17.40: The FTSE 100 closed up 25.63 points at 6201.12 as investors responded to signals that the US Federal Reserve isn’t in a hurry to raise interest rates again.
The US Dow Jones rose 134.4 points to 17,460 in early trading, while Germany’s DAX was down 91.2 points at 9,892.2 and France’s CAC 40 was off 20.1 points at 4,442.9. Brent crude moved back above $41 while US WTI crude was nudging $40.
The Bank of England left interest rates on hold at 0.5 per cent and warned that Brexit might ‘depress growth’ in the near term.
Data: Some upbeat US pointers also helped lift the Dow, with leading economic indicators rising for the first increase in three months, while the Philly Fed index turned positive for the first time in seven months
But the pound jumped two cents higher against the US dollar to $1.45 after Bank of England governor Mark Carney said a UK rate hike “was more likely than not”. Sterling was also a cent higher against the euro, at €1.28.
Overnight, Federal Reserve chairwoman Janet Yellen kept rates on hold at between 0.25 per cent and 0.5 per cent, but added the US central bank now expects to raise rates twice this year, instead of four times, due to the ‘economic risk from abroad’. Growth has slowed in China and other emerging economies over the last year.
Meanwhile, the eurozone’s annual inflation rate fell into negative territory at minus 0.2 per cent in February, against a reading of 0.3 per cent the month before. The EU is the UK’s largest trading partner.
Soft drinks makers fell after yesterday’s Budget saw a levy slapped on sugary drinks in a bid to fight childhood obesity.
Robinsons owner Britvic was down 2 per cent or 12.5p at 687p, and Irn Bru maker AG Barr fell more than 5 per cent or 29.5p to 511p, on top of a 3 per cent decline it saw in the previous session.
GlaxoSmithKline fell 12.5p to 1399.5p after the pharmaceuticals giant said chief executive Sir Andrew Witty will step down in March 2017.
The oil price rise helped lift shares in BP and Royal Dutch Shell by 9.5p to 359.6p and 27.5p to 1738.5p respectively.
The biggest risers in the FTSE 100 were Fresnillo up 91.5 at 1007p, Anglo American up 48.2p at 540.9, Glencore up 13.7p at 158p and Antofagasta up 41.1p at 537.5p.
The biggest fallers in the FTSE 100 were Worldpay down 7p at 275.1p, Shire down 87p at 3568p, Barclays down 3.4p at 160.6p and easyJet down 31p at 1485p.
17.01: The FTSE 100 closed up 25.63 points at 6201.12. More to come.
15,00: The Footsie ticked higher in late afternoon trading as US blue chips made early gains on further consideration of yesterday’s Federal Reserve move to peg US interest rates and, although the Bank of England matched that rate decision today, the pound still soared against the dollar.
With an hour and a half of trading to go in London, the FTSE 100 index was up 8.2 points, or 0.1 per cent at 6,183.7, well above the day’s low of 6,125.70, but below the early session peak of 6,220.02.
European markets remained sharply lower, however, with Germany’s Dax 30 index dropping 1.4 per cent and France’s CAC 40 index losing 0.9 per cent after, as expected, final eurozone February CPI numbers dented any lingering hope for further ECB policy easings.
In early trade on Wall Street, the blue chip Dow Jones Industrial Average managed to advance 87.9 points at 1,7413.6, while the broader S&P 500 index was up 6.5 points at 2,033.7, but the tech-laden Nasdaq Composite shed 5.5 points at 4,758.5.
US blue chips built on yesterday’s gains made on the Fed decision to keep US interest rates unchanged and temper expectations for the numbers of rate hikes likely this year due to the risks from an uncertain global economy.
Some positive US economic data also helped lift the Dow, with US leading economic indicators rising 0.1 per cent in February, the first increase in three months, while the Philly Fed manufacturing index turned positive for the first time in seven months, jumping to +12.4 this month from -2.8 in February.
Strength in energy stocks also helped US blue chips to rise, with Brent crude bumping up close to $41 a barrel – near the best level so far for 2016 – on production freeze meeting hopes and as the dollar took a dive on the dovish Fed comments.
