Digital Look WebFG News | 15 Jun, 2017 17:46 - Updated: 17:46 | | |
London stocks were diving amid a cruel sea of tumbling UK equities indices after the Bank of England held its benchmark interest rate but surprised with a more hawkish stance than expected.
At the end of Thursday trade, the FTSE 100 was down 0.74% to 7,419.36, and the FTSE 250 was down a massive 2.11% to 19,553.66. European indices were also down, as were those on Wall St.
BoE policymakers voted 5-3 in favour of holding rates. They also held the asset-purchase programme at £435bn. Views were for a 7-1 split among policymakers in the Monetary Policy Committee.
Sterling raced ahead on the news, something it was rather unfamiliar with following last year's non-binding Brexit referendum.
This came after the US Federal Reserve raised its benchmark rate last night, and flagged it was going to start reducing its balance sheet.
"Central banks have played havoc with the FTSE 100 today," opined David Madden, market analyst at CMC Markets UK.
"The market was caught off guard by the (MPC) voting breakdown, as the disappointing UK earnings figures yesterday led traders to believe that the BoE would be dovish today."
There was also the matter of the UK's hung parliament, after PM Theresa May's Tories performed far worse than expected at the ballot last week.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said said the BoE looked out of step to be seriously considering raising interest rates, when economic data is pointing towards a consumer slowdown.
"Indeed the central bank has itself highlighted weaker consumer spending as a key risk to the UK economy, so now this particular chicken is coming home to roost, it’s strange that the BoE is thinking about releasing the foxes.
"For the moment the balance of power still rests with the doves in the MPC however, and it’s worthy of note that expectations of an interest rate rise have been confounded for many years now."
Sticking with politics, the Leader of the House of Commons has confirmed the opening of parliament and Queen's speech had been pushed back to 21 June.
With talks over a potential agreement between the Tories and the DUP stumbling, commentators suggested the announcement on the Queen's speech was intended as a message that the Tories were prepared to form a minority government without a deal if the talks broke down.
Disappointing UK retail sales also took their toll, with data from the Office for the National Statistics showing sales shrank much more than expected in May.
On specific stocks, DFS furniture warned full-year earnings would be below market expectations due to a weakened trading environment, hurting its shares and those of Next, Kingfisher, Marks & Spencer, Tesco. Next was also hit by a downgrade at Credit Suisse.
Persimmon, Severn Trent and Restaurant Group retreated as their stock went ex-dividend, while InterContinental Hotels was knocked lower by a downgrade from Morgan Stanley.
Sky said itself and Liberty Global's Virgin Media were forming a strategic partnership that would enable businesses of varying sizes to benefit further from "advanced television advertising,", across both the Virgin TV and Sky platforms.
Precious metals miners Fresnillo and Randgold Resources were falling as gold prices declined following the Fed's interest-rate hike and more hawkish than expected tone last night.
Later this evening, Chancellor Philip Hammond's annual Mansion House speech was expected to argue the case for a softer, more pragmatic Brexit that would protect jobs and economic growth.
He would also, according to reports, outline Treasury's plans to ensure infrastructure projects and business start-ups that currently received support from EU funds would be able to get UK support instead.
FTSE 100 - Risers
Ashtead Group (AHT) 1,600.00p 1.46%
HSBC Holdings (HSBA) 686.70p 0.88%
Royal Bank of Scotland Group (RBS) 251.50p 0.64%
London Stock Exchange Group (LSE) 3,655.00p 0.63%
Prudential (PRU) 1,773.50p 0.31%
Unilever (ULVR) 4,250.00p 0.19%
Lloyds Banking Group (LLOY) 67.99p 0.13%
Sage Group (SGE) 698.00p -0.00%
GlaxoSmithKline (GSK) 1,684.00p -0.03%
Reckitt Benckiser Group (RB.) 7,860.00p -0.06%
FTSE 100 - Fallers
Fresnillo (FRES) 1,558.00p -7.26%
Persimmon (PSN) 2,259.00p -6.73%
Next (NXT) 4,037.00p -6.14%
Anglo American (AAL) 995.10p -6.03%
Randgold Resources Ltd. (RRS) 7,100.00p -4.89%
Marks & Spencer Group (MKS) 351.80p -4.74%
Mediclinic International (MDC) 779.50p -3.65%
International Consolidated Airlines Group SA (CDI) (IAG) 584.00p -3.39%
Severn Trent (SVT) 2,402.00p -3.26%
Tesco (TSCO) 179.95p -3.20%
FTSE 250 - Risers
CLS Holdings (CLI) 209.30p 6.79%
Petrofac Ltd. (PFC) 421.00p 3.92%
IP Group (IPO) 139.90p 3.02%
Daejan Holdings (DJAN) 6,335.00p 1.90%
Metro Bank (MTRO) 3,724.00p 1.09%
Syncona Limited NPV (SYNC) 152.00p 0.99%
TalkTalk Telecom Group (TALK) 177.00p 0.91%
P2P Global Investments (P2P) 908.00p 0.83%
Barr (A.G.) (BAG) 644.50p 0.70%
HarbourVest Global Private Equity Limited A Shs (HVPE) 1,275.00p 0.63%
FTSE 250 - Fallers
Marshalls (MSLH) 378.40p -8.22%
Crest Nicholson Holdings (CRST) 551.00p -6.45%
Petra Diamonds Ltd.(DI) (PDL) 115.40p -6.33%
Dunelm Group (DNLM) 600.50p -6.17%
Wizz Air Holdings (WIZZ) 2,277.00p -6.10%
Hochschild Mining (HOC) 264.10p -6.05%
Restaurant Group (RTN) 329.30p -5.91%
Pets at Home Group (PETS) 154.90p -5.72%
Evraz (EVR) 175.50p -5.65%
Ted Baker (TED) 2,345.00p -5.63%
Stocks reversed early gains as investors opted to play it safe going into the weekend and the euro edged a tad higher on the back of the political gyrations on Capitol Hill.
Stocks have started the morning trading slightly higher, tracking overnight gains on Wall Street but analysts are worried about buying into Thursday's bounce.
London's top flight index slipped on Friday, but managed to finish well-off its lows of the session despite renewed Brexit angst as the pound gave back early gains.
DIY retailer Kingfisher has more "reasons to be cheerful" thanks to an improving French outlook, analysts at RBC Capital Markets said on Friday, while clothes seller Supergroup remains "compelling" but its shares have gained a lot in recent weeks.
Real estate investment group Alpha Real Trust saw its net asset value (NAV) rise in its first half of trading as it moved to make further investments in build-to-rent projects.
Industrial and logistics-focussed real estate investment trust Pacific Industrial & Logistics has completed the sale of an asset located at Hammond Road, Bedford, for a total consideration of £5.8m, it announced on Friday.
DP Poland, which holds the exclusive master franchise for the Domino’s Pizza brand in Poland, celebrated the opening of its 50th location in the country on Friday.
National investment group Mercia Technologies has made a new direct investment into Aston EyeTech - a spinout from Aston University, Birmingham - which has developed a range of proprietary hardware and software products in ocular care, it announced on Friday.
Modelling, simulation and training solutions provider SimiGon has now received final regulatory approval for a $2m purchase order received from the Israeli Air Force, initially announced on 20 June 2016, it confirmed on Friday.
Agricultural investment group Agriterra saw losses widen in the first half of its trading year as subdued demand for its maize flour products slashed revenues by more than a third.