• FTSE 100 down 0.2%, FTSE 250 flat
• Aerospace and defence stocks lead losses
• Plus500 sees annual results above market view, shares jump

Aug 19 (Reuters) - London stocks kick-started the week on a lacklustre tone, weighed down by aerospace and defence shares, although investor optimism over a potential September rate cut in the United States limited losses.

The blue-chip FTSE 100 index (.FTSE) , opens new tab was down 0.2% on Monday, after logging its best week since May in the previous session. The mid-cap FTSE 250 (.FTMC) , opens new tab was flat, as of 0710 GMT.

Aerospace and defence stocks (.FTNMX502010) , opens new tab inched 1.3% lower, tracking losses in European defence stocks following reports the German federal government would reject new military aid requests for Ukraine due to spending cuts.

Shares of Bae Systems (BAES.L) , opens new tab fell 2% while Rolls-Royce (RR.L) , opens new tab and Chemring (CHG.L) , opens new tab were down more than 1% each.

Heavyweight energy shares (.FTNMX601010) , opens new tab inched down 0.2% on lower crude prices, while banks (.FTNMX301010) , opens new tab dipped 0.1%.

On the flip side, precious (.FTNMX551030) , opens new tab and industrial metal miners (.FTNMX551020) , opens new tab inched 0.7% higher each, as gold prices traded near historic levels while copper gained on waning fears of U.S. recession and Chinese demand concerns.

Real estate (.FTUB3510) , opens new tab and real estate investment trusts (.FTNMX351020) , opens new tab were marginally higher after property website Rightmove said British estate agents reported higher buyer interest since the Bank of England's interest rate cut.

Investors remained optimistic over a potential U.S. rate cut as data last week reflected slowing inflation and allayed slowdown fears, uplifting sentiment after a global stocks sell-off earlier this month.

All eyes will be on commentary from U.S. Federal Reserve Chair Jerome Powell scheduled to speak at the Jackson Hole event later this week.

A monthly reading of the purchasing managers index is due in the UK and the United States later this week, alongside minutes of the Fed's last policy meeting in an otherwise data-light week.

Among individual stocks, Plus500 (PLUSP.L) , opens new tab gained 4.1% to top the FTSE 250 index after the online trading platform forecast its annual results to be above market view and also recorded a 13% jump in new customers in the first half of the year.

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https://www.reuters.com/world/uk/londons-ftse-100-slips-us-rate-cut-optimism-limits-losses-2024-08-19/