British stocks fall as inflation rises; Glencore's earnings hit
Feb 19 (Reuters) - Britain's benchmark index fell on Wednesday after inflation rose more than expected in the country, while Glencore's (GLEN.L), opens new tab shares slid after the company posted lower 2024 earnings.
The blue-chip FTSE 100 (.FTSE), opens new tab was down 0.3% at 1034 GMT, while the midcap FTSE 250 (.FTMC), opens new tab fell 0.4% to a nearly two-week low.
Britain's inflation accelerated to a 10-month high of 3.0% in January, surpassing expectations and testing the Bank of England's confidence that price pressures will ease over the longer term.
The BoE earlier this month cut its benchmark interest rate to 4.5% from 4.75% and said inflation was likely to hit 3.7% later this year, almost double its 2% target.
The UK house builders' index (.FTNMX402020), opens new tab dropped 1.6%, with homebuilders such as Persimmon (PSN.L), opens new tab, Taylor Wimpey (TW.L), opens new tab and Barratt Redrow (BTRW.L), opens new tab falling between 1.6% and 2.4%.
Elevated interest rates lead to higher mortgage payments, resulting in lower demand for new homes.
"It feels like we're balancing on an knife edge and it's just going to take a few poor sets of data to turn any optimism into pessimism for the markets," said Nick Saunders, chief executive officer at Webull UK.
Glencore's shares declined 6.9% after the miner and commodity trader reported that lower commodity prices impacted its earnings last year, despite returning $2.2 billion to shareholders through a share buyback.
This dragged the industrial metal mining index (.FTNMX551020), opens new tab down 2.6%, making it the day's biggest sectoral loser.
Trainline (TRNT.L), opens new tab slid 9% to a near five-month low after J.P. Morgan downgraded the stock to "neutral" from "overweight".
Jet2 (JET2.L), opens new tab tumbled 10.6% after the travel company warned of profit margin pressure due to high inflation increasing costs and reducing consumer holiday spending.
Peers Easyjet and Wizz Air (WIZZ.L), opens new tab were down over 4% each. The UK's travel-linked index (.FTNMX405010), opens new tab fell 1.9%.
Britain's 10-year bond yield rose to a three-week high at 4.6%, adding pressures on equities.
Utilities (.FTUB6510), opens new tab, often traded as bond proxy, added 0.8%.
Meanwhile, the energy index (.FTNMX601010), opens new tab advanced 0.7% as it tracked gains in crude prices.
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