By Tharuniyaa Lakshmi
Jan 28 (Reuters) – The UK’s blue-chip index declined on Wednesday, weighed down by banks and healthcare stocks as it missed out on a tech-led rally that boosted Wall Street indexes earlier, with investors turning cautious ahead of the U.S. Federal Reserve’s interest rate decision.
The FTSE 100 closed down 0.5%, while domestically-focused FTSE 250 finished little changed.
“There seems to have been a rotation out of European and U.K. stocks in favour of U.S. technology stocks ahead of earnings which weighed on the FTSE 100 today, and for the first time drove the S&P 500 past the 7,000 barrier and the Nasdaq 100 to record highs,” said Axel Rudolph, senior financial analyst at IG.
The FTSE 100 has relatively fewer technology shares compared to its U.S. counterparts.
Healthcare stocks fell 2.4% and were the biggest drag on the FTSE 100. Pharmaceutical firms Oxford Nanopore technology and AstraZeneca dropped 4.9% and 2.7%, respectively.
Meanwhile, banks retreated 1.3%. Barclays slid 2%, while HSBC Holdings fell 1.5%.
Luxury stocks also came under pressure after French luxury conglomerate LVMH plunged 7.9% as its fourth-quarter results dashed investor hopes of a speedy recovery in luxury demand, with a cautious outlook from its CEO Bernard Arnault. Burberry and Dr. Martens declined 4.7% and 1.8%, respectively.
However, precious metal miners rose 2.2%, rebounding from Tuesday’s losses as gold extended its rally above $5,300 per ounce. [GOL/]
Energy stocks also advanced 1.2%, lifted by oil prices hitting their highest since late September. Shell and BP each gained about 1%. The companies are seeking U.S. licenses to extract natural gas from fields in Trinidad and Tobago and Venezuela, according to Caribbean energy minister Roodal Moonilal.
Attention now turns to the Fed’s policy update later in the day, with most traders expecting the U.S. central bank to hold interest rates steady.
Pets at Home jumped 5.4% after the pet care retailer maintained its full-year profit forecast despite reporting lower third-quarter revenue, attributed partly to price cuts as part of its retail turnaround strategy.
(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Sahal Muhammed and Varun H K)
