FTSE 100 flat as rise in financials offset retailer weakness

The blue-chip FTSE 100 held steady at 10,044.7 points, while the domestically focused mid-cap index was also flat, holding near its four-year high

London’s FTSE 100 was little changed on Thursday as weakness in oil and retailers was offset by rising defence and financials stocks, with the rally in British equities taking a breather after hitting a record high earlier this week.

The blue-chip FTSE 100 held steady at 10,044.7 points, while the domestically focused mid-cap index was also flat, holding near its four-year high.

Energy giant Shell dropped 3.5% after the company said it expects a loss in its chemicals and products business in the fourth quarter, prompting questions over whether it will maintain the pace of its share buyback programme. Rival BP was down 0.6%.

At the bottom of the FTSE 100 was Associated British foods, which plunged 14% after it warned annual profit would decline as heavy discounting at its Primark fashion business and weaker demand hit food ingredient sales.

Greggs declined 5.8% after the fast food chain warned subdued consumer confidence meant profit would be flat this year, despite a pick-up in sales in the Christmas quarter.

Food retailer Tesco forecast full-year profit at the upper end of its guidance as it reported a 3.2% rise in underlying UK sales for the key Christmas trading period. Its shares however, dropped 6.7%.

Helping offset some losses, defence stocks rose to a record high.

Britain’s largest defence company BAE systems added 5%, hitting its highest since October.

Heavyweight banks jumped 0.8%, offsetting some weakness.

UK stocks started the year on a strong note. The blue-chip FTSE topped 10,000 points for the first time last week as investors also priced in Bank of England rate cuts later this year.