pharma sector advanced 0.5%.
Industrial metal miners were up 0.3%, while precious metal miners gained 4.7% after gold prices climbed over 1% on risk aversion ahead of key U.S. data. [GOL/]
In UK markets, banking stocks dropped 0.4%, on track for a fifth consecutive session of decline.
Aerospace and defence stocks were down 2% with BAE Systems and Rolls-Royce falling 2.6% and 0.8%, respectively.
Household goods and construction sector fell 0.7%. Data from the government showed that house prices had the smallest annual rise in September since May.
Among individual movers, WH Smith gained 5.2% after the travel retailer said Carl Cowling had stepped down as CEO following an independent review, which revealed accounting failures in the U.S. operations.
Sage’s shares climbed 3.3% after the software company reported better-than-expected annual operating profit.
(Reporting by Utkarsh Tushar Hathi; Additional reporting by Rashika Singh; Editing by Shreya Biswas)
