London close: Shares end on mixed note as BoE turns a shade more hawkish

Equities in London struggled to cast off a heavy coat of ex-dividend stocks, with Bank of England's so-called 'Super Thursday' chiming in to erode already mediocre sentiment.

The FTSE 100 closed up by 0.02% to 7,386.63, and the second-tier FTSE 250 ended down 0.41% to 19,795.69.

Bank held its core interest rate at 0.25% on a vote of 7-1, as expected, but upped its inflation forecast for 2017 to 2.7%, from 2.4%.

Its target is about 2%.

Andrew Goodwin at Oxford Economics said that: "May’s edition of 'Super Thursday' was unusually low-key, with the MPC making only minor changes to its forecasts and giving a clear impression that it is likely to remain firmly in 'wait-and-see' mode for some time yet.

"However, the Committee was keen to send a message that, assuming its baseline forecast plays out and Brexit is “smooth”, it believes that markets have become too bearish about the likely path of interest rates towards the end of the forecast horizon. This is consistent with our long-held view that after a first hike in H2 2019, rates will rise by 50bp a year thereafter."

This and disappointing UK trade balance, production and housing-market data out mid morning weighed on sterling, which failed to boost blue chips thanks in part to an ex-dividend surfeit.

"You'd think, with the BoE stating that interest rates may rise faster than expected, that sterling would be pretty happy," said Connor Campbell of Spreadex.

"You'd be wrong," the financial analyst exclaimed, adding the market disliked a parallel central bank forecast for average UK earnings growth of just 2% this year.

"In a rare sight the FTSE took no joy in the pound's fall, the UK index itself shedding 0.2% to lurk just the wrong side of 7400," said Campbell.

All of this was alongside falls in the Dow, S&P 500 and Nasdaq in the US, and drops in Europe's Euro Stoxx 50, Germany's Dax and France's Cac 40.

To take note of, overnight Boston Federal Reserve chief Eric Rosengren sounded a hawkish note, telling an audience that three more interest rate hikes were still justified in the States this year.

Michael Hewson, chief market analyst at CMC Markets UK, noted European stocks had struggled for direction all day, thanks to a lack of positive drivers.

"It would appear that while political risk has subsidised investors remain far from convinced that further upside can be sustained," he said.

This was without further evidence of a positive pickup in the economic numbers, said Hewson.Looking more closely at trade in London, Centrica, Sainsbury's, Admiral, Merlin, BP, Saga, Carillion, Ibstock and Aberdeen Asset Management all went ex-dividend.

Overall among blue chips, utilities, financials and supermarkets did poorly for the most part, but miners, several pharams and commercial property did okay.BT Group fell as it posted a big drop in annual profits, and said it was stepping up its cost-cutting programme by axing 4000 jobs, while also revealing it was trimming executive pay.

Hikma Pharmaceuticals and Vectura tumbled after saying US regulators had decided not to approve their generic copy of GlaxoSmithKline's lung drug Advair due to "major" issues with its application.Paper and packing group Mondi was under pressure after it said first-quarter underlying operating profit fell 6% to €252m.

Market Movers

FTSE 100 (UKX) 7,386.63 0.02%
FTSE 250 (MCX) 19,795.69 -0.41%
techMARK (TASX) 3,540.01 -0.43%

FTSE 100 - Risers

Fresnillo (FRES) 1,503.00p 5.03%
Randgold Resources Ltd. (RRS) 7,150.00p 3.62%
Standard Chartered (STAN) 752.50p 2.46%
Antofagasta (ANTO) 778.00p 2.30%
Intu Properties (INTU) 279.90p 2.00%
Burberry Group (BRBY) 1,649.00p 1.48%
Royal Dutch Shell 'B' (RDSB) 2,195.00p 1.22%
Mediclinic International (MDC) 839.50p 1.14%
HSBC Holdings (HSBA) 678.00p 1.06%
Anglo American (AAL) 1,052.00p 1.01%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 1,804.00p -7.77%
Centrica (CNA) 192.20p -5.41%
BT Group (BT.A) 297.85p -4.50%
ITV (ITV) 189.00p -3.67%
Admiral Group (ADM) 2,038.00p -3.23%
Sainsbury (J) (SBRY) 265.00p -2.47%
Next (NXT) 4,302.00p -2.25%
International Consolidated Airlines Group SA (CDI) (IAG) 598.00p -1.73%
Mondi (MNDI) 2,000.00p -1.67%
Pearson (PSON) 709.00p -1.66%

FTSE 250 - Risers

Polymetal International (POLY) 1,035.00p 3.97%
Euromoney Institutional Investor (ERM) 1,076.00p 2.97%
Hochschild Mining (HOC) 259.40p 2.81%
Tritax Big Box Reit (BBOX) 146.30p 2.74%
B&M European Value Retail S.A. (DI) (BME) 353.20p 2.61%
Acacia Mining (ACA) 406.70p 2.42%
Sanne Group (SNN) 646.00p 1.89%
Centamin (DI) (CEY) 157.40p 1.61%
Grainger (GRI) 266.50p 1.60%
Kennedy Wilson Europe Real Estate (KWE) 1,050.00p 1.55%

FTSE 250 - Fallers

Vectura Group (VEC) 132.10p -8.83%
Pets at Home Group (PETS) 164.50p -7.58%
Carillion (CLLN) 206.50p -6.81%
Supergroup (SGP) 1,570.00p -4.91%
Hill & Smith Holdings (HILS) 1,322.00p -4.69%
Grafton Group Units (GFTU) 755.00p -4.67%
Go-Ahead Group (GOG) 1,844.00p -3.96%
Dunelm Group (DNLM) 616.50p -3.07%
Capita (CPI) 560.00p -2.95%
Halfords Group (HFD) 363.50p -2.91%