LONDON (SHARECAST) - 1630: BofE policymaker Ben Broadbent has admitted that the bank's ability to ease monetary policy is limited by higher-than-expected inflation. Speaking in an interview published in the Northern Echo newspaper on Thursday, he said: "If one hears politicians saying life would be better if we had more monetary easing, well the truth is you always hear that from government. We are in a position where we can judge it for ourselves, but we are limited." Meanwhile, Next shares lost over seven per cent of their value after the company said the trading outlook was tough and second half sales had so far been disappointing. Miners were also dragging the index lower after the leader of striking platinum miners in South Africa called for a general strike to "bring mining companies to their knees". Despite this, the FTSE 100 rose 38 points to close at 5,820.
1600: As the US Federal Reserve decision on QE3 creeps closer stocks are mixed as investors err on the side of caution. Some think more QE would be a game-changer, while critics say it will not actually provide any real benefits. Simon Furlong, a trader at Spreadex, said the fact US unemployment figures were slightly worse than expected today added to speculation that QE3 will be announced this evening. Half an hour before close the FTSE100 was up 30 points at 5812.
1511: The FTSE 100 has extended gains, now up 2 points at 5,806. Thanos Catsambas, who is Greece’s representative on the IMF board, said today: ‘Greece will require additional financing, which may take the form either of Official Sector Involvement or of additional loans, hopefully on more favourable terms.’
1436: US stock markets have opened mixed with the Dow and S&P 500 showing slight losses and the Nasdaq making small gains. Markets are cautious ahead of the Fed decision in three hours’ time and the following press conference by Chairman Ben Bernanke. In London, aerospace engineer Rolls-Royce is leading the risers (up 2.6 per cent) as sector peer BAE Systems heads the other way (down 7.4 per cent), pulling back after confirming yesterday that it is in talks with French aerospace giant EADS about a merger. BAE was downgraded by Investec, Societe Generale and Oriel Securities today. The FTSE 100 is up four points at 5,786.
1419: The FTSE 100 has picked up and it trading in the blue, up 12 points at 5,795, despite US stock futures pointing to a weak start on Wall Street ahead of the Fed decision. Initial jobless claims rose 15,000 to a seasonally adjusted 382,000 last week, according to the Labour Department. The consensus estimate was for a smaller rise to 370,000. ‘We do not interpret the higher-than-expected outturn in claims as a sign that labor market conditions are weakening since the Labor Department reported that claims were pushed higher partially as a result of Tropical Storm Isaac and the seasonal distortions associated with a shortened holiday work week,’ said analyst Michael Gapen from Barclays Research.
1027: The FTSE 100 is trading eight points lower at 5,774 as investors continue to show caution ahead of the outcome of the FOMC meeting later on. According to analyst Henry Skeoch from Barclays Research: 'Markets appear to be pricing in a high probability of the announcement of a round of monetary stimulus, as evidenced in part by the dollar selling off following the downside surprise to the non-farm payrolls release last Friday. As such, should the Fed fall short of market expectations, there may be risks of a reversal of the recent strong performance in risk assets and sharp sell-off in core rates.' Meanwhile, uncertainty regarding to the Eurozone is also weighing on sentiment. According to Panicos Demetriades, a member of the ECB Governing Council, the bank may not have to buy any government debt. He said that the threat of unlimited bond-buying may mean that 'in the end, action is not needed'.
0904: Miners drag the top-share index lower. Sentiment towards the sector has been soured by news that Aussie iron ore producer, Forstecue, is having financial difficulties rolling over its debt. Yesterday's euphoria over a possible BAE Systems and EADS tie-up has faded today, with BAE giving back a chunk of yesterday's gains. FTSE 100 is down 9 at 5,773.
0805: Footsie has opened little changed, ahead of the outcome of the US Federal Reserve's policy-making committee meeting later today. Fashion firm Next is getting clobbered, as it reported a decline in first half like-for-like sales. Marks & Spencer falls in sympathy. FTSE 100 is down 5 at 5,777.
