- Mining sector leads declines; FTSE midcap at June 10 level
- Services sector contracts at fastest pace since January 2023
- Bunzl up after lifting 2026 sales outlook
- Investors keen on Andy Burnham's fiscal policy plans
June 23 (Reuters) - London's FTSE indexes dropped to a more than one-week low on Tuesday, tracking weakness in global markets as prospects of interest rate hikes dampened risk-taking, while investors remained keen on who would be Britain's next leader.
The blue-chip FTSE 100 index fell 0.7% to its lowest since June 12 at 0919 GMT, while the midcap FTSE 250 fell 1.8% to its lowest since June 10.
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Heavy-weight precious and industrial metal miners fell 5% each and led sectoral declines, with Antofagasta down 6.5% and Fresnillo declining 5.6% as prices of gold, silver and copper slid.
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Under new U.S. Federal Reserve chair Kevin Warsh, traders are largely pricing in around two 25 basis point hikes by year-end — up from one earlier this month. Markets also see at least one 25 bp hike by the Bank of England in December, data compiled by LSEG showed.
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Bucking the trend were sectors perceived to fare better in times of economic uncertainty. Healthcare, pharma and consumer staples rose over 1% each.
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Local politics also remained in focus after prime minister Keir Starmer's Monday resignation. His rival Andy Burnham is largely expected to succeed, after top contender former health minister Wes Streeting said he would endorse Burnham.
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Investors are keen on Burnham's fiscal policies at a time public debt has soared to nearly 100% of economic output, which had complicated the work of six prime ministers before him.
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Meanwhile, data showed that the services sector contracted at the fastest rate in nearly three-and-a-half years in June.
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Among top movers, business supplies distributor Bunzl gained 3% after raising its annual revenue growth outlook following a strong first half, supported by robust demand in North America and some price hikes.
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Telecom Plus tanked 24% after announcing its five-year investment plan will slash near-term profits as the UK Utility group responds to intensifying competition.
Reporting by Johann M Cherian in Bengaluru; Editing by Joyjeet Das
Source: Reuters