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UK’s FTSE 100 ends flat as BOJ sparks rate worries, higher on the week


UK’s FTSE 100 ends flat as BOJ sparks rate worries, higher on the week By Reuters

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Published Jul 28, 2023 08:29
Updated Jul 28, 2023 17:50

© Reuters. FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville/File Photo

By Shubham Batra, Sruthi Shankar and Khushi Singh

(Reuters) – UK’s FTSE 100 ended Friday flat after a rally fizzled on worries of higher interest rates sparked by the Bank of Japan’s surprise tweak to its yield control policy, while AstraZeneca (NASDAQ:AZN) led gains in the pharmaceutical sector.

The index ended at 7,694.27 points, after clocking its highest level in nine weeks earlier in the session. It scored its third weekly gain in a row.

Pharma stocks jumped 1.8% after AstraZeneca climbed 3.3% as it beat quarterly profit expectations.

Rate-sensitive real estate stocks slipped 1.3% as the UK 10-year gilt yield rose to its highest since July 18 earlier in the session, after the BOJ move was perceived as a shift away from its years of ultra-loose monetary policy.

Investors now await the Bank of England’s decision on interest rates next week, with a hike by 25 bps widely anticipated.

The banking index was up 0.9% after major lenders reported results.

Standard Chartered (LON:STAN) Plc rose 4.0% after the Asia-focussed lender upgraded its annual profit forecast and set a new $1 billion share buyback.

Crisis-hit NatWest (LON:NWG) added 2.3% after posting forecast-beating first-half profit as it reels from the abrupt departure of CEO Alison Rose over a public spat with former Brexit party leader Nigel Farage.

“While bad debts remain under control for now, the pressures on UK households are acute and this remains an issue which could flare-up for NatWest and the other banks,” shared Russ Mould, investment director at AJ Bell in a note.

British Airways (LON:ICAG) operator IAG was the biggest gainer on the FTSE 100 index, up 6.6% as its quarterly profit beat analyst forecasts by 40%.

The midcap FTSE 250 index, snapped three straight days of gains to fall 0.8%.

Vanquis Banking Group was the top loser on the index, down 29.2%, tumbling to an over three-year low after a half-year loss, compared to a profit last year.

UK’s FTSE 100 ends flat as BOJ sparks rate worries, higher on the week

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