London close: Stocks fall as BoE cuts rates; Fed eyed

(Sharecast News) - London stocks ended down on Thursday as investors mulled a rate cut by the Bank of England, waded through a deluge of corporate news and looked ahead to the latest policy announcement from the Federal Reserve.

The FTSE 100 ended down 0.3% at 8,140.74, while sterling was up 0.6% against the dollar at 1.2964.

The BoE trimmed interest rates for the second time this year. The rate-setting Monetary Policy Committee voted by eight to one to reduce the cost of borrowing by 25 basis points to 4.75%.

It was the second cut so far this year, after the MPC trimmed rates for the first time in over four years in August.

Thursday's cut was widely anticipated after inflation dropped unexpectedly in September to 1.7%, the lowest rate for more than three years and below the BoE's 2% target.

The MPC kept rates on hold at 5% at its last meeting in September.

Chris Beauchamp, chief market analyst at IG, said the FTSE was weighed down by the surge in sterling and a gloomy reaction in a number of consumer-focused stocks.

"Investors are fretting that the UK's cloudy outlook is returning, and that inflation will make a return early next year," he said.

Investors were also looking ahead to the latest policy announcement from the Fed, which was due after the close of UK markets, at 1900 GMT.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: "Jerome Powell's also expected to announce a quarter point cut which equates to a whole point cut since rates peaked.

"But perhaps of more importance will be comments about the future direction of travel with markets now expecting only two further cuts in 2025, due to the impact of a fresh Trump presidency with tariff hikes and tax cuts which are expected to be inflationary."

On home shores, data out earlier from lender Halifax showed that house prices ticked up to a record high in October as mortgages became more affordable.

House prices rose 0.2% on the month following a 0.3% increase in September. On the year, prices were up 3.9% in October following a 4.6% increase the month before.

The average price of a home rose from £293,305 in September to £293,999. This was above the previous peak of £293,507 set in June 2022, towards the end of the pandemic-era "race for space".

Amanda Bryden, head of mortgages at Halifax, said: "That house prices have reached these heights again in the current economic climate may come as a surprise to many, but perhaps more noteworthy is that they didn't fall very far in the first place.

"Despite the headwind of higher interest rates, house prices have mostly levelled off over the past two and a half years, recording a 0.2% increase overall. That's a significant slowdown compared to the 21% rise we saw in the equivalent period from January 2020 to the summer of 2022."

On the corporate front, there was a veritable avalanche of news for investors to sink their teeth into.

Miners were the standout gainers as copper and iron ore prices advanced, with Antofagasta, Glencore, Rio Tinto and Anglo American all higher.

IMI rallied as it hailed a "resilient" third-quarter performance and reaffirmed its full-year adjusted earnings per share guidance.

RS Group was higher as it said its first-half performance was in line despite more challenging than expected markets.

Trainline also advanced as it posted a surge in half-year profits and revenues, after ticket sales across the UK and Europe steamed ahead.

Taylor Wimpey nudged up as it backed its full-year outlook, saying it saw steady signs of improvement in customer demand in the second half to date, as mortgage rates reduced and affordability improved.

On the downside, Auto Trader fell as it reported a solid increase in revenues and profits for the first half, but said the new car market remains challenging and gave a mixed outlook for used cars despite strong demand.

Supermarket chain Sainsbury's lost ground despite reporting increasing momentum in its second quarter and reiterating guidance for strong underlying profit growth this financial year, helped by improving grocery volumes and a stronger performance from Argos in the second half.

Hiscox was in the red even as the insurer reported a rise in written premiums for the first nine months of the year as it hailed solid retail growth.

BT Group was under the cosh as it cut its full-year revenue guidance and said pre-tax profit fell 10% in the first half.

Rolls-Royce fell even as it reiterated its full-year guidance after a solid third-quarter performance, with demand remaining strong across civil aerospace, defence and power systems markets.

ITV slid as the broadcaster reported a drop in revenue for the first nine months of the year as its Studios arm was hit by the US actors' and writers' strike.

Wood Group shares cratered as the oil services firm announced the launch of an independent review of its business that could lead to restatements and said third-quarter trading in its Projects segment was "disappointing".

The company said it was commissioning an independent review by Deloitte "following the exceptional contract write-offs relating to the exit from lump sum turnkey and large-scale EPC reported at the half year 2024 results".

This review will focus on reported positions on contracts in Projects, accounting, governance and controls, including whether any prior year restatement may be required.

Market Movers

FTSE 100 (UKX) 8,140.74 -0.32% FTSE 250 (MCX) 20,635.37 0.92% techMARK (TASX) 4,598.01 0.29%

FTSE 100 - Risers

IMI (IMI) 1,749.00p 5.42% Antofagasta (ANTO) 1,808.50p 4.75% Anglo American (AAL) 2,479.00p 3.64% Glencore (GLEN) 415.40p 3.53% Rio Tinto (RIO) 5,201.00p 3.13% Weir Group (WEIR) 2,198.00p 3.10% Spirax Group (SPX) 6,570.00p 3.06% BAE Systems (BA.) 1,382.00p 2.90% Scottish Mortgage Inv Trust (SMT) 910.80p 2.59% Sage Group (SGE) 1,032.50p 2.43%

FTSE 100 - Fallers

Auto Trader Group (AUTO) 783.00p -7.16% Sainsbury (J) (SBRY) 256.80p -4.11% Rolls-Royce Holdings (RR.) 553.20p -3.69% Hiscox Limited (DI) (HSX) 1,029.00p -3.65% BT Group (BT.A) 137.00p -3.59% Airtel Africa (AAF) 96.20p -3.56% Tesco (TSCO) 348.50p -2.46% Reckitt Benckiser Group (RKT) 4,786.00p -2.33% NATWEST GROUP (NWG) 381.10p -2.00% AstraZeneca (AZN) 9,725.00p -1.99%

FTSE 250 - Risers

RS Group (RS1) 771.50p 13.21% Indivior (INDV) 792.00p 10.61% Burberry Group (BRBY) 866.60p 7.01% Trainline (TRN) 416.60p 5.04% Fidelity China Special Situations (FCSS) 222.50p 4.46% Elementis (ELM) 134.60p 4.39% Rotork (ROR) 316.00p 3.81% The European Smaller Companies Trust (ESCT) 171.60p 3.75% BlackRock World Mining Trust (BRWM) 552.00p 3.56% Kainos Group (KNOS) 796.00p 3.51%

FTSE 250 - Fallers

Wood Group (John) (WG.) 49.84p -60.00% ITV (ITV) 62.95p -12.93% Ashmore Group (ASHM) 178.80p -10.38% Harbour Energy (HBR) 258.80p -2.83% Endeavour Mining (EDV) 1,601.00p -2.67% Helios Towers (HTWS) 106.00p -2.21% Genus (GNS) 1,920.00p -1.94% Petershill Partners (PHLL) 228.00p -1.74% Lancashire Holdings Limited (LRE) 665.00p -1.64% Hilton Food Group (HFG) 928.00p -1.28%