London close: Stocks rise as BoE votes unanimously to keep policy unchanged

London shares gained on Thursday after the Bank of England voted unanimously to keep policy unchanged.

The FTSE 100 finished up 0.72% to 6,99.01 points.

The Monetary Policy Committee decided to leave interest rates at 0.25% and the asset purchase programme at £435bn, in what were widely expected moves by analysts.

In the minutes of the policy meeting, the Bank said little has changed since November's inflation report. However, the Bank said inflation may overshoot its 2% target by less than it forecast in November in light of the recent appreciation in Sterling.

The BoE reiterated that it was ready to tighten or loosen policy if needed to respond to any changes in the economic outlook as Brexit deliberations continue.

"The December MPC minutes do little to change the view that interest rates are likely to stay at 0.25% through 2017," said Howard Archer, chief UK and European economist at IHS Global Insight.

"Indeed, it currently looks more likely than not to us that the Bank of England will be keeping monetary policy unchanged for a prolonged period (maybe out to 2020). We believe the Bank of England will be pretty tolerant on the probable appreciable inflation overshoot given the prolonged, highly uncertain outlook that the UK economy is likely to face as the government negotiates the exit from the EU."

In other UK news, retail sales growth slowed in November from the previous month’s 14-year high as an increase in fuel prices offset strong Black Friday sales.

Retail sales, including fuel, rose 5.9% compared to the same month a year ago, slowing from October’s 7.2% annualised rise, the Office for National Statistics said. The decline was in line with expectations.

In the US, the consumer price index edged up 0.2% in November, as expected, from the 0.4% rise in the previous month.

In the 12 months to November the index increased 1.7%, also as anticipated, from 1.6% in October

Initial jobless claims fell 4,000 to a seasonally adjusted 254,000 in the week ended 10 December, slightly below the 256,000 expected, the Labor Department said. Continuing unemployment claims rose by 11,000 to 2.02m in the week ended 3 December.

The NAHB housing market index rose to a nine-year high to 70 in December, from 63 the prior month, and beat expectations of 64.

Meanwhile, investors continued to digest the Federal Reserve’s decision to raise interest rates for the first time in a year on Wednesday.

The Fed raised rates to between 0.50% and 0.75% from 0.25% to 0.50% and signalled that more interest rate increases were on the cards for next year than it had at the meeting in September. A further three hikes were projected in 2018, followed by another three in 2019.

The dollar surged following the announcement and continued to rise throughout Thursday’s session. The greenback was up 1.29% against the pound, 1.46% versus the euro and 1.12% versus the yen at 1638 GMT.

In response to a stronger dollar, oil prices retreated with Brent crude down 0.78% to $53.48 per barrel and West Texas Intermediate down 1.4% to $50.33 per barrel at 1645 GMT.

On the company front, British Gas owner Centrica pushed up after lifting its earnings outlook for the full-year.

GVC Holdings rallied as the FTSE 250 sports betting and gaming group said it expects pro-forma net gaming revenue for the year to the end of December and adjusted earnings to be at the upper end of forecasts.

A gauge of mining shares slumped as metal prices fell with Fresnillo, Randgold Resources and Antofagasta among the top fallers.

Aggreko got a boost as Deutsche Bank upped its stance on the temporary power provider to ‘buy’ from ‘hold’ and lifted the price target to 1,000p from 780p noting the company was approaching the end of four years of negative earnings momentum.

Hochschild Mining was under the cosh after saying its Pallancata mine in Peru had temporarily stopped production due to a road blockade by members of a local community.

Marston’s was weaker as its stock went ex-dividend.

Market Movers

FTSE 100 (UKX) 6,999.01 0.72%
FTSE 250 (MCX) 17,764.86 0.47%
techMARK (TASX) 3,323.00 0.78%

FTSE 100 - Risers

Centrica (CNA) 231.20p 5.62%
Royal Bank of Scotland Group (RBS) 227.00p 4.42%
International Consolidated Airlines Group SA (CDI) (IAG) 450.70p 3.87%
GKN (GKN) 330.90p 3.60%
Barclays (BARC) 229.45p 3.47%
Coca-Cola HBC AG (CDI) (CCH) 1,667.00p 3.22%
easyJet (EZJ) 1,007.00p 2.70%
Lloyds Banking Group (LLOY) 64.37p 2.57%
InterContinental Hotels Group (IHG) 3,532.00p 2.44%
Persimmon (PSN) 1,728.00p 2.37%

FTSE 100 - Fallers

Randgold Resources Ltd. (RRS) 5,470.00p -7.91%
Fresnillo (FRES) 1,114.00p -5.59%
Antofagasta (ANTO) 683.50p -5.20%
Anglo American (AAL) 1,154.50p -3.99%
Polymetal International (POLY) 777.00p -3.54%
BHP Billiton (BLT) 1,312.00p -3.21%
Mediclinic International (MDC) 724.00p -2.75%
Glencore (GLEN) 272.05p -2.68%
Rio Tinto (RIO) 3,088.50p -2.49%
Associated British Foods (ABF) 2,669.00p -1.55%

FTSE 250 - Risers

GVC Holdings (GVC) 663.00p 7.80%
Aggreko (AGK) 917.50p 4.68%
WH Smith (SMWH) 1,510.00p 4.35%
Playtech (PTEC) 795.50p 3.72%
Thomas Cook Group (TCG) 87.45p 3.31%
PayPoint (PAY) 907.00p 3.19%
Auto Trader Group (AUTO) 403.10p 3.09%
SIG (SHI) 98.90p 3.02%
JRP Group (JRP) 140.70p 3.00%
Victrex plc (VCT) 1,897.00p 2.82%

FTSE 250 - Fallers

Centamin (DI) (CEY) 114.90p -11.95%
Acacia Mining (ACA) 360.30p -9.34%
Hochschild Mining (HOC) 224.10p -7.78%
Petra Diamonds Ltd.(DI) (PDL) 147.00p -6.96%
Marston's (MARS) 133.20p -4.38%
Redefine International (RDI) 37.63p -4.22%
NCC Group (NCC) 176.80p -4.17%
Kaz Minerals (KAZ) 378.20p -3.59%
Hastings Group Holdings (HSTG) 229.10p -3.13%
Kennedy Wilson Europe Real Estate (KWE) 956.50p -2.65%