LONDON (SHARECAST) - - All eyes on the ECB and Draghi
techMARK 2,094.17 +0.35%
FTSE 100 5,690.52 +0.58%
FTSE 250 11,536.49 +0.79%
- BoE keeps rates and QE unchanged
- Economic data from the US also in focus
Just a handful of stocks on London's Footsie were in the red by Thursday lunchtime as markets geared up to a pivotal policy announcement by the European Central Bank (ECB).
The UK's Monetary Policy Committee (MPC) did what was largely expected and maintained its Bank Rate at 0.5% and asset purchase programme at £375bn in its policy announcement at noon. The Bank of England injected £50m of additional quantitative easing in July which is not due to be completed until the end of October.
All eyes are on ECB President Mario Draghi who is expected to reveal details of the bank's bond-buying programme to bring down yields in peripheral nations.
"The markets have been buoyed by Draghi’s original comments for more than a month now so anything short of total commitment by the ECB and full disclosure of the details is likely to be received with disappointment," said analyst Craig Erlam from Alpari.
According to media reports yesterday afternoon, unnamed central bank officials have said that Draghi will announce unlimited purchases of short-dated government debt (with maturities of up to three years) that will be sterilised, though the ECB would refrain from setting a public cap on yields.
However, according to Michael Fuchs from Merkel’s Christian Democratic Union party yesterday, Germany would oppose the ECB’s bond-buying plan if it purchases “too much” sovereign debt without ensuring that these nations agree to strict conditions.
While the ECB decision will undoubtedly be the 'big event' of the day, markets will also be watching some key economic data from the US - non-farm payrolls, jobless figures, ISM non-manufacturing - which could affect next week's decision from the Federal Reserve on whether of not to print more money.
FTSE 100: Whitbread and Morrisons impress early on
Hotel, restaurant and Costa coffee owner Whitbread jumped in the opening hour after reporting second-quarter sales growth of 14.8%, up from 13.9% in the first three months of the year. Investec said that the Whitbread "offers compelling value for a stock with impressive roll-out potential, strong asset backing and impressive trading momentum."
Supermarket group Morrisons also rose after pre-tax profits in the first half came in 3% ahead of consensus estimates. Jefferies said this morning that the stock is trading at an "unjustified" discount to supermarket peers in the UK and Europe.
Mining stocks were also in demand early on with investors hoping that additional stimulus measures in Europe could provide a boost to the global economy. Antofagasta, Fresnillo and Vedanta were among the best performers while Randgold was gaining as gold prices rose to a five-month high.
Car insurer Admiral was among the few stocks registering losses as shares continue to fall following the group's first-half results last week. Exane BNP Paribas reiterated its 'underperform' rating on the stock this morning.
FTSE 250: Lonmin gains on union deal
South Africa-focused platinum miner Lonmin rose strongly on reports that it has reached an agreement with some of its labour unions following a wave of protests over the last few weeks.
Electrical retailer Dixons rose after saying it made an "encouraging" start to the year with decent growth in the UK, Ireland and Northern Europe, though trading in Southern Europe continues to be tough.
easyJet gained after reporting that it carried 6% more passengers in August. Yesterday the firm also announced that it would introduce allocated seating in its planes.
FTSE 100 - Risers
Whitbread (WTB) 2,205.00p +5.05%
Randgold Resources Ltd. (RRS) 6,760.00p +4.72%
Antofagasta (ANTO) 1,138.00p +3.83%
Polymetal International (POLY) 993.50p +3.81%
Vedanta Resources (VED) 903.00p +2.96%
Evraz (EVR) 217.70p +2.93%
Eurasian Natural Resources Corp. (ENRC) 304.70p +2.90%
Fresnillo (FRES) 1,682.00p +2.69%
Morrison (Wm) Supermarkets (MRW) 288.20p +2.67%
Rio Tinto (RIO) 2,784.00p +2.43%
FTSE 100 - Fallers
Imperial Tobacco Group (IMT) 2,378.00p -1.16%
Burberry Group (BRBY) 1,314.00p -0.98%
Tate & Lyle (TATE) 645.50p -0.92%
Admiral Group (ADM) 1,119.00p -0.62%
Smith & Nephew (SN.) 669.50p -0.52%
Croda International (CRDA) 2,418.00p -0.45%
Shire Plc (SHP) 1,934.00p -0.41%
Vodafone Group (VOD) 175.80p -0.40%
AstraZeneca (AZN) 2,911.00p -0.34%
British Sky Broadcasting Group (BSY) 757.50p -0.33%
FTSE 250 - Risers
Lonmin (LMI) 558.00p +5.38%
Avocet Mining (AVM) 91.10p +4.95%
Centamin (DI) (CEY) 81.25p +4.43%
New World Resources A Shares (NWR) 283.90p +4.41%
Ferrexpo (FXPO) 153.80p +4.27%
Aquarius Platinum Ltd. (AQP) 35.90p +4.06%
Barr (A.G.) (BAG) 467.80p +3.91%
Travis Perkins (TPK) 1,068.00p +3.69%
NMC Health (NMC) 192.30p +3.39%
Taylor Wimpey (TW.) 56.20p +3.31%
FTSE 250 - Fallers
Ruspetro (RPO) 120.30p -2.12%
Menzies(John) (MNZS) 612.50p -1.84%
Britvic (BVIC) 363.20p -1.81%
Bumi (BUMI) 265.60p -1.15%
Dunelm Group (DNLM) 572.00p -1.12%
Rank Group (RNK) 129.10p -1.07%
PayPoint (PAY) 700.00p -1.06%
JPMorgan Asian Inv Trust (JAI) 175.00p -1.02%
Home Retail Group (HOME) 96.30p -0.98%
Ted Baker (TED) 965.00p -0.92%