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London midday: Stocks maintain strong gains as BoE stands pat on rates

(Sharecast News) - London stocks were still sharply higher by midday on Thursday after the Bank of England stood pat on interest rates, as expected. The FTSE 100 was 2% firmer at 7,700.70, while sterling was up 0.7% against the dollar at 1.2704, extending earlier gains.

The BoE left interest rates on hold at 5.25%. The rate-setting Monetary Policy Committee has left the cost of borrowing unchanged since August. Previous to that it raised rates 14 times from December 2021, as it looked to tackle surging inflation.

The consumer prices index now stands at 4.6%, off last year's high of 11.1% but well above the BoE's long-term target of 2%. Most analysts believe rates have likely peaked for this cycle, but are more divided over when the MPC will start cutting rates again.

The last time interest rates were this high was February 2008.

Markets were already firmly in risk-on mode after the Federal Reserve on Wednesday held the benchmark federal funds rate at between 5.25% and 5.5%, and signalled that three rate cuts were on the cards for next year.

Russ Mould, investment director at AJ Bell, said: "Equity markets have enjoyed a hearty boost after Federal Reserve chair Jay Powell indicated further rate rises were not needed. While the market was already pricing in rate cuts from 2024, investors welcomed Powell's comments with open arms. Having it spelt out was music to their ears.

"The market has been waiting a long time for this pivot in monetary policy and it's finally come."

Still to come, the European Central Bank will make its policy statement at 1315 GMT amid expectations it too will keep rates on hold.

In equity markets, electrical retailer Currys surged after it held annual guidance as interim losses narrowed and its Nordics unit reported an improvement in gross margins. The company posted a loss before tax of £46m, compared with a loss of £548m a year earlier. UK like-for-like revenue fell 3% to £2.2bn.

Bunzl gained after saying it expects operating profit for the year to the end of December to be "slightly ahead" of prior guidance, helped along by acquisitions.

Serco advanced as it said its full-year performance would be better than initially expected, while Transact owner IntegraFin jumped after final results.

Market Movers

FTSE 100 (UKX) 7,700.70 2.02% FTSE 250 (MCX) 19,215.67 2.78% techMARK (TASX) 4,224.86 1.83%

FTSE 100 - Risers

Ocado Group (OCDO) 701.00p 8.88% Ashtead Group (AHT) 5,410.00p 8.63% Endeavour Mining (EDV) 1,819.00p 7.44% Entain (ENT) 908.60p 7.32% Kingfisher (KGF) 244.20p 7.20% Anglo American (AAL) 1,783.80p 6.80% Croda International (CRDA) 5,066.00p 6.36% St James's Place (STJ) 719.60p 6.20% Spirax-Sarco Engineering (SPX) 10,035.00p 5.81% Antofagasta (ANTO) 1,653.50p 5.69%

FTSE 100 - Fallers

Relx plc (REL) 3,096.00p -2.30% Admiral Group (ADM) 2,706.00p -1.81% BAE Systems (BA.) 1,049.00p -1.59% Associated British Foods (ABF) 2,410.00p -1.27% Centrica (CNA) 144.75p -1.06% Pearson (PSON) 951.20p -0.50% Haleon (HLN) 323.90p -0.29% Dechra Pharmaceuticals (DPH) 3,844.00p 0.00% Aviva (AV.) 431.50p 0.12% M&G (MNG) 217.00p 0.18%

FTSE 250 - Risers

Mobico Group (MCG) 71.40p 10.27% IntegraFin Holding (IHP) 292.20p 9.93% Ceres Power Holdings (CWR) 184.20p 9.51% Currys (CURY) 49.08p 8.39% Liontrust Asset Management (LIO) 565.00p 7.93% Helios Towers (HTWS) 74.05p 7.71% Future (FUTR) 650.00p 7.53% Great Portland Estates (GPE) 429.40p 7.19% Marshalls (MSLH) 267.20p 7.05% Safestore Holdings (SAFE) 842.00p 6.79%

FTSE 250 - Fallers

W.A.G Payment Solutions (WPS) 86.00p -3.37% Lancashire Holdings Limited (LRE) 633.00p -1.71% Hiscox Limited (DI) (HSX) 1,045.00p -0.76% Fidelity China Special Situations (FCSS) 206.00p -0.48% Babcock International Group (BAB) 388.20p -0.15% Direct Line Insurance Group (DLG) 187.45p -0.03% Redde Northgate (REDD) 363.00p 0.00% Network International Holdings (NETW) 390.00p 0.00% Jlen Environmental Assets Group Limited NPV (JLEN) 95.20p 0.00% Personal Assets Trust (PNL) 468.50p 0.11%

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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