FTSE 100 Live: Builders Rally as FTSE 100 Holds Ground, Defence and Tech Stocks Drag

The FTSE 100 opened slightly lower on December 16 but managed to hold on to most of the previous session’s gains. Optimism around an interest rate cut was able to offset weakness in defence, technology, and energy stocks. The UK’s blue-chip index further slipped to 9,733.81 with a discount of 17.5 points. It clearly reflects a cautious tone on the back of mixed global market cues.

Housebuilders Lead the Gains

Housebuilding stocks emerged as the standout performers, fueled by fresh UK labour market data that strengthened expectations of a Bank of England rate cut later this week. 

Shares of Persimmon gained 1.11% to £1,318 and Barratt Redrow rose 0.64% to £361.5, as easing wage pressures and rising unemployment increased hopes of lower borrowing costs. 

Investors might be getting ready for improved mortgage affordability, which has all the potential to support housing demand in the coming months. 

EasyJet gained nearly 2.15%, while InterContinental Hotels Group managed to advance 1.60% to £10,500. It reflects optimism around consumer spending resilience and lower financing costs.

Defence and Tech Under Pressure

On the downside, BAE Systems fell 2.21% to £1,656 and Babcock International declined 2.07% to £1,233, while Rolls-Royce slipped 1.17% to £1,101 announcing an extension to its share buyback programme. 

Rolls-Royce confirmed an additional £200 million in repurchases following the completion of its £1 billion buyback.

Meanwhile, technology-focused investment trusts such as Scottish Mortgage and Polar Capital Technology Trust also fell, tracking overnight weakness in US tech stocks after the Nasdaq closed lower.

Labour Market Data Fuels Rate Cut Bets

Fresh data from the Office for National Statistics showed the UK unemployment rate rising to 5.1%, its highest level since 2021. 

Payroll employment continued to decline, and private sector wage growth eased further to 3.9%. 

While overall earnings growth remains above pre-pandemic norms, the gradual cooling in the labour market has reinforced expectations that the Bank of England will cut interest rates by 25 basis points to 3.75%.

Economists believe such a move would mark the lowest base rate since early 2023, providing relief to interest-sensitive sectors such as housing, retail, and consumer discretionary stocks.

Centrica's Spirit sells final stakes

British Gas owner Centrica will get £39 million after its majority-owned Spirit Energy sold its final 15% interest in the Cygnus gas field, along with all other producing assets in the Greater Markham Area and Southern North Sea, to Serica Energy for a total transaction value of approximately £98 million.

Also Read: Why These 7 Stocks are Set for Big Earnings Growth Despite Market Slump

Global Cues and Sector Watch

US stocks closed mostly lower overnight. The Nasdaq slipped 0.6%, S&P 500 was down 0.2% and the Dow Jones dropped 0.1%.

Asian markets were in red zone this morning and extended losses from yesterday. Japan’s Nikkei and Hong Kong’s Hang Seng were both down over 1.5%, while Chinese domestic stocks are 1.1% lower in Shanghai.