- Housing-related stocks jump as inflation eases
- FTSE 250 hits one-month high
- Aston Martin rises on GS upgrade
- FTSE 100 up 1.1%, FTSE 250 adds 2.4%
July 19 (Reuters) - British stocks rose in a broad-based rally on Wednesday after domestic inflation eased more than expected, with a weaker pound pushing the exporter-heavy FTSE 100 to a more-than-two-week high.
The blue-chip FTSE 100 rose 1.1%. The more domestically focussed FTSE 250 midcap index added 2.4%, hitting a one-month high.
The pound weakened after British inflation fell more than expected in June - its slowest in more than a year at 7.9%, compared with expectations of 8.2%.
"Today's fall in inflation is a small step in the right direction for the UK economy," said Jeremy Batstone-Carr, European strategist at Raymond James Investment Services.
"But high wage growth and stubborn underlying prices show there is still a long journey ahead to drag inflation back down into more stable territory."
Bets for more interest rate hikes by the Bank of England remained elevated, with traders now leaning towards a 25-basis-point hike in August compared with expectations of a 50-bps hike earlier.
Beaten down homebuilders rose 5.2%, touching a five-week high, while other rate-sensitive stocks such as real estate and real estate investment trusts added 4.9% and 5.1%, respectively.
The only outliers were industrial metal miners, down 0.9% as Chilean miner Antofagasta slipped 3% after lowering its full-year copper output forecast and Rio Tinto edged 0.9% lower after it flagged concerns about a global economic slowdown.
Hargreaves Lansdown added 5.5% after the investment platform reported higher net new business and assets under administration in the fourth quarter.
Aston Martin Lagonda Global Holdings gained 5.1% after Goldman Sachs upgraded the luxury automaker to "buy" and Severn Trent rose 3.5% after the water supplier said it had a strong start to this financial year with higher reservoir levels than a year ago.
Segro added 5.3% after Exane BNP Paribas upgraded the warehousing specialist to "outperform" from "underperform".
($1 = 0.7723 pounds)
Reporting by Shashwat Chauhan in Bengaluru; Editing by Sohini Goswami and Janane Venkatraman
Source: Reuters