On currency markets, against a weaker dollar, the pound jumped nearly 1.5 per cent to $1.4463, rebounding sharply after hitting a two-week low of $1.4053 yesterday when the 2016 Budget saw a trimming of UK growth and inflation forecasts.
Connor Campbell, Financial Analyst at Spreadex, said: ‘There appeared to be a battle over who was more dovish out of US and UK central banks this Thursday, the markets concluding that Yellen and her Fed cohorts bested their Bank of England counterparts on that iffy metric.
‘The pound was the undoubted victor from this decision, surging by 1.6 per cent against the dollar to touch $1.45 for the first time in over a month.
‘Sterling’s response to the Bank of England’s inaction was interesting; nothing from the MPC suggested an imminent rate hike, yet the pound reacted with effervescent enthusiasm.
‘Yet a combination of a) how low the currency has fallen since the start of the year, b) relief from investors that there weren’t any hints towards a rate cut, and, most importantly, c) just how poorly the dollar reacted to the Fed’s statement on Wednesday evening likely explains the pound’s post-BoE performance.’
The pound was also higher against the euro at €1.2777 despite the Bank of England raising worries about a possible blow to the UK economy from a vote for a ‘Brexit’ from the European Union in June’s referendum.
The comments came as the Bank left UK interest rates unchanged at 0.5 per cent today, with all nine policymakers on the MPC voting to keep rates steady at record lows, where they have remained since March 2009.
Among equities, falls by financial stocks weighed on the UK blue chips reflecting interest rate factors, as low rates weigh on the industry’s margins, with Barclays down 3.8p at 160.3p, while HSBC shed 9.7p at 447.6p, and RBS lost 4.3p at 230.0p.
But gains by heavyweight miners helped limit the decline as metal prices rose on the weaker dollar in which they are priced.
Anglo American was the top FTSE 100 gainer, jumping 9.6 per cent, or 47.4p to 540.1p, while Antofagasta added 44.1p at 540.5p, and Glencore gained 12.6p at 156.9p.
And a 3 per cent rise in the gold price to $1,270 an ounce boosted precious metals miners, with Fresnillo up 9 per cent, or 81.0p to 996.5p, and Randgold Resources gaining 460p to 6,635p – despite the latter stock trading ex-dividend today.
12.30: The Footsie stayed weak at lunchtime as Bank of England policymakers once again voted unanimously to leave UK interest rates unchanged this month, matching the US Federal Reserve decision yesterday, with stocks retreating amid cautious comments on the global growth outlook.
By mid session, the FTSE 100 index was down 24.0 points, or 0.4 per cent at 6,151.5, above the day’s low of 6,125.70 but having dropped back from an early session peak of 6,220.02.
European markets were worse off, with Germany’s Dax 30 index dropping 1.7 per cent and France’s CAC 40 index down 1.3 per cent after, as expected, final eurozone February CPI numbers dented any lingering hope for any further ECB easings.
US stock futures, meanwhile, pointed to a retreat today on Wall Street following overnight gains made after the Fed decision to peg US interest rates and temper expectations for the number of rate hikes likely this year due to the risks from an uncertain global economy.
No change: The Bank of England today maintained UK interest rates at 0.5 per cent, marking time for a seventh straight year, with all nine policymakers on the MPC voting to keep rates steady at record lows
US data released today saw a 7,000 increase in weekly jobless claims to 265,000, while the Philly Fed manufacturing index turned positive for the first time in seven months, jumping to +12.4 this month from -2.8 in February.
In London, the Bank of England today maintained UK interest rates at 0.5 per cent, marking a seventh straight year at record lows, with all nine policymakers on the MPC voting to keep rates steady at where they have remained since March 2009.
In the accompanying meeting minutes, the MPC said ‘little had changed’ in its outlook for growth since it slashed its economic forecasts last month and warned the UK was being buffeted by ‘unforgiving’ conditions in the global economy.
It also said there appeared to be ‘increased uncertainty’ about the forthcoming referendum on the UK’s membership of the European Union, which caused the value of sterling to plummet against the dollar.
