London open: FTSE falls ahead of BoE rate decision
London stocks fell in early trade on Thursday following a downbeat session on Wall Street, as investors mulled the latest rate decision from the US Federal Reserve and looked ahead to a policy announcement from the Bank of England.
At 0905 GMT, the FTSE was down 0.5% at 7,532.63, while sterling was up 0.4% against the dollar at 1.2321.
On Wednesday, the Fed hiked rates by 25 basis points despite recent turmoil in the banking sector.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "With the banking sector not out of the woods and central bank and US treasury officials still on edge, uneasy about what may lie ahead, a sense of nervousness is still hanging over the markets. The FTSE 100 has opened in negative territory, following in Wall Street’s footsteps, with the S&P 500 closing sharply lower, as the Federal Reserve raised rates but signalled a pause was on the horizon given recent turmoil.
"Because contagion has been contained, and inflation is still far too high, the Federal Reserve stuck to its plan and lifted rates by 0.25%. Achieving price stability is still the top priority, given the pain high prices have been causing right through the economy. However, policymakers are highly attuned to the consequences that the banking scare will have on lending, and so the path of further hikes from here now looks much more uncertain, with perhaps only one more rate rise likely.
"Like the Fed, Bank of England policymakers are expected to keep their hands off the pause button for now. There had been hopes that inflation could have retreated from its double-digit heights, but the lurch upwards of consumer prices in February to 10.4% is likely to refocus minds on the need to dampen down demand further and rein in the price spiral."
The BoE will make its rate announcement at midday.
In equity markets, Schroders, Prudential, Pearson and Close Brothers all lost ground as they traded without entitlement to the dividend.
Inchcape slumped even as the automotive distributor reported a rise in annual earnings driven by growth in new and used vehicle sales and higher prices.
Informa was knocked lower by a downgrade to ‘equalweight’ at Morgan Stanley.
On the upside, Puretech Health surged after US-listed Royalty Pharma bought an interest in the company’ royalty in Karuna Therapeutics' KarXT drug for up to $500m.
Bulmers and Magners owner C&C Group fizzed higher after saying it expects to report a jump in full-year revenues and operating profit despite a challenging backdrop, and to resume dividend payments later in the year.
Darktrace was boosted by an initiation at ‘buy’ at HSBC.
FTSE 100 (UKX) 7,532.63 -0.45%
FTSE 250 (MCX) 18,736.36 -0.11%
techMARK (TASX) 4,537.75 0.05%
FTSE 100 - Risers
Endeavour Mining (EDV) 1,830.00p 2.18%
NATWEST GROUP (NWG) 273.50p 1.60%
Antofagasta (ANTO) 1,560.50p 1.56%
Fresnillo (FRES) 737.20p 1.40%
Anglo American (AAL) 2,636.00p 1.23%
3i Group (III) 1,587.50p 1.18%
Melrose Industries (MRO) 155.70p 1.01%
Glencore (GLEN) 453.85p 0.82%
BAE Systems (BA.) 964.60p 0.69%
Centrica (CNA) 103.90p 0.68%
FTSE 100 - Fallers
Schroders (SDR) 445.70p -3.82%
Informa (INF) 674.20p -2.68%
British American Tobacco (BATS) 2,912.50p -2.56%
Convatec Group (CTEC) 218.00p -2.50%
Pearson (PSON) 810.00p -1.77%
Smith & Nephew (SN.) 1,158.50p -1.61%
HSBC Holdings (HSBA) 556.80p -1.38%
CRH (CDI) (CRH) 4,074.00p -1.33%
Relx plc (REL) 2,574.00p -1.19%
Ashtead Group (AHT) 5,046.00p -1.14%
FTSE 250 - Risers
PureTech Health (PRTC) 224.50p 10.59%
Energean (ENOG) 1,205.00p 7.88%
Darktrace (DARK) 280.70p 3.77%
C&C Group (CDI) (CCR) 154.00p 2.80%
Centamin (DI) (CEY) 102.40p 2.50%
BlackRock Smaller Companies Trust (BRSC) 1,316.00p 2.33%
BlackRock World Mining Trust (BRWM) 660.00p 2.33%
Ithaca Energy (ITH) 153.30p 1.93%
Vistry Group (VTY) 746.00p 1.77%
Softcat (SCT) 1,148.00p 1.77%
FTSE 250 - Fallers
Inchcape (INCH) 812.00p -6.34%
OSB Group (OSB) 469.40p -6.31%
Baltic Classifieds Group (BCG) 144.40p -3.09%
Wood Group (John) (WG.) 198.35p -3.01%
Close Brothers Group (CBG) 898.50p -2.65%
CLS Holdings (CLI) 130.00p -2.40%
Chemring Group (CHG) 276.00p -2.30%
Hikma Pharmaceuticals (HIK) 1,667.00p -2.26%
Essentra (ESNT) 174.60p -1.80%
SThree (STEM) 437.50p -1.69%