(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
* Fed meeting minutes point to faster-than-expected rate
hikes
* Banks track higher yields
* Dr. Martens slumps as Permira Funds sells 65 mln shares
* Greggs down as Omicron hits store staff
* FTSE 100 up 0.9%, FTSE 250 off 1.5%
(Updates to close)
By Bansari Mayur Kamdar
Jan 6 (Reuters) - UK shares dropped on Thursday, tracking a
fall in global equity markets after minutes of the U.S. Federal
Reserve's December meeting showed the central bank's hawkish
stance toward interest rate hikes as it looks to tame high
inflation.
The FTSE 100 ended 0.9% lower, with industrial
and healthcare stocks being the
top drags, down 2.6% and 1.3% respectively.
Global equities sold off after it emerged that U.S. central
bank policymakers said in their meeting last month that a "very
tight" job market and unabated inflation might require the Fed
to raise interest rates sooner than expected.
Banking stocks gained 2.1% as UK 10-year
yields rose, fuelled by rate hike expectations.
"If you're looking for a value play at the moment, the UK is
quite attractive," said Oliver Blackbourn, portfolio manager at
Janus Henderson Investors.
"It tends to do well in these sorts of environments because
of factors like its currency which tends to be sort of risk-on
and also the mix of sectors in the UK market today is really
helping."
The FTSE 100 gained 14.3% in 2021, lagging European and U.S.
peers, but Blackbourn said he expects UK stocks to start
catching up as markets move toward more value-oriented segments
from growth sectors such as technology.
The domestically focussed mid-cap index declined
1.5%, with travel and leisure stocks falling
1.6%.
Britain's services sector grew in December at the slowest
pace since the country was last in lockdown, as the spread of
the Omicron variant of the coronavirus hammered hospitality and
travel, a survey showed.
Three leading British retailers Next, Greggs
, and B&M on Thursday underscored the threat
they face from inflation this year, with their bosses battling
to remain competitive as consumer finances come under pressure
and prices surge.
Dr. Martens slumped 10.7% after bookrunner Goldman
Sachs International said Permira Funds sold about 65 million
shares of the boot maker.
Food-to-go retailer Greggs fell 8.0% after saying
surging cases of Omicron were putting pressure on its store
staff, though it was manageable from a business perspective.
(Reporting by Bansari Mayur Kamdar and Amal S in Bengaluru;
Editing by Subhranshu Sahu, Vinay Dwivedi, Elaine Hardcastle)