The committee also stood by its stance that the next move for rates would be a rise rather than a cut, stating ‘it was more likely than not that Bank Rate would need to increase over the forecast period’ to meet its inflation target of 2 per cent.
Nick Dixon, Investment Director at Aegon UK, said: ’General uncertainty may have forced the hand of the MPC to sit tight for the 84th month in a row. Global deflationary pressures spurred by declining commodity prices and negative interest rates are making investors turn bearish on economic fundamentals.
‘Closer to home, cuts to forecast growth announced in the Budget strengthen the Bank’s dovish stance and there’s certainly no rush for mortgage holders to fix their borrowing rates any time before the Autumn Statement.’
On currency markets, the pound extended its earlier gains against a weaker dollar to 1 per cent after the Bank of England decision hitting the day’s high of $1.4401, and rebounding sharply from a two-week low of $1.4053 struck yesterday, when the UK government’s 2016 Budget trimmed growth and inflation forecasts.
The pound was also higher against the euro at €1.2744 although European Union ‘Brexit concerns remained a drag.
Among equities, falls by financial stocks weighed on the blue chips reflecting interest rate factors, as low rates weigh on their margins, with HSBC down 12.2p at 445.1p, while Barclays shed 4.1p at 159.9p, and RBS lost 5.1p at 229.2p.
But gains by commodity stocks helped limit the decline as metal prices rose on the weaker dollar after the dovish Fed comments, while oil prices also benefited as major producers firmed up plans to meet in Qatar to discuss an output freeze.
As Brent crude pushed further up towards $41 a barrel, energy blue chip BP added 1 per cent, or 3.5p to 353.6p, while mid cap explorer Tullow Oil gained 0.5p to 207.7p.
Miner and commodities trader Glencore was the top FTSE 100 gainer, jumping 8.4 per cent, or 12.1p to 156.4p, while Anglo American rose 38.2p to 530.9p, and Antofagasta added 34.1p at 530.5p.
A 3 per cent rise in the gold price to $1,270 an ounce supported shares in precious metals miners, with Fresnillo up 6.6 per cent, or 61.0p to 976.5p, and Randgold Resources gaining 375p to 6,550p – despite the latter stock trading ex-dividend today.
Anglo-Australian miner Rio Tinto was also higher, ahead 4.2 per cent or 81.5p to 2,011.0p shrugging aside news that Chief Executive Sam Walsh will retire from his role in July to be replaced by Jean-Sebastien Jacques, currently the chief executive of Rio’s Copper & Coal business.
In another change at the top for a FTSE 1090 company, drugmaker GlaxoSmithKline revealed that its chief executive, Andrew Witty will step down in March 2017, with the firm starting a formal search for his successor as both internal and external candidates are to be considered. Glaxo shares were down 18.5p at 1,393.5p.
10.30: After opening higher, the Footsie beat a retreat as the morning session progressed, turning cautious as European stocks fell after disappointing eurozone inflation data, and as nerves showed ahead of the latest Bank of England rate decision at midday.
By mid morning, the FTSE 100 index was down 42.6 points, or 0.7 per cent at 6,133.5, having dropped back from an early session peak of 6,220.02.
The UK blue chip index had gained 35.5 points yesterday as stocks such as oil producers and housebuilders got a post-Budget boost.
Meanwhile US and Asian stocks rose overnight after the Federal Reserve kept US interest rates on hold and signalled fewer hikes were likely in coming months amid an uncertain global economy.
Retreat: The Footsie fell as the morning session progressed with European stocks lower after disappointing eurozone inflation data, and as nerves showed ahead of the latest Bank of England rate decision at midday
But European markets reversed sharply, with Germany’s Dax 30 index dropping 2.1 per cent and France’s CAC 40 index shedding 1.7 per cent after final eurozone February CPI numbers disappointed, dragging the Footsie lower.
Annual inflation in the region was -0.2 per cent in February, confirming initial estimates and in-line with economists’ forecast, down from 0.3 per cent in January, having been -0.3 per cent a year earlier.
