London open: Stocks fall as investors eye BoE announcement
London stocks fell in early trade on Thursday as investors digested the latest rate decision from the US Federal Reserve and looked ahead to a policy announcement from the Bank of England.
At 0825 BST, the FTSE 100 was down 1.2% at 6,005.76.
Matthew Luzzetti, senior economist at Deutsche Bank, said the broad messaging from the September FOMC meeting was close to expectations, with the most resounding signal being that the fed funds rate is expected to remain at zero for a long period.
"The Committee updated their forward guidance to reinforce this message, bringing it in line with their recent shift toward an average inflation targeting strategy," he said. "The 2023 median dot co-signed this message, with the fed funds rate expected to remain at zero over that horizon. Chair Powell's presser also hammered home the importance of this ‘powerful’ update to their language. With these revisions, the signal was that no further revisions are expected to forward guidance for some time."
The BoE, which makes its policy announcement at midday, is widely expected to stand pat on interest rates and the bond-buying programme.
"We will monitor any comments on the balance of risk and the latest sharpened rhetoric in the Brexit negotiations," said Danske Bank.
In equity markets, miners were weaker as copper prices fell, with Rio, BHP and Anglo American all trading lower.
Playtech shares tumbled after the gambling software company reported a slump in first-half profit following retail closures and the cancellation or postponement of sporting events due to the Covid-19 pandemic.
Informa was under the cosh after a downgrade to ‘neutral’ at JPMorgan Cazenove.
On the upside, retailer Next rallied as it posted a decline in half-year pre-tax profit to £9m from £320m but upgraded its profit guidance after sales in the first half and beyond held up better than it had expected. Next increased its central guidance for annual pre-tax profit to £300m from £195m.
FTSE 250 online trading platform IG Group gained after it posted a 62% jump in first-quarter revenue as it continued to benefit from high levels of trading activity and new client acquisition.
Drugs maker Oxford Biomedica, which has partnered with pharma giant AstraZeneca to develop a Covid-19 vaccine, was also in the black after saying it expects higher second-half revenues to push it to a low-to-single digit full-year profit.
FTSE 100 - Risers
Next (NXT) 6,268.00p 1.59%
SEGRO (SGRO) 949.00p 0.61%
Compass Group (CPG) 1,315.50p 0.46%
Homeserve (HSV) 1,276.00p 0.00%
DCC (DCC) 6,420.00p 0.00%
Pearson (PSON) 511.00p 0.00%
Flutter Entertainment (FLTR) 12,310.00p -0.08%
Rentokil Initial (RTO) 544.20p -0.18%
Ocado Group (OCDO) 2,634.00p -0.27%
Phoenix Group Holdings (PHNX) 698.80p -0.29%
FTSE 100 - Fallers
Rio Tinto (RIO) 4,911.50p -2.74%
HSBC Holdings (HSBA) 308.35p -2.73%
Scottish Mortgage Inv Trust (SMT) 940.00p -2.69%
BHP Group (BHP) 1,750.60p -2.69%
Avast (AVST) 512.50p -2.66%
Aveva Group (AVV) 4,710.00p -2.42%
BT Group (BT.A) 108.60p -2.38%
Barclays (BARC) 100.62p -2.27%
Informa (INF) 391.80p -2.27%
Anglo American (AAL) 1,941.40p -2.11%
FTSE 250 - Risers
Trainline (TRN) 392.80p 2.03%
IG Group Holdings (IGG) 799.50p 1.27%
TP ICAP (TCAP) 305.80p 1.26%
PayPoint (PAY) 632.00p 0.96%
Beazley (BEZ) 416.00p 0.87%
Pagegroup (PAGE) 383.00p 0.74%
Tate & Lyle (TATE) 694.40p 0.73%
Oxford Biomedica (OXB) 841.00p 0.72%
Dechra Pharmaceuticals (DPH) 3,268.00p 0.37%
Bellway (BWY) 2,453.00p 0.33%
FTSE 250 - Fallers
Playtech (PTEC) 361.80p -7.59%
TI Fluid Systems (TIFS) 148.46p -3.85%
Computacenter (CCC) 2,234.00p -2.95%
Royal Mail (RMG) 235.90p -2.64%
Equiniti Group (EQN) 112.40p -2.60%
Allianz Technology Trust (ATT) 2,360.00p -2.48%
Carnival (CCL) 1,003.50p -2.38%
Cineworld Group (CINE) 49.20p -2.34%
Centrica (CNA) 42.42p -2.33%
Ashmore Group (ASHM) 373.80p -2.25%