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UK Feb services (PMI) rises to 53.5
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Mining stocks gain on higher metal prices
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Rightmove down on decline in site engagement
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FTSE 100 flat, FTSE 250 adds 0.4%
(Updates prices to close; adds details, comments)
By Ankika Biswas and Shashwat Chauhan
March 3 (Reuters) - The UK's FTSE 100 lost its initial
momentum on Friday, dragged down by energy majors Shell and BP,
while investors also assessed the likelihood for more Bank of
England monetary policy tightening following strong business
activity figures in February.
The blue-chip FTSE 100 closed flat, while the more
domestically focused FTSE 250 midcap index added 0.4%.
For the week, both the indexes logged weekly gains, boosted by optimism around a likely end to the BoE's rate-hiking cycle and larger-than-expected expansion in top metals consumer China's manufacturing activity. Data showed Britain's services sector grew at the fastest pace in eight months in February on the back of stronger business confidence and an improved economic outlook. Also weighing on equities was a firm pound after the robust economic data likely raised fears over the need for continued interest rate hikes to tame stubborn inflation. "Even though rates are probably likely to go a little bit higher, the economy is in a much better shape," said CMC Markets chief strategist Michael Hewson. This comes on the heels of BoE Governor Andrew Bailey indicating a possible end to rate hikes, while Chief Economist Huw Pill also highlighted a pick up in British economy and improving pay growth. With Shell and BP losing around 1% each, oil and gas was among the worst-performing sector indexes on Friday. Meanwhile, gains in miners like Glencore and Rio Tinto kept the FTSE 100 afloat, tracking higher metal prices on hopes of a demand recovery in China. The industrial metal miners index was among the top sector index gainers, up 2.1%, logging its best weekly performance since early November. Among individual stocks, Pearson slid 3.8% to the bottom of the FTSE 100 after the education group did not announce a further share buyback despite offering a positive outlook. Rightmove fell 1.1% after the British property portal reported lower engagement seen on its site during 2022, while oilfield services firm Hunting lost 7.7% after Berenberg downgraded the stock to "hold" from "buy". (Reporting by Shashwat Chauhan and Ankika Biswas in Bengaluru; editing by Eileen Soreng, Uttaresh Venkateshwaran and Sharon Singleton)
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