Dennis de Jong, managing director at UFX.com, said: ‘The news that consumer prices in the Eurozone have fallen from a year ago will fuel concerns among economists over possible deflation.’
He added: ‘ECB president Mario Draghi has already significantly scaled back inflation projections, and he’ll be concerned with the prospect that negative interest rates may be required to fend off a slide into deflation.’
On currency markets, the pound pushed higher against the euro after the eurozone data, up 0.35 per cent to €1.2744. Sterling was also up strongly versus the dollar at $1.43.53 after yesterday’s dovish Fed comments and ahead of the Bank of England rate decision, despite another unanimous vote expected to keep UK interest rates on hold.
With UK rates pegged at record lows, today’s UK data showed a surge in mortgage lending last month, with the Council of Mortgage Lenders estimating that gross mortgage lending was £17.6billion in February, nearly 30 per cent higher than a year earlier, although down 5 per cent on January.
Among equities, gains by commodity stocks underpinned the FTSE 100 index as metal prices rose as the dollar fell on the dovish Fed comments, while oil prices also benefited as major producers firmed up plans to meet in Qatar to discuss an output freeze.
As Brent crude pushed further up towards $41 a barrel, energy blue chips BP and Royal Dutch Shell were up 5.8p to 355.9p and 11p to 1,722p respectively, while mid cap explorer Tullow Oil added 3.2p to 210.4p.
Miner Anglo American was the top FTSE 100 gainer, jumping 7 per cent, or 3535p to 528.0p, while Glencore rose 10.5p to 154.8p, and BHP Billiton added 54.3p at 817.7p.
And a 3 per cent rise in the gold price to $1.267 an ounce supported shares in precious metals miners, with Fresnillo up 5.4 per cent, or 49.5p to 965.0p, and Randgold Resources gaining 380p to 6,555p – despite the stock trading ex-dividend today.
Anglo-Australian miner Rio Tinto was also higher, ahead 4.5 per cent or 86.0p to 2,015.5p shrugging aside news that Chief Executive Sam Walsh will retire from his role in July to be replaced by Jean-Sebastien Jacques, currently the chief executive of Rio’s Copper & Coal business.
In another FTSE 100 change at the top, drugmaker GlaxoSmithKline revealed that its chief executive, Andrew Witty will step down in March 2017, with the firm starting a formal search for his successor, with internal and external candidates to be considered. Glaxo shares were down 16.5p at 1,395.5p.
British American Tobacco was the top FTSE 100 faller, down 117p to 4,000p as its shares traded ex-dividend today, together with those of property firm Hammerson, down 14p at 562p. Altogether the three stocks trading without the attractions of their latest dividend payout knocked 8.16 points off the FTSE 100 index.
InterContinental Hotels Group was also a big blue chip faller, down 2.7 per cent, or 77p to 2,729p after broker Morgan Stanley downgraded the hotel operator’s rating to equal-weight from overweight.
And financial stocks led the turn down by the blue chips on interest rate factors, as low rates weigh on their margins, with RBS losing 6.6p at 227.7p, while Barclays shed 3.4p at 160.6p, and HSBC fell 11.5p to 445.7p.
But on the second line, OneSavings Bank was one of the biggest FTSE 250 gainers, jumping 12 per cent or 30.3p to 284.5p after the challenger bank said its full year pretax profit grew to £105.3million, up from £63.7million a year earlier.
Premier Farnell was the worst mid cap performer, dropping 8 per cent or 9.5p to 112.0p after the technology products distributor saw its full year pretax profit sank to £29.2million, down from £54.1million a year earlier due to a margin squeeze caused by a strong dollar, pricing pressure and a less-favourable sales mix.
And luxury fashion retailer Ted Baker lost 45p to 2,905p as some cautious comment on the trading outlook, particularly in Asia countered solid growth in full year results.
The firm saw its annual pretax profit rise to £58.7million, up from £48.8 million the year before, as revenues grew to £456.2million from £387.6million driven by strong sales growth in North America, and said it has received a positive initial reaction to its spring/summer collections.
