FTSE 100 ends flat as losses in healthcare counter financials boost; RS Group jumps

By Johann M Cherian and Shristi Achar A

(Reuters) -The UK’s FTSE 100 was muted on Tuesday as losses in defensive sectors like healthcare outweighed gains in financial stocks, while shares of RS Group surged on talks of takeover interest.

The blue-chip index was flat, while the mid-cap FTSE 250 shed 0.4%.

Electronics products distributor RS Group jumped 5.5% on report of takeover interest from a private equity buyer.

Despite some expectations of a soft landing, hawkish commentary from central bankers have kept investors on edge about interest rates remaining elevated for long.

The Bank of England has concluded its tightening cycle and will likely keep the Bank Rate at 5.25% until at least July, a Reuters poll of economists showed, although a significant minority said it would hike rates again this year.

“The economy needs to slow more than it has done thus far,” said Richard Flax, chief investment officer at Moneyfarm.

“It seems fair to say that the impact of all of those rate hikes has not yet fed through completely into the real economy.”

Healthcare firms reversed early gains to shed 0.2%, while investment banks added 0.7%.

Banks rose 0.7%, led by a 3.9% gain in Barclays after Morgan Stanley upgraded the lender to “overweight” from “equal-weight” on improved outlook for revenue and payout.

ASOS slipped 1.5% as the online fashion retailer reported a slump in fourth-quarter sales and said second-half earnings were expected to be around the bottom of its guided range.

Small-cap firm Videndum slumped nearly 36.9% after the company forecast a weak second half of the year, citing significant impact from strikes by Hollywood writers and actors.

The merchant bank Close Brothers slid 1.9% after its annual financial results took a hit from increased provisions in relation to Novitas.

(Reporting by Johann M Cherian and Shristi Achar A in Bengaluru; editing by Eileen Soreng, Saumyadeb Chakrabarty and Ros Russell)