London open: Stocks fall ahead of BoE rate announcement; Ocado surges

(Sharecast News) - London stocks fell sharply in early trade on Thursday as investors eyed another rate hike by the Bank of England. At 0905 BST, the FTSE 100 was down 1.3% at 7,460.37.

Expectations have grown that the BoE could hike rates by as much as 50 basis points later, after data released on Tuesday by the Office for National Statistics showed that consumer price inflation was steady at 8.7% in May versus expectations for a decline to 8.4%. Meanwhile, core inflation rose to a 31-year high of 7.1% from 6.8% in April. Analysts were expecting it to be unchanged.

Victoria Scholar, head of investment at Interactive Investor, said: "European markets are under pressure following a sell-off on Wall Street. Fed Chair Jay Powell suggested that further rate hikes could be on the cards stateside. Almost every stock on the FTSE 100 is in the red with banks like Barclays, Standard Chartered and HSBC near the bottom of the index.

"The Bank of England is expected to raise interest rates again for the thirteenth consecutive time to the highest level since 2008. However, the market is divided over whether the central bank will carry out a 25-basis point move to 4.5% or whether it will opt for a more aggressive 50 basis point increase to 4.75% in light of yesterday's sticky inflation data and recent hefty wage growth figures. Ex-Bank of England policymaker Sir Charlie Bean told the BBC's Today programme that Brexit is pushing up inflation and he would vote for a half a percentage point hike today."

In equity markets, Airtel Africa, United Utilities, 3i Group, British Land, Mitie, Tate & Lyle and Discoverie all fell as they traded without entitlement to the dividend.

Premier Inn owner Whitbread also lost ground even as it posted a jump in first-quarter sales and said consumer demand in the UK has remained strong.

On the upside, online supermarket Ocado surged amid speculation it could be takeover target for Amazon.

Market Movers

FTSE 100 (UKX) 7,460.37 -1.31% FTSE 250 (MCX) 18,430.66 -0.76% techMARK (TASX) 4,462.67 -1.34%

FTSE 100 - Risers

Ocado Group (OCDO) 483.80p 12.51% Berkeley Group Holdings (The) (BKG) 3,904.00p 1.38% Smurfit Kappa Group (CDI) (SKG) 2,672.00p 0.30% Smith (DS) (SMDS) 290.70p 0.17% Taylor Wimpey (TW.) 104.60p 0.10% Haleon (HLN) 322.90p 0.08% Croda International (CRDA) 5,318.00p 0.00% Hiscox Limited (DI) (HSX) 1,092.00p 0.00% Barratt Developments (BDEV) 425.20p -0.05% Beazley (BEZ) 584.50p -0.17%

FTSE 100 - Fallers

Airtel Africa (AAF) 111.90p -6.28% United Utilities Group (UU.) 995.20p -3.98% 3i Group (III) 1,904.00p -2.71% Standard Chartered (STAN) 667.20p -2.54% Barclays (BARC) 147.64p -2.52% Glencore (GLEN) 440.75p -2.49% Experian (EXPN) 2,846.00p -2.40% HSBC Holdings (HSBA) 603.40p -2.38% Anglo American (AAL) 2,281.00p -2.35% Auto Trader Group (AUTO) 595.60p -2.30%

FTSE 250 - Risers

Allianz Technology Trust (ATT) 264.00p 3.13% TR Property Inv Trust (TRY) 282.50p 0.89% Carnival (CCL) 1,110.50p 0.86% Bluefield Solar Income Fund Limited (BSIF) 122.20p 0.66% Genuit Group (GEN) 292.00p 0.52% Hilton Food Group (HFG) 650.00p 0.46% Abrdn Private Equity Opportunities Trust (APEO) 451.00p 0.45% Redrow (RDW) 462.00p 0.43% NextEnergy Solar Fund Limited Red (NESF) 98.70p 0.41% Petershill Partners (PHLL) 163.60p 0.37%

FTSE 250 - Fallers

British Land Company (BLND) 316.50p -3.86% Virgin Money UK (VMUK) 148.15p -3.80% Molten Ventures (GROW) 250.00p -2.72% Mitie Group (MTO) 95.70p -2.64% Edinburgh Worldwide Inv Trust (EWI) 140.60p -2.63% Tate & Lyle (TATE) 739.50p -2.57% Trainline (TRN) 249.00p -2.35% Discoverie Group (DSCV) 873.00p -2.24% TBC Bank Group (TBCG) 2,530.00p -2.13% Mitchells & Butlers (MAB) 213.40p -2.11%