08.10: The Footsie pushed higher in early trading, extending the previous session’s UK Budget-induced gains as global markets got a boost overnight following dovish comments from the Federal Reserve as it left US interest rates on hold, with all eyes today on the Bank of England rate decision.
In opening deals, the FTSE 100 index was up 37.1 points, or 0.6 per cent at 6,212.6, having closed 35.5 points higher yesterday as stocks such as oil producers and housebuilders got a Budget Day boost.
US stocks rose overnight, and Asian shares gained across the board today as investor’s risk appetite revived after the Federal Reserve reduced the number of interest rate hikes expected this year.
The Fed concluded a closely watched two-day policy meeting yesterday by leaving interest rates unchanged, as expected, and signalling fewer rate hikes in coming months as the US continues to face risks from an uncertain global economy.
Yellen watch: The Fed, under boss Janet Yellen (pictured), concluded a two-day policy meeting yesterday by leaving interest rates unchanged, as expected, and signalling fewer rate hikes in coming months
Jasper Lawler, Market Analyst at CMC Markets UK, said: ’The implied number of rate hikes this year according to the Fed’s “dot plot” dropping to two from four was welcomed by markets. Two hikes this year is closer to consensus amongst economists but still more than is being priced by markets.’
He added: ‘If anything, the Fed decision to hold-off on raising rates in March has put back even further the time horizon in which the Bank of England could start to normalise monetary policy.
‘Expectations are for another 0-0-9 vote to keep interest rates unchanged. It’s hard to imagine accompanying BOE meeting minutes turning more hawkish before the June Brexit vote given Governor Mark Carney’s warnings about the risks of uncertainty.’
Global equities also found support as oil prices rose again after major producers firmed up plans to meet in Qatar to discuss an output freeze. In early London trading, Brent crude pushed further up towards $41 a barrel.
Stocks to watch in London include:
GLAXOSMITHLINE – The blue chip firm said its Chief Executive Andrew Witty would retire in 12 months time, after leading the group since 2008, prompting Britain’s biggest drugmaker to start a formal search for his successor.
RIO TINTO – The Anglo-Australian miner said Chief Executive Sam Walsh will retire from his role in July. He will be replaced by Jean-Sebastien Jacques, currently the chief executive of Rio’s Copper & Coal business.
TED BAKER – The luxury fashion retailer saw its full year pretax profit rise to £58.7million, up from £48.8 million the year before, as revenues grew to £456.2million from £387.6million driven by strong sales growth in North America, and said it has received a positive initial reaction to its spring/summer collections
SPIRE HEALTHCARE – The private hospitals operator swung to a pretax profit of £73.6million in the year to the end of December, compared to a £7.0million loss a year earlier when it booked exceptional costs related to restructuring, hospital closures and regulatory and governance costs.
ENQUEST – The company, which claims to be the largest UK independent oil producer in the UK North Sea, said its 2015 pretax loss amounted to $1.34billion in 2015, widening from a $578.7million loss reported in 2014 as a large rise in production failed to offset the fall in oil prices and impairments impacted its results.
ONESAVINGS BANK – The FTSE 250-listed ‘challenger bank’ said pretax profit for the year to the end of December rose to £105.3million, up from £63.7million a year earlier.
IMAGINATION TECHNOLOGIES – The chip designer said it will divest or shut down non-core and/or cash consuming units as well as further reducing overheads, as part of a plan to accelerate its restructuring programme.
UK company news scheduled today includes:
Finals: Ted Baker, Spire Healthcare, Enquest, OneSavingsBank, Premier Farnell, BBA Aviation, Gulf Keystone, SOCO International, Arbuthnot Banking, Capital Drilling, Quarto Group, Marshall Motor, Safestyle UK, PV Crystalox Solar, Frutarom Industries
Interims: Kier, Vernalis, Brooks MacDonald Group
Economic news scheduled today includes:
BoE rate decision, MPC minutes at 12pm
CML monthly market commentary at 9.30am
Final euro zone CPI at 10am
US weekly jobless claims at 12.30pm
US Philly Fed manufacturing index at 12.30pm