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UK stocks subdued as investors turn to ECB policy meeting

FTSE 100

The FTSE 100 advanced 0.2%, while the FTSE 250 dropped 0.3%

London-listed stocks were subdued in early trading on Thursday as investors turned to a European Central Bank (ECB) policy meeting and U.S. inflation data for cues on whether global central banks could start tapering monetary policy sooner than expected.

The export-heavy FTSE 100 advanced 0.2%, tracking small gains in Asian stocks, while the mid-cap FTSE 250 dropped 0.3%. U.S. stock index futures shed between 0.1% and 0.2%.

Pharmaceutical stocks led gains among sectors in the UK, with AstraZeneca edging higher a day after a study of COVID-19 vaccine side effects in Scotland found only an association with a largely harmless bleeding condition and no link to brain clots.

Personal goods and insurance stocks were also among the biggest gainers by 0740 GMT.

There’s a sense of every man for himself ahead of the U.S. inflation data this evening, a data point that has left markets in limbo, said Jeffrey Halley, a market analyst at OANDA.

With gold, oil and commodities at or near multi-month highs, either the street thinks the inflation story is overdone, or there is a severe degree of complacency out there, he said.

UK stock markets have matched gains in their U.S. and European peers this year on hopes of a swift post-pandemic economic recovery, but rising inflation has recently slowed the pace of increase on fears of a broader tightening in monetary policy.

The ECB is expected to keep its policy guidance unchanged and publish updated euro area macroeconomic projections at its policy meeting later in the day.

In company news, online trading platform CMC Markets gained 2.9% as it said annual profits more than doubled.

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