FTSE 100 flat as rate hike fears offset mining gains; Bellway jumps

The domestically focussed mid-cap index advanced 0.4%, with consumer discretionary stocks being among the top performers. Bellway Plc rose 2.1% after a significant increase in annual profits and an increase in its target of new homes for the year ending July 2022.

London's FTSE 100 was subdued on Tuesday as gains in retail and mining stocks were offset by rate-hike risks, while homebuilder Bellway was the top boost to the mid-cap index after reporting a surge in annual profit. The blue-chip FTSE 100 index was flat at 0837 GMT. Miners Rio Tinto, Glencore, Anglo American, and Polymetal International were among the top performers.

British Airways owner IAG was the top loser, down 2.2% after brokerage Berenberg downgraded the stock to "hold" from "buy", cut its price target on the stock to 200 pence from 230. However, expectations the Bank of England could hike rates towards the end of this year on rising inflation and supply chain pressures pushed the pound to its one-month high of 1.3783, limiting gains on the export-oriented FTSE 100 index.

"The more that we see inflation data and put the pressure back on the central banks, the more pressure that is going to materialize on the markets as well," said Craig Erlam, senior market analyst at Oanda. The FTSE 100 has gained 11.5% so far this year on accommodative central bank policies and positive corporate results, although bets of a rate hike have recently weighed on the index as higher rates could dampen the pace of the UK's economic recovery.

Investors now await key UK inflation data due to be released on Wednesday for cues on further price pressures. The domestically focussed mid-cap index advanced 0.4%, with consumer discretionary stocks being among the top performers.

Bellway Plc rose 2.1% after a significant increase in annual profits and an increase in its target of new homes for the year ending July 2022. Shares of British price comparison website Moneysupermarket.com jumped 6.4% to be the top gainer in the mid-cap index after it agreed to buy cashback business Quidco for an initial consideration of 87 million pounds.

Online gaming company 888 Holdings dropped 1.8% after announcing that it expects a negative impact to 2022 EBITDA in its latest trading update.

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