London midday: Stocks rise ahead of FOMC and BoJ policy decisions
London stocks gained on Monday ahead of key policy decisions from the Federal Reserve and the Bank of Japan later in the week.
The Fed is widely expected to keep interest rates unchanged on Wednesday but the market will be looking for clues on the timing of the next hike. Economists predict the central bank will follow the lead from the Bank of England and the European Central Bank in citing Brexit and the lack of economic data for standing pat on policy.
The BoJ, on the other hand, is expected to loosen monetary policy to boost Japan’s economy on Friday.
“The stand out central bank decision is the Bank of Japan, with high expectations in the markets that a new round of monetary stimulus will be launched,” said Craig Erlam, senior market analyst at Oanda.
“It was thought that the BoJ was exploring the idea of helicopter money, something that was firmly denied in an interview with Governor Haruhiko Kuroda last week, which took the edge off the yen weakness from the last couple of weeks. This was partially undone by the revelation that the interview was conducted in June, although it’s unlikely that his view has changed significantly since then.”
On Monday’s agenda, a survey showed optimism among UK manufacturers has fallen sharply in the wake of the UK’s vote to leave the European Union on 24 June.
The Confederation of British Industry’s latest quarterly survey revealed the business confidence index dropped to -47 from -5 in April, exceeding the -15 reading expected by analysts.
German business confidence for July came in stronger than expected, according to the IFO Institute. The business climate index came in at 108.3, down from 108.7 the previous month but comfortably ahead of economists’ expectations for a reading of 107.5.
In company news, Randgold Resources shares declined as it downgraded its full year targets due to hiccups at its Tongon mine in Cote D'Ivoire. The FTSE 100 firm said there had been extended down time on one mill as a result of poor repairs but that Tongon is set for an improved performance in the second half of this year.
William Hill was racing higher after Rank Group and 888 Holdings made a preliminary approach regarding a potential £3bn takeover for the struggling high street bookmaker.
Oil and gas stocks were under pressure, including BP and Royal Dutch Shell, as crude prices fell on worries about the global supply glut. Brent crude was down 0.70% to $45.37 per barrel and West Texas Intermediate slipped 0.75% to $43.86 per barrel at 1143 BST.
Housebuilders were among the biggest risers on the FTSE 100, including Taylor Wimpey, Barratt Developments and Persimmon.
Market Movers
FTSE 100 (UKX) 6,723.17 -0.11%
FTSE 250 (MCX) 17,117.61 0.79%
techMARK (TASX) 3,418.98 0.15%
FTSE 100 - Risers
3i Group (III) 606.50p 2.62%
Taylor Wimpey (TW.) 150.10p 2.18%
Barratt Developments (BDEV) 419.10p 1.97%
St James's Place (STJ) 886.50p 1.84%
Next (NXT) 4,961.00p 1.83%
Persimmon (PSN) 1,626.00p 1.75%
Burberry Group (BRBY) 1,320.00p 1.62%
BT Group (BT.A) 390.10p 1.59%
Schroders (SDR) 2,618.00p 1.43%
Tesco (TSCO) 162.00p 1.38%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 8,690.00p -1.81%
Rolls-Royce Holdings (RR.) 709.50p -1.53%
Royal Dutch Shell 'B' (RDSB) 2,116.00p -1.49%
Fresnillo (FRES) 1,805.00p -1.42%
TUI AG Reg Shs (DI) (TUI) 909.50p -1.25%
Royal Dutch Shell 'A' (RDSA) 2,067.50p -1.17%
Lloyds Banking Group (LLOY) 53.87p -1.14%
BP (BP.) 447.90p -0.93%
Mediclinic International (MDC) 1,087.00p -0.91%
Barclays (BARC) 150.50p -0.86%
FTSE 250 - Risers
William Hill (WMH) 336.70p 7.37%
IP Group (IPO) 160.90p 5.44%
Daejan Holdings (DJAN) 5,495.00p 4.97%
Euromoney Institutional Investor (ERM) 994.50p 3.92%
CYBG (CYBG) 250.90p 3.85%
Softcat (SCT) 344.30p 3.46%
DFS Furniture (DFS) 218.00p 3.42%
Keller Group (KLR) 1,022.00p 3.23%
Wizz Air Holdings (WIZZ) 1,474.00p 3.22%
Kaz Minerals (KAZ) 140.40p 3.08%
FTSE 250 - Fallers
Cairn Energy (CNE) 182.70p -3.54%
Centamin (DI) (CEY) 154.20p -2.90%
Vesuvius (VSVS) 331.70p -2.38%
Serco Group (SRP) 115.60p -1.87%
Acacia Mining (ACA) 549.00p -1.79%
BTG (BTG) 663.00p -1.56%
Petrofac Ltd. (PFC) 780.00p -1.45%
Amec Foster Wheeler (AMFW) 467.70p -1.43%
Tullow Oil (TLW) 209.90p -1.04%
Wood Group (John) (WG.) 673.00p -1.03%