Life insurance leads sectoral losses
Retailers rally as MS lifts profit outlook
FTSE 100 down 1.2, FTSE 250 down 0.7

Aug 15 Reuters London stocks tumbled on Tuesday after record wage growth spurred worries of inflation and further interest rate hikes, while Legal General declined on a lower firsthalf profit.

British wages excluding bonuses were a record 7.8 higher than a year earlier in the three months to June, adding to worries for the Bank of England BoE about longterm inflation, which could keep interest rates elevated for longer.

Speed of wage growth will support the more hawkish end of the Bank of England. So in the margin it makes rate hikes more likely, said Richard Flax, chief investment officer at Money Farm.

The exporterheavy FTSE 100 index declined 1.2 by the first hour of trading, while midcap stocks also fell 0.7. Both the indices hit near onemonth lows.

The pound rose as much as 0.28 to 1.2720 right after the data, while both shortdated and longdated gilt yields also shot higher.

Ratesensitive real estate stocks also dipped 1.9.

Life Insurance stocks fell over 2, leading sectoral losses, dragged down by an over 3 drop in shares of British insurer Legal General.

Most sectoral indexes were in the red after the wage growth data, while midcap stocks also fell 0.7.

Retailer stocks were the only outlier, as they rose 0.7, supported by shares of Marks Spencer, which jumped more than 8 after the British retailer raised its profit outlook….