By Khushi Singh and Shubham Batra
(Reuters) -UK stocks fell on Friday after a drop in Legal and General Group dragged the life insurance sector lower, while bond yields rose after comments from Bank of England’s Jonathan Haskel pushed investors to trim their bets on interest rate cuts.
The blue-chip FTSE 100 was down 0.3% on the day and hovered around two-week lows, while the midcap FTSE 250 slipped 0.2%. Both the indexes logged losses for a second week.
Legal & General slid 3.1% to its lowest in two months and was among the bottom performers on the FTSE 100, following a cut in price target by Citigroup.
The broader life insurance index shed 2.2% to hit a three-week low.
“Legal & General solvency remains strong but with the new CEO fresh in the seat, we see the likelihood of upside surprises from additional capital return as low at this point,” Citigroup wrote in a note to investors.
Shares of automobiles and parts were the top gainers with a 1.2% jump but were down for the week.
BoE policymaker Haskel, who voted to raise interest rates last week, told Reuters he is encouraged by signs that Britain’s inflation pressures might be on the wane but he would need more evidence of a cool-down before changing his stance.
The yield on the British 10-year benchmark note climbed to its highest level in over two months and traders now expect around 70 basis points of rate cuts in 2024.
Barclays slipped 0.6% after Britain’s biggest retailer Tesco said it would sell most of its banking operations to lender Barclays for up to 600 million pounds ($757 million).
Motor finance firm S&U was the top decliner on FTSE smallcap index, down 7.9%, after annual profit forecast came below market estimates.
Victrex rose 0.8% following the specialty chemicals maker’s fall in first-quarter revenue.
($1 = 0.7920 pounds)
(Reporting by Khushi Singh and Shubham Batra in Bengaluru; Editing by Rashmi Aich and Varun H K)
