FTSE 100 inches higher as Avast surges; inflation, virus worries persist

London's FTSE 100 inched higher on Thursday, as gains in cybersecurity firm Avast helped offset losses in energy stocks and domestically focused companies that have been hurt by a steady rise in inflation and local coronavirus infections.

London's FTSE 100 inched higher on Thursday, as gains in cybersecurity firm Avast helped offset losses in energy stocks and domestically focused companies that have been hurt by a steady rise in inflation and local coronavirus infections. UK-based cybersecurity firm Avast Plc jumped 13.1% to the top of the FTSE 100 after revealing it was in advanced talks over a merger with peer NortonLifeLock Inc.

The blue-chip FTSE 100 index was up 0.1%, held back by losses in Royal Dutch Shell and BP which fell 2.3% and 2.9% respectively. The energy sector dropped 2.24%, the most among sectors. The mid-cap FTSE 250 index fell 0.4% as fears over rising inflation and a jump in virus cases affected the more domestically focussed stocks.

Travel stocks dropped 1%, while Tullow oil was the top loser, down nearly 4%. "These nagging concerns about inflation, transitory or otherwise have continued to dominate sentiment, while worries over the pace and persistence of rising prices, appear to be tempering optimism over the wider global recovery story," said Michael Hewson, chief market analyst at CMC Markets.

Bank of England Governor Andrew Bailey said the central bank would assess inflation data for things that could be temporary, before taking a call on raising rates, while a roaring jobs market in June also showed growing inflation pressures from rising wages. The FTSE 100 has gained 9.7% so far this year helped by record-low interest rates, but a rise in inflationary pressures coupled with risks arising from a jump in local coronavirus infections have slowed the rise of the blue-chip index, leading it to underperform its wider European peers.

Among stocks, the world's largest credit data company, Experian was the top boost to the FTSE 100, up 5.5%, after it raised its annual outlook after posting a 31% jump in its first-quarter revenue.