FTSE 100 dips on declines in personal goods and homebuilders

Britain's main stock index ended lower on Wednesday, led by a drop in personal goods and homebuilder stocks, while investors assessed crucial UK and US economic data ahead of interest rate decisions by central banks in coming weeks.

The blue-chip FTSE 100 index was down 0.4 per cent, touching its lowest levels in three weeks earlier in the session. The domestically-focused mid-cap FTSE 250 ended flat, after its biggest drop in almost a month.

Rate-sensitive homebuilders hit near one-month lows, down 2.9 per cent, after Barratt Developments said it did not anticipate profit growth until fiscal 2026. The homebuilder slipped 4.6 per cent.

The personal goods index lost 4 per cent, touching its lowest levels since February 2010, as sectoral heavyweights Burberry and Watches of Switzerland Group dipped 4.5 per cent and 3.4 per cent respectively.

Automobiles and parts were the top sectoral gainer, climbing 2.2 per cent, while aerospace and defence shares added 0.9 per cent as Rolls-Royce continued gains for the second session, adding 1.8 per cent.

On the data front, a survey showed Britain's services activity grew last month at the fastest pace since April and price pressures eased, pointing to a more benign inflation outlook and a settling of the economy after July's election.

US job openings dropped to a 3-1/2-year low in July, suggesting the labour market was losing steam, but probably not enough for the Federal Reserve to consider a big interest rate cut this month.

Among individual stocks, Direct Line Insurance Group fell 2.4 per cent after a half-year operating profit miss.

Airtel Africa dropped 5.2 per cent to the bottom of the FTSE 100 after JP Morgan downgraded the stock to "Neutral" from "Overweight".

Insurer and asset manager M&G declined 1.5 per cent after lower first-half operating profit.