By Siddarth S and Shashwat Chauhan
(Reuters) – UK’s FTSE 100 receded on Tuesday with heavyweight energy stocks falling on lower crude prices, while the pound gained steam after comments from Bank of England officials, further pressuring the exporter-heavy index.
The large-cap FTSE 100 fell 0.2%, while the mid-cap index slipped 1.4%.
Sterling rose 0.2%, hitting a 10-week high against the U.S. dollar intraday as Bank of England Governor Andrew Bailey reiterated that the central bank’s stance on interest rates did not need changing.
Rate-sensitive sectors like real estate and real estate investment trusts fell around 2% each.
Heavyweight energy stocks lost 1.0% tracking lower oil prices, as investors turned cautious ahead of an OPEC+ meeting this Sunday when the producer group may discuss deepening supply cuts.
Meanwhile, Britain borrowed less than predicted by its budget forecasters in the first seven months of the financial year, data showed, a day before finance minister Jeremy Hunt is expected to announce some pre-election tax cuts.
“Many investors may still be averse to rate cuts after last year’s mini-budget presented by the then-Chancellor of the Exchequer Kwasi Kwarteng (which) saw UK markets drop in free-fall after heavy tax cuts were announced,” said Daniela Sabin Hathorn, senior market analyst at Capital.com.
“The economic landscape has changed a lot in the past year, so it is unlikely that the announcement of tax cuts could cause the same level of fear in the market.”
Among individual stocks, Coca-Cola HBC AG added 4.2% after the bottler launched a share buyback programme late on Monday.
Workspace Group fell 7.2% after the London-focused flexible office-space provider posted a half-year loss.
IT services and consulting firm Softcat dropped 4.8% after J.P.Morgan downgraded the stock.
Cranswick rose 1.9% after the meat producer forecast annual profit at the upper end of current market estimates.
(Reporting by Siddarth S and Shashwat Chauhan in Bengaluru; Editing by Eileen Soreng, Shailesh Kuber and Mark Heinrich)
