UK's FTSE 100 sees seventh straight day of losses, BoE comments lift midcaps

A man walks through the lobby of the London Stock Exchange. — Reuters pic
A man walks through the lobby of the London Stock Exchange. — Reuters pic

LONDON, July 13 ― London's FTSE 100 saw its seventh day in the red yesterday, its longest losing streak since 2015, led lower by losses in pharmaceuticals after the US White House scrapped a rebate rule, while the midcap bourse jumped on prospects of lower interest rates.

The UK's blue-chip index edged 0.1 per cent lower after trading in positive territory for most of the session as its more internationally-exposed constituents such as miners climbed on hopes of an interest rate cut by the US Federal Reserve.

The mid-cap FTSE 250, however, saw a 0.6 per cent rise as a Bank of England official said that the BoE might need to cut interest rates almost to zero after a no-deal Brexit.

The BoE comments helped cap losses on the main index as well with blue-chip housebuilders Persimmon and Barratt rising on rate cut hopes.

Pharmaceutical heavyweights AstraZeneca and GlaxoSmithKline were among the biggest drags on the main index, tracking shares in their US peers after the Trump administration pulled the rebate rule.

Exporter stocks such as spirits company Diageo also weakened along with the dollar, which has been pressured by growing bets that the Fed would cut interest rates at a policy meeting later this month.

Among small caps, Thomas Cook plummeted nearly 60 per cent to an all-time low after it proposed a bailout that would hand control of its packaged-tour business to largest shareholder Fosun Tourism and would significantly dilute stakes of existing shareholders.

The world's oldest tour operator has been battling fading demand for packaged holidays and high debt, and traders said shares were being hammered as investors had been hoping Fosun would buy out the entire company. analyst Neil Wilson said several questions about how the refinancing deal would impact a proposed sale of the airline business also remained.

Hiscox ended the day with a 2.1 per cent drop, after having fallen as much as 6 per cent after the insurer warned of continued deterioration in the market.

Among big risers on the midcap index was cybersecurity firm Sophos Group, which jumped 5.4 per cent after reporting higher first-quarter adjusted earnings and revenue on subscription growth.

Small-cap Lookers, whose shares have almost halved in value this year as the car dealership chain battles weaker car demand in Britain, dropped another 8 per cent after it warned on annual profit. ― Reuters

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