By Carla Mozee, MarketWatch
Standard Chartered lands ratings upgrade
LONDON (MarketWatch) -- Stocks rose in London Wednesday, but the
pound was shoved lower against the dollar as slower-than-expected
wage growth and dovish comments from the Bank of England
underscored expectations the central bank will keep interest rates
on hold.
Sterling: The pound (GBPUSD) fell to $1.4659 from $1.4749,
knocked back to levels last seen in mid-2010. The pound late
Tuesday was trading around $1.4750. Wednesday's drop came after
minutes from the Bank of England's March policy meeting showed
officials are concerned a rise in the pound against currencies of
the U.K.'s key trading partners will weigh on prices for imported
goods, keeping inflation levels lower for longer.
Annual inflation in January was 0.3%, well below the bank's 2%
target, giving little reason for the central bank to raise its
benchmark rate from the record low rate of 0.5%. All nine policy
members in March voted to hold the rate steady.
At the same time, January data from the Office for National
Statistics showed annual wages grew by 1.6% excluding bonuses.
Analysts polled by FactSet had expected growth of 1.8%.
"The recent positive run of earnings data has countered the low
headline inflation readings, but this lower wage growth is now
concerning," wrote Alex Edwards, head of the corporate desk at
UKForex, in a note.
Heading into the BOE minutes, "there was an ounce of expectation
that they wouldn't sound as dovish as last time around," said
Edwards. Now, the $1.4650 level "is likely provide protection and
the sellers will be a little cautious ahead of tonight's much
anticipated Fed statement," he added.
The Federal Reserve's policy statement is due after trading
closes in the U.K., and there's concern the central bank will
indicate it'll begin raising interest rates this summer.
Against the shared European currency, the pound (GBPEUR) pound
was buying 1.3816 euros compared with around EUR1.3912 late
Tuesday.
Stocks: The FTSE 100 rose 0.6% to 6,881.52, pushing higher after
the jobs data and the BOE minutes. Investors will turn their
attention to Chancellor of the Exchequer George Osborne, who is
expected to present the U.K. government's 2015 budget to lawmakers
around 12:30 p.m. London time, or 8:30 a.m. Eastern Time.
The governing coalition's final budget comes not long before the
U.K. general election in May.
"We could well see some small moves on the pound or the FTSE,
but more likely is the opportunity to get a clearer picture of just
where the Conservatives are placed in terms of the general
election," said James Hughes, chief market analyst, at eToro, in a
note.
Shares of Standard Chartered PLC led advancers, surging 6.3%
after the Asia-focused bank was upgraded to overweight from equal
weight at Barclays. Also, AstraZeneca PLC (AZN) rose 1.6% following
favorable data from a late-stage study of PT003 aimed at treating
lung function in patients with Chronic Obstructive Pulmonary
Disease.
Shares of Barclays PLC (BCS) rose 0.9% following a Wall Street
Journal report
(http://www.wsj.com/articles/citigroup-barclays-close-to-settling-forex-lawsuit-with-private-investors-1426614947?mod=rss_whats_news_us)
that the British bank and Citigroup PLC (C) are moving closer to
settling a lawsuit with private investors who claimed they
manipulated foreign-exchange rates. The banks may pay as much as
$800 million combined to settle the lawsuit.
Decliners on the FTSE 100 were led by miner Fresnillo PLC ,
whose shares fell 4%.
(http://www.marketwatch.com/story/sainsbury-bhp-guide-ftse-100-higher-but-antofagasta-falls-2015-03-17)
Subscribe to WSJ: http://online.wsj.com?mod=djnwires