FTSE 100 rises as markets welcome milder US inflation data

Aug 12 (Reuters) - Britain's blue-chip index climbed on Tuesday as equity markets worldwide cheered a milder U.S. inflation print that kept alive hopes for interest rate cuts in the world's largest economy.

The blue-chip FTSE 100 .FTSE edged up 0.2%, while the more domestically focused midcap index .FTMC was down 0.2%.

The latest U.S. consumer price index report painted a mixed picture for investors. While overall price increases moderated in July, a measure of underlying inflation posted its largest gain in six months.

Despite the mixed signals, financial markets maintained expectations the Federal Reserve would proceed with an interest rate cut in September.

Back home, data showed Britain's jobs market continues to soften, with payrolls declining for a sixth consecutive month and vacancies decreasing further. However, persistent wage growth underscored the Bank of England's cautious approach toward interest rate cuts.

In markets, Spirax SPX.L surged 13%, leading gains on the blue-chip index, after the manufacturing group forecast organic sales growth accelerating in the second half of the year on a strong order book.

Among sectors, the aerospace and defence index .FTNMX502010 rose 0.9% in the day. The sector came under pressure since last week after peace efforts by the U.S. to end the Russia-Ukraine conflict gained momentum.

Utilities .FTUB6510, which are often traded as bond proxies, were the biggest drag, down 1.8% as the yields on British government bonds rose after the jobs data.

Bellway BWY.L inched 1.6% higher after it said it expects to build more homes in its new financial year. The outlook lifted the broader UK housing sector index .FTNMX402020 by 0.9%.

London-listed Atalaya Mining Copper ATYM.L climbed 9.2% after the miner raised its copper production outlook for the financial year 2025, lifting the broader industrial metal miners index .FTNMX551020 by 1.1%.

Earlier in the day, a 90-day extension of the tariff truce between the U.S. and China provided temporary relief to investors about global trade, effectively postponing potentially damaging triple-digit duties on Chinese exports to the United States.

Among other stocks, gambling firm Entain ENT.L dropped 1.9% despite forecasting its annual core profit outlook above market expectations.

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