UK's FTSE 100 logs strongest week in six months on defensive-sector rally
EWU•The FTSE 100 rose 3.1% for the week, its biggest weekly gain since early April, as defensive shares offset losses in AI-linked stocks. It closed Friday up 0.38% at 10,881.90.
1. Defensive shares lead gains
The export-heavy FTSE 100 had its strongest week in six months as investors moved into defensive sectors. Consumer staples supported Friday's gains, with British American Tobacco rising 2.1% and Diageo gaining 1.9%; beverages and medical equipment and services advanced 7.8% and 6.9% for the week.
2. Flows and policy factors
UK large-cap ETFs attracted an estimated $3.38 billion in net inflows year to date, the largest annual total since 2020, Morningstar data showed. Analyst Michael Born said the flows reflected investors diversifying away from US mega-cap technology and broadening equity exposure. Homebuilders rose more than 6% for the week after John Healey reaffirmed his commitment to fiscal discipline.
3. Stocks and rates
BAE Systems rose 2.6% and Babcock International gained 3.6% on Friday. THG surged 30% for the week after raising its annual adjusted core profit forecast on Thursday. Bank of England Governor Andrew Bailey said signs of second-round inflation were limited ahead of next week's inflation data; traders were pricing in four rate hikes over the next 12 months.
