London close: Stocks rise as traders eye Fed and BoJ policy announcements

London stocks finished the session higher on Tuesday as investors braced for policy announcements from the Bank of Japan and the Federal Reserve.

The US central bank is widely expected to keep interest rates unchanged, while BoJ officials have suggested in recent weeks that there is room to cut rates further after taking them into negative territory for the first time earlier this year.

Analysts are also speculating that Japan’s central bank may try to steepen the yield curve by changing its Japanese government bonds (JGB) purchasing scheme.

Jim Reid at Deutsche Bank said: “Tomorrow is going to be a bit of a Hollywood day in markets with the FOMC conclusion and the BoJ meeting.

“As a reminder Deutsche Bank thinks that they'll refrain from adding more stimulus this month. While our Japan economists acknowledge all the noise from the various media outlets reporting that the BoJ is considering a change in its JGB purchasing scheme to spur a steepening in the curve, a deepening of negative interest rate policy and a new forward guidance strategy, they think that the BoJ will do little more than indicate its intent to base its policy implementation on the yield curve."

In economic data, the Commerce Department revealed US housing starts declined 5.8% from July’s revised 1.21m to 1.14m, missing expectations for a smaller drop to 1.19m. Starts were up 0.9% from the same month a year ago.

In corporate news, B&Q and Screwfix owner Kingfisher reversed earlier gains after reporting first half results that beat forecasts.

Burberry’s shares advanced after unveiling its September collection at London Fashion Week on Monday night. "It is the first show in which a new Burberry collection will be instantly available online and at its regent Street store," said analyst Jasper Lawler of CMC Markets. "The instant availability stands to better capture the excitement surrounding a new collection at the time of release."

Johnson Matthey was moving back towards one-year highs set last month as platinum prices moved higher, up 1.5% as the precious metal traded 200% of its 20-day intraday average volume.

FTSE 250 spreadbetting firm IG Group fell sharply after saying it performed well in the three months to the end of August in what was a challenging quarter, but reporting a drop in UK & Ireland revenue as markets became increasingly subdued after Brexit.

Airlines British Airways owner IAG and Easyjet slumped as caution about travel and tourism was renewed by the weekend's New York terrorist attack.

Market Movers

FTSE 100 (UKX) 6,830.79 0.25%
FTSE 250 (MCX) 17,890.94 0.01%
techMARK (TASX) 3,533.31 0.46%

FTSE 100 - Risers

Burberry Group (BRBY) 1,379.00p 3.61%
Shire Plc (SHP) 5,315.00p 2.55%
Johnson Matthey (JMAT) 3,272.00p 1.93%
Worldpay Group (WI) (WPG) 303.50p 1.85%
Standard Life (SL.) 348.20p 1.66%
ITV (ITV) 197.00p 1.49%
Paddy Power Betfair (PPB) 8,940.00p 1.48%
Land Securities Group (LAND) 1,037.00p 1.47%
Admiral Group (ADM) 2,080.00p 1.41%
TUI AG Reg Shs (DI) (TUI) 1,075.00p 1.22%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 401.00p -3.56%
Next (NXT) 4,897.00p -2.84%
easyJet (EZJ) 1,041.00p -2.71%
Kingfisher (KGF) 368.80p -2.10%
Ashtead Group (AHT) 1,216.00p -1.78%
Antofagasta (ANTO) 492.70p -1.56%
Pearson (PSON) 790.00p -1.37%
Royal Bank of Scotland Group (RBS) 183.70p -1.18%
Lloyds Banking Group (LLOY) 56.44p -0.98%
Provident Financial (PFG) 2,960.00p -0.97%

FTSE 250 - Risers

GVC Holdings (GVC) 772.00p 7.00%
TalkTalk Telecom Group (TALK) 204.20p 3.65%
Ladbrokes (LAD) 149.00p 3.54%
Shawbrook Group (SHAW) 244.60p 3.16%
Croda International (CRDA) 3,389.00p 2.45%
esure Group (ESUR) 302.90p 2.33%
JRP Group (JRP) 118.50p 2.16%
Victrex plc (VCT) 1,533.00p 2.13%
BBA Aviation (BBA) 245.80p 1.91%
Weir Group (WEIR) 1,565.00p 1.89%

FTSE 250 - Fallers

Regus (RGU) 271.20p -6.42%
Euromoney Institutional Investor (ERM) 1,150.00p -4.73%
Hunting (HTG) 417.80p -3.75%
AO World (AO.) 157.60p -3.31%
Countrywide (CWD) 227.00p -3.16%
Tullow Oil (TLW) 218.10p -2.59%
Greencore Group (GNC) 341.70p -2.57%
Debenhams (DEB) 56.20p -2.52%
Vedanta Resources (VED) 509.00p -2.49%
IG Group Holdings (IGG) 903.00p -2.48%