UK midcap stocks eke out marginal gain

The midcap FTSE 250 index gained 0.1 per cent with Watches of Switzerland surging 13.1 per cent, its best day in around two years

UK midcap stocks eked out a marginal gain on Tuesday, underpinned by a slew of positive earnings, while the benchmark FTSE 100 slid as declines for commodity-linked stocks outweighed gains in Associated British Foods.

The midcap FTSE 250 index gained 0.1 per cent with Watches of Switzerland surging 13.1 per cent, its best day in around two years as the luxury retailer outlined plans to more than double its annual profits by fiscal year 2028.

Persimmon soared 5.9 per cent after it said it would build more homes this year than its earlier expectation.

Nevertheless, the FTSE 100 slipped 0.1 per cent as energy stocks and industrial metals miners weighed after weak trade data from top-consumer China dulled the demand outlook for commodities.

Still, Associated British Foods topped charts on the benchmark index, climbing 6.8 per cent after it forecast "meaningful progress" in its new financial year, driven by a strong recovery in the margins of its Primark fashion business.

It is a real mixed bag today. I think investors are trying to figure out what next, said Danni Hewson, head of financial analysis at AJ Bell.

On one hand, we have got concern about potential recession but at the same time we have this expectation that interest rates would not stay as high for as long and definitely have now reached their peak which investors are sort of filtering in.

Domestically-focused midcaps had ended the last three months leading up to November in losses on rate-hike concerns. Traders are now pricing in possible rate cuts in 2024.

Among other movers, Direct Line Insurance Group added 8 per cent after the insurer posted a rise in gross premiums written in Q3.

Homebuilders were also among top gainers, gaining 2.5 per cent after domestic house prices ended six successive months of drop in October.