LONDON: Britain’s blue-chip stocks had their best week in six months, as investors flocking to defensive sectors offset a rout in AI-linked stocks, while finance minister John Healey’s reassurances on fiscal discipline also helped risk appetite.
The export-heavy FTSE 100 closed 0.38 percent higher at 10,881.90 points, logging a weekly gain of 3.1 percent, the biggest since early April, while the midcap FTSE 250 gained 0.45 percent.
UK’s large-cap ETFs attracted USD3.38 billion in estimated net inflows year to date, already the biggest annual total since 2020, data from Morningstar showed.
“Flows into passive funds typically follow performance, but they also reflect investors looking to diversify away from US mega-cap technology and broaden their equity exposure,” said Michael Born, an analyst at Morningstar.
Consumer staples supported gains. Cigarette maker British American Tobacco rose 2.1 percent, while Johnnie Walker owner Diageo gained 1.9 percent
The beverages and medical equipment and services sectors advanced 7.8 percent and 6.9 percent, respectively, in the week.
Homebuilders jumped over 6 percent in the week after Healey reaffirmed his commitment to fiscal discipline on Thursday.
Banks were muted on Friday, recovering from early losses triggered by a report that Healey was likely to tax the lenders in the budget
Bank of England Governor Andrew Bailey said signs of second-round inflation were limited ahead of next week’s inflation data.
Traders are pricing in four BoE rate hikes over the next 12 months, according to LSEG data.
Defence stocks extended a strong run on the day: BAE Systems and Babcock International rose 2.6 percent and 3.6 percent, respectively.
THG had its best week in six months, surging 30 percent after the e-commerce firm raised its annual adjusted core profit forecast on Thursday.
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