FTSE 100 Declines Amid Weakness in Healthcare and Energy; Easing Wage Growth Sparks Rate Cut Speculation, Reports Reuters

By Khushi Singh and Purvi Agarwal

London’s stock market closed lower on Tuesday, primarily due to a sell-off in healthcare and energy shares, while a slowdown in wage growth in the UK strengthened expectations for further interest rate cuts by the Bank of England.

The blue-chip FTSE 100 index declined by 0.8%, following its strongest performance in over a month on Monday. Meanwhile, the mid-cap index ended the day unchanged.

The pharmaceutical and biotech sector dropped by 1.5%, reaching its lowest point in more than a month, largely impacted by AstraZeneca, which fell by 2.4%. Detailed results from one of AstraZeneca’s significant lung cancer trials revealed that its experimental precision drug did not notably enhance overall patient outcomes.

Energy stocks also experienced a setback, declining by 1.7% as futures prices dipped below $70 per barrel for the first time since December 2021, following OPEC+’s downward revision of its demand forecast for this year and 2025.

In terms of sector performance, the automobiles and parts index was the biggest decliner, down by 2.9%, while the banks index fell by 1.9%.

On the upside, precious metal miners saw substantial gains, rising by 6.7%, which marked their best day since November 4, 2022, driven by a 22.9% surge in shares of gold miner Centamin. AngloGold Ashanti announced plans to acquire the Egypt-focused company for a $2.5 billion stock and cash deal.

Moreover, rate-sensitive real estate and homebuilder indexes ranked among the top gainers after data revealed that UK pay growth had cooled to a more than two-year low during the three months leading to July, alongside significant employment increases. Economists believe this data supports the likelihood of a rate cut by the Bank of England in November.

In individual stock movements, Alpha Group saw its shares plummet by 11.1%, landing at the bottom of the mid-caps index following the announcement of a leadership transition, with Clive Kahn set to replace founder Morgan Tillbrook as CEO in January 2025. Additionally, IQE experienced a significant decline of 19.2% after indicating that its annual performance would align with the lower end of analysts’ expectations.