London midday: Investors show nerves ahead of Fed, BoE decisions

London stocks pulled back from a five-month high on Monday as risk appetite waned on a relatively quiet day for economic data or corporate earnings.

The FTSE 100 was down 0.3% at 7,687 at the midday mark as it retreats from reaching 7,711.38 on Friday – its highest close since 23 May.

It's set to be a busy week, with policy decisions due from the Federal Reserve (Wednesday), the Bank of England (Thursday) and a host of other central banks elsewhere, including Japan, Brazil and Turkey.

Fed and BoE in focus

The Fed is widely expected to hold rates steady following a recent barrage of economic data showing the US economy to have cooled slightly in August. Though analysts are holding out the possibility of one further rate hike to 5.50-5.75% later this year.

Meanwhile, the Bank of England is set to hike its benchmark interest rate by 25 basis points to 5.5%, according to economists, but it is hoped that this will be the peak for rates in the current cycle, before it begins to loosen monetary policy in 2024.

"The market has massively scaled back expectations for any future tightening and will therefore be very interested in the BoE's statement," said analyst Chris Turner from ING.

However, a lot will ride on the outcome of August's UK consumer price index (CPI) due out on Wednesday. Prices are expected to have risen 0.7% after a 0.4% fall in July, according to consensus forecasts, though the annual rate of core inflation is estimated to have eased to 6.8% from 6.9%.

"Although inflation figures for August will not be published until the day before the rate announcement, the July figures exceeded expectations for both headline and core inflation with most notably service inflation reaccelerating," said analysts at Danske Bank.

Ocado, Mondi and Phoenix on the up

Ocado shares jumped ahead of an expected nine-month trading update on Tuesday, with the stock being helped by an apparent broker upgrade.

Paper and packaging group Mondi rose strongly after selling its last remaining facility in Russia to Sezar Invest for €775m. Western companies have exited Russia after sanctions were imposed in response to Moscow's unprovoked invasion on neighbouring Ukraine.

Savings and retirement group Phoenix was also in favour after lifting its interim dividend by 5% after smashing forecasts with cash generation in the first half.

GSK edged higher after the news that the US Food and Drug Administration has granted approval for its ‘Ojjaara’ drug for adults suffering from a difficult-to-treat blood cancer.

Market Movers

FTSE 100 (UKX) 7,687.03 -0.32%
FTSE 250 (MCX) 18,594.66 -1.04%
techMARK (TASX) 4,382.11 -0.70%

FTSE 100 - Risers

Ocado Group (OCDO) 813.40p 6.52%
Mondi (MNDI) 1,399.00p 4.64%
Marks & Spencer Group (MKS) 222.70p 1.37%
Phoenix Group Holdings (PHNX) 544.40p 1.19%
Hikma Pharmaceuticals (HIK) 2,085.00p 1.07%
Admiral Group (ADM) 2,460.00p 0.99%
Reckitt Benckiser Group (RKT) 5,812.00p 0.87%
GSK (GSK) 1,521.60p 0.79%
Glencore (GLEN) 459.80p 0.74%
British American Tobacco (BATS) 2,720.00p 0.67%

FTSE 100 - Fallers

Entain (ENT) 1,117.00p -3.16%
Prudential (PRU) 915.40p -2.78%
RS Group (RS1) 723.80p -2.72%
Rightmove (RMV) 548.00p -2.42%
WPP (WPP) 754.40p -2.36%
CRH (CDI) (CRH) 4,318.00p -2.35%
Land Securities Group (LAND) 579.00p -2.33%
Auto Trader Group (AUTO) 605.00p -2.32%
B&M European Value Retail S.A. (DI) (BME) 565.20p -2.05%
SEGRO (SGRO) 725.40p -1.87%

FTSE 250 - Risers

NCC Group (NCC) 103.00p 3.00%
International Distributions Services (IDS) 264.00p 2.60%
Drax Group (DRX) 510.40p 2.57%
Energean (ENOG) 1,191.00p 2.23%
Target Healthcare Reit Ltd (THRL) 78.30p 2.22%
Petershill Partners (PHLL) 163.20p 1.62%
Helios Towers (HTWS) 82.55p 1.54%
Foresight Group Holdings Limited NPV (FSG) 446.00p 1.36%
Vesuvius (VSVS) 438.40p 1.20%
FirstGroup (FGP) 157.60p 0.90%

FTSE 250 - Fallers

Syncona Limited NPV (SYNC) 112.20p -5.24%
Aston Martin Lagonda Global Holdings (AML) 308.80p -5.22%
Ferrexpo (FXPO) 79.70p -4.84%
Savills (SVS) 886.50p -4.57%
Renishaw (RSW) 3,692.00p -4.05%
Ceres Power Holdings (CWR) 345.60p -4.00%
Ascential (ASCL) 197.80p -3.79%
Greggs (GRG) 2,450.00p -3.54%
Future (FUTR) 763.50p -3.54%
Trainline (TRN) 264.20p -3.37%