London shares fall on rate hike worries; leadership in focus

Antofagasta

Tue 17:24

Mining sector leads declines; FTSE midcap at June 11 level 
Services sector contracts at fastest pace since January 2023
Bunzl up after lifting 2026 sales outlook 
Investors keen to know more about Burnham's fiscal policy plans
Updates after markets close

    June 23 (Reuters) - London's blue-chip FTSE 100 ended slightly lower, while the mid-cap index hit a more than one-week low on Tuesday, tracking weakness in global markets as prospects of interest rate hikes dampened risk-taking, while investors remained keen on finding out who would be Britain's next leader.
The blue-chip FTSE 100 index .FTSE closed 0.1% lower, briefly hitting its lowest since June 12, while the midcap FTSE 250 .FTMC fell 1.2% to its lowest since June 11.

        Heavyweight precious .FTNMX551030 and industrial metal miners .FTNMX551020 fell 4% each and led sectoral declines, with Antofagasta ANTO.L down 5.5% and Fresnillo FRES.L declining 5.2% as prices of gold, silver and copper slid. 
      

        Under new U.S. Federal Reserve chair Kevin Warsh, traders are increasingly betting on a second interest rate hike by the U.S. Fed by December, according to LSEG data, compared to expectations of just one 25-basis-point hike two weeks ago.
      

        Sectors perceived to fare better in times of economic uncertainty outperformed, with pharmaceuticals .FTNMX201030, consumer staples .FTUB4510 and beverages .FTNMX451010 climbing between 1.7% and 2.2%. 

        Local politics also remained in focus after Prime Minister Keir Starmer's resignation on Monday. His rival Andy Burnham is largely expected to succeed, after another leading contender, former health minister Wes Streeting, said he would endorse Burnham. 
Investors are keen to find out more about Burnham's plans for fiscal policy at a time when public debt has soared to nearly 100% of economic output. That increase in debt has complicated the work of six prime ministers before him.
Meanwhile, data showed that the services sector contracted in June at the fastest rate in nearly three-and-a-half years.
Among top movers, business supplies distributor Bunzl BNZL.L gained 5.6% after raising its annual revenue growth outlook following a strong first half, supported by robust demand in North America and some price hikes.
Telecom Plus TEP.L tanked 25.7% after announcing that its five-year investment plan would slash near-term profits as the UK utility group responds to intensifying competition.

 (Reporting by Johann M Cherian and Shashwat Chauhan in Bengaluru; Editing by Joyjeet Das and Gareth Jones)
 ((johann.mcherian@thomsonreuters.com;))