| London stocks were steady in early trade on Thursday as investors looked ahead to the latest rate announcements from the Bank of England and the European Central Bank.
Investors are expecting no change to the interest rate or the asset purchase programme from the BoE, which hiked interest rates last month for the first time since the credit crisis.
CMC Markets analyst David Madden said: “The recent solid growth figures and the impressive earnings report vindicates the central bank for hiking rates. Not long after the hike, we heard from Mark Carney, the BoE chief, who essentially said we could see one rate hike per year for the next few years. This week it was confirmed that Mr Carney will stay on in his role to provide stability.
“The developments regarding the UK’s exit from the EU is having a bigger impact on the pound than the economic updates, and dealers will be paying close attention to the situation.”
The BoE rate announcement is at 1200 BST, while the ECB will also announce its latest policy decision at 1245 BST, with no changes expected there either.
Madden said: “The ECB made it clear they are keen to wind down the remainder of the bond-buying scheme at the end of this year, and traders will be listening carefully to any commentary regarding this matter. The latest inflation figures from the eurozone showed a slight pullback in the cost of living, and this will be a bit of a worry for Mario Draghi, the head of the ECB, as demand diminished.”
In corporate news, GVC Holdings was the standout gainer after it posted a jump in half-year pre-tax profit as revenue rose amid strong momentum in the online and European retail segments and thanks to a boost from the World Cup, as it identified further cost savings from its Ladbrokes Coral acquisition.
Legal & General was in the green as it completed a £4.4bn buy-in for the British Airways pension scheme, ‘Airways Pension Scheme’ (APS), covering nearly 22,000 pensioners.
Morrisons fell even as it more than doubled its interim dividend after like-for-like sales in the first half grew at the fastest rate since 2009. Group LFL sales excluding-fuel were up 4.9% in the six months 5 August after an acceleration to 6.3% in the second quarter from the 3.6% in the first.
Debenhams dropped after Sports Direct clarified overnight that it does not currently intend to bid for the struggling department store chain, in which it has a 29% stake. Sports Direct shares were also weaker.
In broker note action, Kaz Minerals was upgraded to ‘buy’ at HSBC, while Antofagasta was lifted to ‘hold’.
Aviva was started at ‘add’ by Investec, while Diageo was added to Citi’s focus list for Europe and N Brown was downgraded to ‘hold’ at Stifel.
Ex-dividends took 0.25 points off the FTSE 100 and 11 points off the FTSE 250, with Assura, BBA Aviation, BCA Marketplace, Bakkavor, Cineworld, Computacenter, Derwent, Equiniti, Gocompare, Inmarsat, and Melrose Industries all in the frame. |
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