UK's FTSE 100 closes at seven-week high on fiscal reassurance, defensive buying

By Reuters News

By Darshan Kumar R

Oct 15 (Reuters) - London's blue-chip stocks closed at a seven-week high on Thursday after the finance minister reaffirmed the government's commitment to fiscal discipline, while a shift into defensive sectors amid a deepening global selloff in AI-related stocks also supported the benchmark.

The benchmark FTSE 100 index .FTSE closed higher by 1.1% to 10,840.35 points, its highest since August 26, while the midcap FTSE 250 .FTMC also rose 0.26%.

  • Investors sought refuge in defensive sectors as a global chip stocks selloff intensified, benefiting UK's large caps with limited exposure to AI

  • "It's a rotation towards long-term; almost an infrastructure play without the risk of a rate increase and healthcare, consumer cyclicals are a safer heaven as they are not overly leveraged," said Nick Saunders, CEO of Webull UK

  • Drugmakers AstraZeneca AZN.L and GSK GSK.L climbed 3.2% and 2.9%, respectively

  • Dove soap maker Unilever ULVR.L rose 1.8% and cigarette maker British American Tobacco BATS.L advanced 2.5%

  • British finance minister John Healey said this month's budget would aim at bolstering economic resilience, adding that he and Prime Minister Andy Burnham were aligned on maintaining fiscal discipline

  • Financials .FTNMX301010, including heavily weighted banks, was up 0.3%

  • UK's gross domestic product rose 0.1% in August, boosted by AI optimism, against expectations of a 0.1% drop

  • Bank of England Chief Economist Huw Pill said that any future interest rate increase should not be interpreted by investors as the start of a prolonged series of rate hikes

  • Economists polled by Reuters expect the BoE to raise rates to 4% in November

  • Industrial metal miners .FTNMX551020 were down 1.4%, on weaker copper prices

  • Antofagasta ANTO.L fell 4.1%, after the Chilean miner's third-quarter copper production declined year-on-year

  • E-commerce group THG THG.L surged 16.3% after lifting its annual profit forecast

  • Paper and packaging firm Mondi MNDI.L slumped 7.9% after hiking prices for several paper grades to offset higher energy costs

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