Oct 16 (Reuters) - Britain's blue-chip stocks had their best week in six months, as investors flocking to defensive sectors offset a rout in AI-linked stocks, while finance minister John Healey's reassurances on fiscal discipline also helped risk appetite.
The export-heavy FTSE 100 closed 0.38% higher at 10,881.90 points, logging a weekly gain of 3.1%, the biggest since early April, while the midcap FTSE 250 gained 0.45%.
• UK's large-cap ETFs attracted $3.38 billion in estimated net inflows year to
date, already the biggest annual total since 2020, data from Morningstar showed
• "Flows into passive funds typically follow performance, but they also reflect investors looking to diversify away from US mega-cap technology and broaden their equity exposure," said Michael Born, an analyst at Morningstar
• Consumer staples supported gains. Cigarette maker British American Tobacco rose 2.1%, while Johnnie Walker owner Diageo gained 1.9%
• The beverages and medical equipment and services sectors advanced 7.8% and 6.9%, respectively, in the week
• Homebuilders jumped over 6% in the week after Healey reaffirmed his commitment to fiscal discipline on Thursday
• Banks were muted on Friday, recovering from early losses triggered by a report that Healey was likely to tax the lenders in the budget
• Bank of England Governor Andrew Bailey said signs of second-round inflation were limited ahead of next week's inflation data
• Traders are pricing in four BoE rate hikes over the next 12 months, according to LSEG data
• Defence stocks extended a strong run on the day: BAE Systems and Babcock International rose 2.6% and 3.6%, respectively
• THG had its best week in six months, surging 30% after the e-commerce firm raised its annual adjusted core profit forecast on Thursday
(Reporting by Darshan Kumar in Bengaluru; Editing by Sahal Muhammed)
