* FTSE 100 little changed
* Housebuilders fall, UK inflation takes surprise jump
* Weak German investor morale hurts broader sentiment
By Andrew Winterbottom
LONDON, July 15 Britain's top shares traded flat
on Tuesday, held back by housebuilders, on concern UK interest
rates will soon rise. Weakening German investor morale took its
toll on broader market sentiment.
Focus will shift later in Tuesday's session to U.S. retail
sales numbers and Federal Reserve Chair Janet Yellen's testimony
on Fed policy before the Senate Banking Committee for clues as
to the market's next moves.
Barratt Developments led the FTSE 100's losses,
falling nearly 3 percent. Persimmon fell nearly 2
percent. Mid-caps Redrow, Taylor Wimpey and Bovis
Homes shed 2.7 to 3.3 percent.
Shares in housebuilders, volatile in recent weeks, came
under pressure as a report on Tuesday showed British inflation
unexpectedly rose to a five-month high in June.
"The feeling seems to be that interest rates could
potentially go up sooner than the market expects, given the way
that the inflation data was reported," Manoj Ladwa, head of
trading at TJM Partners, said.
Housebuilders sold off in mid-June when Bank of England
Governor Mark Carney said rates may rise sooner than markets
were predicting. They recovered towards the end of the month
when the BoE imposed measures aimed at curbing house prices that
turned out to be more lenient than the builders had feared.
Carney said on Tuesday the central bank's forward guidance
was intended to signal how interest rates might change over the
medium term, not pinpoint the timing of a first hike.
The broader FTSE 100 index, up 2.94 points, was flat
in percentage terms, at 6,749.08 points by 1140 GMT. It was also
hampered by German investor morale data, which dropped to its
lowest in 1 1/2 years in July.
Tuesday's gainers were led by basic resources stocks. The UK
mining index rose 0.8 percent on expectations a
gradual global economic recovery will improve demand for metals
and on sector earnings results to be released tomorrow.
(Reporting By Andrew Winterbottom)