FTSE 100 ends higher as financials rise on moves to reform sector

By Johann M Cherian and Shristi Achar A

(Reuters) -UK’s blue-chip index edged higher on Friday as financial stocks rose on a government move to overhaul the sector, while investors awaited interest rate decisions from major central banks next week.

The FTSE 100 edged up 0.1% after three consecutive sessions of losses, while the domestically focused FTSE 250 index gained 0.5% after hitting a one-month low in the previous session.

Still, both indexes ended the week lower.

The investment banking and brokerage services index rose 0.7% and banks gained 0.8% after Britain set out 30 measures to overhaul the financial sector including a repeal of “burdensome” EU rules the government says will unlock investments.

“It’s all part of the UK trying to find its identity in a post-Brexit world. The UK has become very worried recently that it would be left out after Amsterdam and France overtook the UK in terms of trading activity,” said Giles Coghlan, chief market analyst at HYCM.

Focus will be on the Bank of England’s rate decision next week, with traders expecting the central bank to raise rates by 50 basis points despite fears of a recession.

“Inflation rates are probably peaking, and they will start to calm down, but they may not come down as quickly as people hope…we have to remember it is a very short period since everything seemed chaotic in October,” said Andrew Bell, chief executive officer of Witan Investment Trust.

Among single stocks, Man Group jumped 5.3% after the investment management firm announced a share buyback programme of up to $125 million.

Anglo American Plc dropped 3.3% after the global miner cut its copper production estimates for 2023 because of deteriorating ore grades at its Chilean mines.

Pendragon Plc sank 28.4% after top investor Hedin Mobility dropped its takeover pursuit of the British auto retailer, citing challenging market conditions and an uncertain economic outlook.

(Reporting by Johann M Cherian and Shristi Achar A in Bengaluru; Editing by Rashmi Aich and Anil D’Silva)