Ftse 100 Hits 8: week high on slowing wage growth, but construction sector drags (updated)

Icosavax

12/12/2023 09:28

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        * 
      Rolls-Royce soars on Fitch upgrade
    

        * 
      Construction and materials shares drop
    

        * 
      US consumer prices unexpectedly rise in November
    

        * 
      FTSE 100 flat, FTSE 250 off 0.5%
    

  
 (Updated at 1650 GMT)
    By Shashwat Chauhan and Shubham  Batra
       Dec 12 (Reuters) - Britain's FTSE 100 closed flat on
Tuesday as gains in aerospace and defence stocks were offset by
losses in construction and materials, while soft domestic wages
data fuelled optimism that Bank of England would keep interest
rates unchanged this week.
    The blue-chip FTSE 100  .FTSE  hit a eight-week high during
the session but closed flat for the day, while the
domestically-focussed FTSE 250 index  .FTMC  fell 0.5%.
    Aerospace and defence stocks  .FTNMX502010  hit a record
high, climbing 1.4%, led by 2.6% rise in shares of Rolls-Royce
 RR.L  after ratings agency Fitch upgraded its credit rating to
BB+.  
    "In February, Rolls-Royce said that a return to investment
grade status would allow it to consider a return to resuming
shareholder payouts so today's move by Fitch is likely to be
well received," said Michael Hewson, chief market analyst at CMC
Markets UK.
    Leading losses, construction and materials shares
 .FTNMX501010  dropped 1.6%.
    Meanwhile, official data showed British wage growth slowed
more than expected in the three months to the end of October,
but pay is probably still increasing too quickly to persuade the
Bank of England to cut interest rates any time soon.
    Across the Atlantic, U.S. consumer prices unexpectedly rose
in November while underlying inflation pushed higher, offering
more evidence that the U.S. central bank was unlikely to pivot
to interest rate cuts early next year.
    The Federal Reserve, Bank of England and the European
Central Bank will announce their respective decisions during the
week, with all three expected to hold rates steady. 
    Among individual movers, telecoms firm BT Group  BT.L  lost
3.9% after UK's Ofcom proposed a ban on inflation-linked
mid-contract price rises.
        
    Hargreaves Lansdown
      HRGV.L  was the biggest loser on the London stock market,
falling 6.7% after market watchdog flagged concerns about the
interest and fees charged by some investment platforms.
    AstraZeneca  AZN.L  rose 0.8% after it agreed to buy
respiratory syncytial virus (RSV) vaccine developer Icosavax
 ICVX.O  in a deal valued at up to $1.1 billion.

 (Reporting by Shashwat Chauhan and Shubham Batra in Bengaluru;
Editing by Sonia Cheema, Dhanya Ann Thoppil and Alex Richardson)
 ((Shashwat.Chauhan@thomsonreuters.com;))
 
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