LONDON (SHARECAST) - 1630:Close Bank of England policy makers voted unanimously in September to keep interest rates on hold and its asset purchase scheme at its current level. The latest details of their meeting showed most members found the decision to keep QE as is "relatively straightforward". Meanwhile, UK financial watchdog, the FSA, revealed that it had warned Barclays in 2010 that Bob Diamond might be unsuitable to become the bank's Chief Executive. Looking abroad, the Bank of Japan took markets by surprise this morning with the announcement that it will increase the size of its asset purchase fund to 55trn Yen (£77.46bn), from 45trn before. In UK companies, United Utilities rose on the back of renewed speculation over a potential takeover. The FTSE 100 closed up 20 points at 5,888.
16:06 Brent oil futures for November delivery are down by 3.168 dollars at the moment, at 108.59 on the ICE. That after the latest US Department of Energy weekly oil inventory report showed an unexpectedly large build of 8.5m barrels. That is behind the drop we are now seeing in shares of Tullow Oil and Petrofac. FTSE 100 up 12 to 5,880.
1343: Imperial Tobacco is off after yesterday´s gains and this is what analysts at Charles Stanley have to say about the technical outlook of its shares: The fact that this minor rally has been driven by rising volumes looks quite promising and although it’s not easy to judge how much further it might have to go in the near term the chart is implying that there could still be scope for a run up to around 2480p or so before it runs out of steam." FTSE 100 up 10 to 5,878.
1332: US housing starts for the month of August have come in below forecasts, although the weakness was not concentrated on single-family homes, which is a positive. Building permits have come in slightly better than forecast, at 803,000 (Consensus: 796,000). S&P´S Kraemer has said that a downgrade of Spanish debt to junk level is unlikely in the near future. Worth taking into account perhaps, ARM Holdings is testing intermediate term resistance after completely retracing its most recent falls. FTSE 100 up 6 to 5,874.
1135: FTSE 100 is down 3 at 5,871. The feel-good factor engendered by the Bank of Japan's unexpected decision to expand its quantitative easing programme has dissipated. Banks are on the slide with investors banking recent gains. Insurance giant Aviva, which is sharply lower after going ex-dividend today, is reportedly mulling the closure of its global real estate investment trust (REIT) business. The company has apparently sent clients a letter saying the business is under review because its scale prevents it from competing on the international level.
0934: The Bank of England's policy setting team, the Monetary Policy Committee (MPC), voted unanimously at its September meeting in favour of keeping the bank rate and asset purchase programme unchanged. 'The rise in oil prices and the probable increase in utility and some food prices meant that the near-term outlook was for a less rapid fall in inflation than the Committee had thought at the time of its August Inflation Report projections. The outlook for inflation beyond that point continued to depend on the strength of the headwinds confronting both demand and supply, and the effectiveness of policy measures in the United Kingdom and abroad in leaning against them,' the minutes from the September meeting said. The MPC continued to judge that there was a substantial margin of spare capacity in the economy, particularly in the labour market. FTSE 100 is up 7 at 5,875.
0914: The Bank of Japan's surprise decision to expand its quantitative easing programme has lit a fire under equity markets, and is driving demand for miners. Even the usual Wednesday morning glut of big stocks going ex-dividend cannot prevent Footsie from making headway. FTSE 100 is up 12 at 5,880, with the top-share index coming off the in the last ten minutes or so. Results from Smiths Group have been well received, as well they might be, as all the big numbers from the technology group came in ahead of expectations.
0811: Miners are in demand in the early going, none more so than platinum miner Lonmin as the industrial dispute at its Marikana operations has been resolved. The workers are set to return to work on Thursday after a pay deal was thrashed out late on Tuesday. Lonmin's banking covenants have been put under severe strain by the interruption to production, and the company is still not out of the woods yet in that respect. Lonmin said it would update the market on the wider implications of the agreement, including its financial impact in due course. FTSE 100 is up 17 at 5,885.
