June 29 (Reuters) – London’s FTSE 100 slipped on Thursday as water utility stocks fell on prospects of tougher regulation, while hawkish remarks on interest rate outlook from major central bankers continued to dent risk appetite.
The blue-chip FTSE 100 (.FTSE) fell 0.4%, while the more domestically-focussed FTSE 250 midcap index (.FTMC) lost 0.8%.
Water utility stocks including Severn Trent (SVT.L), United Utilities (UU.L) and Pennon (PNN.L) fell between 2.8% and 3.5%, in anticipation of tougher regulation and even nationalisation of the country’s biggest supplier, Thames Water, as it struggles with huge debt.
UK banks (.FTNMX301010) led gains, up 0.9% higher after Citigroup raised its price targets on several banks including HSBC (HSBA.L) and Barclays (BARC.L).
Global central banks on Wednesday reaffirmed their resolve to beat inflation, warning rates may need to rise further.
“Those hawkish comments from the central banks will restrict investor appetite for European equities today and over the next few weeks,” said Alan Kinnaird, business development manager at Walker Crips Investment Management.
Meanwhile, data showed British households withdrew money from their savings in May at a record pace as a jump in interest rates slowed the rate of their borrowing.
The FTSE 100 is on track to post modest gains for the month, although the index is set to record a quarterly decline following two straight quarters of gains, as sticky inflation and towering interest rates took the wind out of equities.
Serco Group (SRP.L) jumped 8.6% to the top of FTSE 250 after the British company raised its full-year profit and revenue outlook.
Discount retailer B&M (BMEB.L) said its revenue rose 13.5% in its first quarter. Shares, however, slipped 6.5% as the stock traded ex-dividend.
De La Rue (DLAR.L) soared 20.5% after the banknote printer retained its forecast for annual adjusted profit.
Shares of Cineworld Group (CINE.L) tumbled 30.0% after the cinema chain operator said a U.S. court had approved its debt restructuring plan.
Investors will watch comments from Bank of England monetary policy committee member Silvana Tenreyro later in the day.
Reporting by Shashwat Chauhan in Bengaluru; Editing by Rashmi Aich and Sherry Jacob-Phillips
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