The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville/File Photo
Aug 3 (Reuters) – Britain's main stock indexes closed higher on Wednesday as Avast surged after it won regulatory approval for NortonLifeLock's $8.6 billion deal, while banks rose a day before an expected interest rate hike from the Bank of England.
Shares of Avast Plc (AVST.L) soared 43.8% to an all-time high after Britain's competition regulator said it has provisionally cleared cybersecurity firm NortonLifeLock's (NLOK.O) $8.6 billion purchase of its rival. read more
The blue-chip FTSE 100 index (.FTSE) was 0.5% higher, while the domestically focussed midcap index (.FTMC) gained 0.7%. Both the indexes clocked strong gains in July, with the FTSE 100 outperforming its global peers so far this year.
"The UK market is a defensive market, so it will tend to outperform in a year like 2022 when there are a lot of uncertainties," said Thomas Moore, senior investment director at abrdn.
"People will still pay for their energy, heating bills; they will buy cigarettes, a bottle of whiskey. Inflation and interest rates could be a problem for the UK economy, but it is unlikely to be a problem for UK stock market."
All eyes are on the Bank of England's meeting on Thursday where policymakers are expected to raise interest rates by 50 basis points after other central banks pushed up borrowing costs sharply in recent weeks, despite the risk of an economic slowdown or a recession. read more
UK banks (.FTNMX301010) rose 1.5% ahead of the decision.
"If we get the 50 basis point hike, the big winners of that will be the banking sector," said Stuart Cole, head macro economist at Equiti Capital.
"But it is going to come at the same time as consumers are facing higher cost of living with things such as inflation."
Markets also took comfort in U.S. House Speaker Nancy Pelosi's leaving Taiwan following a visit which angered China. read more
Hiscox (HSX.L) dipped 0.7% after the Lloyd's of London insurer posted a first-half pretax loss of $107 million. read more
Homebuilder Taylor Wimpey Plc (TW.L) gained 5.5% after it forecast annual operating profit near the top end of market consensus range. read more
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Voting by Britain's Conservative Party members to pick the next prime minister has been delayed after the GCHQ spy agency warned that cyber hackers could change people’s ballots, The Telegraph reported on Tuesday.
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