London close: Copper prices weigh on Footsie despite dovish MPC

Equities ended near their worst levels of the day despite a dovish set of minutes from the Bank of England's last Monetary Policy Committee meeting, weighed down by a further drop in commodity prices.

Following its meeting, the MPC said there were downside risks to growth linked to emerging markets and described 'core' consumer price inflation running at about 1% as "subdued".

The top flight index ended the session lower by 0.75% or 47.98 points at 6,364.90 after an initial run higher when the details of the MPC minutes and the November Inflation Report hit the wires.

Sterling ended the day sharply lower nevertheless, losing 0.97% to stand at 1.5236 against the Greenback by the close of trading. Three-month copper futures finished the session lower by 2.3% at $5,023 per metric tonne in LME trading.

The MPC voted 8-1 to keep the benchmark interest rate at 0.5% and 9-0 to keep the asset purchase programme at £375bn, as expected by the market consensus. Ian McCafferty was the only policymaker to vote in favour of a rate hike.

"Overall, today’s decision and minutes support our view that a Bank Rate hike is off the table in the short term and will be pushed out into at least Q2 2016, acknowledging risks to the downside in light of the above," Barclays said in a research report sent to clients.

"The “Super Thursday” announcements from the MPC were on the whole quite dovish, with the Committee signaling that it is still in no hurry to raise interest rates. We remain comfortable with our view that rates will not rise until Q2 of next year," chimed in Vicky Redwood, chief UK economist at Capital Economics.

Thursday´s decision came close on the heels of hawkish remarks from Fed chairwoman Janet Yellen on the day before. Speaking before the House financial services committee she said that the US economy was performing well and a rate hike next month was still a “live possibility”.

To take note of, Societe Generale said the US employment on Friday would be critical in shaping market expectations of the December FOMC meeting.

“A report with a headline number around 200K is likely to raise market pricing of a December rate hike, and pave the way to a further dollar advance, the bank said.

Momentum returning to housing market, economist says

UK house prices jumped by 1.1% month-on-month in October, according to the latest tally from Halifax.

That partly reflected "some catch-up [with other suverys] after years of relative weakness", said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

However, "momentum is clearly returning to the housing market as [...] Banks continue to seek to increase their mortgage loan books, and the Financial Policy Committee’s rules on loan-to-income multiples are still not close to biting," he added.

According to the Society of Motor Manufacturers and Traders (SMMT), new car sales in Britain declined 1.1% year-on-year in October, the first decline in 43 months, as 177,664 new cars were registered last month.

In parallel, the European Commission lowered its forecasts for British GDP growth this year and next by two tenths of a percentage points, to 2.4% and 2.2%, respectively.

Those for the Eurozone were raised a tad, but Brussels warned that the scars of the past financial crisis would weigh on growth for the next few years.

RSA and AstraZeneca pace gains

RSA Insurance booked a net loss of £16m in the third quarter as a result of the earthquake in Chile, but its shares were on the up as it insisted turnaround plans remained on track and posted a 1% rise in underlying premium income for the first nine months of the year.

Though its third quarter revenues were hit by foreign exchange woes, AstraZeneca led the FTSE's risers throughout most of the day after it upgraded its revenue outlook for the year. While year to date revenues were flat at constant exchange rates on the previous year at $18.3bn (£11.9bn), the quarter only brought in $5.9bn in total revenue – a 2% drop.

Anglo American was the big faller due to a drop in copper prices. After the company’s stock rose more than its sector peers over the week, the market quickly corrected itself by seeing the price drop by over 6% and falling to 16-year lows.

Third-quarter like-for-like sales at Morrison Supermarkets fell at a faster rate than in the previous quarter and worse than expectations, putting a drag on its shares. Management confirmed they expect underlying pre-tax profit to be higher in the second half than in the first, but analysts were mostly disappointed.

In the FTSE 250, shares in Amec Foster Wheeler tumbled after the oil and gas engineering services company announced it was cutting its dividend by half and lifting its cost-savings target for the year amid tough market conditions.

Travel company Thomas Cook was under the cosh after Prime Minister David Cameron decided late on Wednesday to ground all UK-bound flights from Sharm el-Sheikh in Egypt following the Russian plane crash in the Sinai desert last week. Investors were concerned that the move could reduce demand for holidays in Egypt.

Clothing retailer SuperGroup climbed after the company said sales were up 22.4% in the first half but warned that comparatives throughout the second half are more challenging.

Engineering firm Cobham slipped after saying it expects underlying earnings per share for the full year to be at the lower end of current market expectations on the back of order delays and decreased demand for some of its products.

Market Movers

FTSE 100 (UKX) 6,364.90 -0.75%
FTSE 250 (MCX) 17,117.13 -0.38%
techMARK (TASX) 3,089.61 -0.01%

FTSE 100 - Risers

RSA Insurance Group (RSA) 429.00p 3.35%
AstraZeneca (AZN) 4,247.00p 2.90%
easyJet (EZJ) 1,772.00p 2.31%
Persimmon (PSN) 1,900.00p 2.21%
Barratt Developments (BDEV) 585.00p 2.09%
British Land Company (BLND) 852.00p 2.04%
Hammerson (HMSO) 620.50p 1.89%
Berkeley Group Holdings (The) (BKG) 3,148.00p 1.81%
London Stock Exchange Group (LSE) 2,560.00p 1.79%
Land Securities Group (LAND) 1,323.00p 1.77%

FTSE 100 - Fallers

Anglo American (AAL) 534.60p -7.68%
Standard Chartered (STAN) 627.00p -6.31%
Morrison (Wm) Supermarkets (MRW) 167.50p -5.63%
Randgold Resources Ltd. (RRS) 4,121.00p -4.43%
Aberdeen Asset Management (ADN) 349.50p -4.12%
Royal Bank of Scotland Group (RBS) 312.00p -4.09%
Antofagasta (ANTO) 516.00p -4.00%
Glencore (GLEN) 121.50p -3.46%
Intertek Group (ITRK) 2,604.00p -3.45%
BHP Billiton (BLT) 1,034.00p -3.32%

FTSE 250 - Risers

Supergroup (SGP) 1,619.00p 9.24%
Howden Joinery Group (HWDN) 491.30p 7.08%
Lancashire Holdings Limited (LRE) 729.50p 3.84%
Foxtons Group (FOXT) 193.90p 3.47%
Redrow (RDW) 442.00p 2.74%
Bellway (BWY) 2,516.00p 2.65%
Just Retirement Group (JRG) 164.50p 2.49%
Telecom Plus (TEP) 1,083.00p 2.46%
Shawbrook Group (SHAW) 364.90p 2.44%
Just Eat (JE.) 446.90p 2.43%

FTSE 250 - Fallers

Amec Foster Wheeler (AMFW) 574.00p -23.16%
Premier Oil (PMO) 80.00p -9.09%
Wood Group (John) (WG.) 572.00p -8.77%
Petrofac Ltd. (PFC) 799.50p -8.47%
Thomas Cook Group (TCG) 112.20p -7.27%
Hunting (HTG) 347.60p -6.78%
Petra Diamonds Ltd.(DI) (PDL) 75.70p -6.66%
TalkTalk Telecom Group (TALK) 220.90p -6.44%
Ashmore Group (ASHM) 261.20p -6.35%
Kaz Minerals (KAZ) 114.40p -5.14%