Inflation Slowdown Boosts FTSE 100 Gains


Britain’s FTSE 100 index was subdued on Friday as gains by companies in the energy sector offset losses in healthcare and mining stocks, although the index is on course for its best weekly performance in nearly four months on signs of slowing inflation.

The FTSE 100 index was flat at 7,640.77 points, while the more domestically focused mid-cap FTSE 250 index fell 0.3%.

The heavily export-heavy FTSE 100 index is up almost 3% since the start of the week, as data showing national inflation fell more than expected in June boosted sentiment.

The mid-value index is on track to post its best weekly performance since November.

However, official data on Friday showed UK retail sales rose more than expected in June, prompting caution over monetary policy expectations.

“For the economy, this (data) is welcome because robust domestic consumption will go a long way in helping the economy avoid sliding into recession,” said Stuart Cole, chief macroeconomist at Equiti Capital.

“But today’s figures will probably have been read with some trepidation within the Bank of England, as they suggest there is still work to be done in its efforts to rein in demand to bring inflation under control.”

Meanwhile, a survey by market research firm GfK showed UK consumers have become more pessimistic, ending a five-month streak of rising confidence levels.

Energy heavyweights rose 0.2% on higher crude prices.

Industrial metal miners slid 0.7% after rising nearly 3% in the previous session. Glencore fell 0.8% after the miner said its first-half copper output fell 10%.

Healthcare heavyweight AstraZeneca fell 0.3% after three sessions of gains.

Interest-rate-sensitive homebuilders were down 0.3% on the day, but the sector is on course to be the week’s best performer.

Real estate and real estate investment companies fell 0.7% and 0.8% respectively.

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