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* Persimmon leads homebuilders lower
* UK inflation pressures hit records as growth cools only
slightly
* FTSE 100 down 0.2%, FTSE 250 off 0.1%
(Updates to close)
By Shashank Nayar and Amal S
June 23 (Reuters) - London's FTSE 100 ended lower on
Wednesday as economic data showed inflation pressures hit record
levels this month, while gains in travel and commodity-linked
stocks were offset by a slide in consumer staples.
The preliminary reading of the HIS Markit/CIPS UK Composite
Purchasing Managers' Index (PMI) pointed to one of the strongest
monthly improvements in business activity since 1998.
The FTSE 100 index inched lower 0.2%, while the
domestically focused mid-cap index shed 0.1%
Dollar-earning consumer staples stocks, including Unilever
, Reckitt Benckiser Group, British American
Tobacco and Diageo Plc fell between 0.4% and
1.2%, and were among the biggest drags.
"The latest flash PMI figures set the tone ahead of
tomorrow's interest rate decision by the Bank of England," said
Danni Hewson, analyst at AJ Bell.
"All those cost pressures will work their way through and
signal an uncomfortably bumpy period where inflation will
continue on its upward trajectory."
A recent rise in inflation has kept the FTSE 100 pinned near
the 7,000 mark, although easing lockdown restrictions and
attractive stocks valuations have revived demand for shares that
stand to benefit from a steady economic recovery.
Following a hawkish tone by the U.S. Federal Reserve on
monetary policy last week, investors are focused on the Bank of
England's meeting on Thursday for cues on the central bank's
stance on the rising prices.
"Investors might expect some guidance on the future
trajectory of UK interest rates although consumer prices are
merely bubbling on this side of the Atlantic when compared with
the boiling point they have already reached in the U.S.," said
Russ Mould, investment director at AJ Bell.
Oil majors BP and Royal Dutch Shell jumped
over 1.6%, while base metal miners and travel
stocks gained 0.8% and 6.1% respectively.
Homebuilders dropped 1.4%, with Persimmon
among the top losers in the index.
The drop came after Persimmon and insurer Aviva
agreed to measures suggested by Britain's competition regulator
as part of its long-running investigation into possible
mis-selling of leasehold homes and high ground rents.
(Reporting by Shashank Nayar and Amal S in Bengaluru; Editing
by Subhranshu Sahu and Jonathan Oatis)
