Oct 15 (Reuters) - London's blue-chip stocks closed at a seven-week high on Thursday after the finance minister reaffirmed the government's commitment to fiscal discipline, while a shift into defensive sectors amid a deepening global selloff in AI-related stocks also supported the benchmark.
The benchmark FTSE 100 index closed higher by 1.1% to 10,840.35 points, its highest since August 26, while the midcap FTSE 250 also rose 0.26%.
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Investors sought refuge in defensive sectors as a global chip stocks selloff intensified, benefiting UK's large caps with limited exposure to AI
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"It's a rotation towards long-term; almost an infrastructure play without the risk of a rate increase and healthcare, consumer cyclicals are a safer heaven as they are not overly leveraged," said Nick Saunders, CEO of Webull UK
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Drugmakers AstraZeneca and GSK climbed 3.2% and 2.9%, respectively
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Dove soap maker Unilever rose 1.8% and cigarette maker British American Tobacco advanced 2.5%
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British finance minister John Healey said this month's budget would aim at bolstering economic resilience, adding that he and Prime Minister Andy Burnham were aligned on maintaining fiscal discipline
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Financials, including heavily weighted banks, was up 0.3%
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UK's gross domestic product rose 0.1% in August, boosted by AI optimism, against expectations of a 0.1% drop
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Bank of England Chief Economist Huw Pill said that any future interest rate increase should not be interpreted by investors as the start of a prolonged series of rate hikes
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Economists polled by Reuters expect the BoE to raise rates to 4% in November
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Industrial metal miners were down 1.4%, on weaker copper prices
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Antofagasta fell 4.1%, after the Chilean miner's third-quarter copper production declined year-on-year
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E-commerce group THG surged 16.3% after lifting its annual profit forecast
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Paper and packaging firm Mondi slumped 7.9% after hiking prices for several paper grades to offset higher energy costs
Reporting by Darshan Kumar in Bengaluru; Editing by Vijay Kishore and Shailesh Kuber
Source: Reuters