London midday: FTSE maintains gains as BoE stands pat

London stocks were still in the black by midday on Thursday, helped along by a solid performance from Shell, as the Bank of England kept interest rates unchanged.

The FTSE 100 was up 0.5% at 7,668.79, while sterling was down 0.2% against the dollar at 1.2663.

The BoE held rates at a 16-year high of 5.25% for the fourth time in a row, in line with economists’ expectations.

The decision was not unanimous, however. Two members of the Bank’s Monetary Policy Committee opted to lift rates by 0.25 percentage points to 5.5%, while one member was in favour of cutting rates to 5%.

This was the first time since March 2020 that a member voted for lower rates.

The MPC hiked the cost of borrowing 14 times since the end of 2021, as it looked to tackle surging inflation.

While inflation is now well off its peak, it remains notably above the BoE’s long-term target of 2%. The latest data from the Office for National Statistics also showed a surprise uptick in December, to 4% from 3.9% a month previously.

Overnight, the Federal Reserve also stood pat on interest rates, while pouring cold water on the prospect of a rate cut in March.

Steve Clayton, head of equity funds at Hargreaves Lansdown, said: "Interest rate bulls, many of whom have been calling for early and sustained rate cuts, effectively had their legs cut away from beneath them after that message. The market has had to push back expectations for the scale and pace of rate cutting through the rest of 2024. It’s very much a case of train delayed, not cancelled, at this point. But investors are likely to be less forgiving if we see any data emerging suggesting that the economy still has scope to keep inflation bubbling away."

In equity markets, Shell gushed higher as the oil giant posted a drop in annual profits but lifted its dividend and announced another $3.5bn share buyback.

Africa-focused telecoms group Airtel Africa rallied as it said it plans to launch a share buyback worth up to $100m after a strong underlying performance in the third quarter, though currency movements weighed heavily on growth.

BT Group ticked up as it reiterated annual guidance and reported flat adjusted earnings for the third quarter and a rise in revenues driven by higher prices.

JD Sports was trading down on the back of a weak outlook from Adidas, while Paragon Banking fell sharply as it traded without entitlement to the dividend.

In broker note action, easyJet flew higher after an upgrade to ‘overweight’ from ‘neutral’ at JPMorgan.

Marshalls was boosted by an upgrade to ‘buy’ at Berenberg, but Pets at Home was knocked lower by a downgrade to ‘hold’ by the same outfit.

Bytes Technology slumped after a downgrade to ‘hold’ at HSBC and retailer Next fell after a downgrade to ‘equalweight’ at Barclays.

Market Movers

FTSE 100 (UKX) 7,668.79 0.50%
FTSE 250 (MCX) 19,309.24 -0.25%
techMARK (TASX) 4,399.02 0.61%

FTSE 100 - Risers

Shell (SHEL) 2,517.00p 2.86%
Diploma (DPLM) 3,348.00p 2.70%
Croda International (CRDA) 4,919.00p 2.37%
Entain (ENT) 986.20p 1.86%
GSK (GSK) 1,595.60p 1.76%
Rightmove (RMV) 569.40p 1.64%
Glencore (GLEN) 427.35p 1.64%
WPP (WPP) 784.00p 1.63%
Beazley (BEZ) 553.00p 1.56%
Phoenix Group Holdings (PHNX) 513.20p 1.54%

FTSE 100 - Fallers

Fresnillo (FRES) 509.80p -4.10%
3i Group (III) 2,405.00p -2.99%
Ocado Group (OCDO) 535.60p -2.01%
Associated British Foods (ABF) 2,298.00p -1.84%
Next (NXT) 8,322.00p -1.72%
Endeavour Mining (EDV) 1,388.00p -1.70%
Smurfit Kappa Group (CDI) (SKG) 2,914.00p -1.15%
JD Sports Fashion (JD.) 115.75p -1.11%
Land Securities Group (LAND) 662.20p -1.11%
Burberry Group (BRBY) 1,296.00p -0.92%

FTSE 250 - Risers

Marshalls (MSLH) 296.00p 5.49%
AJ Bell (AJB) 324.00p 2.40%
easyJet (EZJ) 566.80p 1.91%
Future (FUTR) 728.00p 1.82%
Darktrace (DARK) 350.20p 1.71%
Serco Group (SRP) 176.30p 1.61%
Carnival (CCL) 1,221.50p 1.58%
Rotork (ROR) 318.20p 1.53%
Renishaw (RSW) 3,556.00p 1.48%
Bluefield Solar Income Fund Limited (BSIF) 112.40p 1.44%

FTSE 250 - Fallers

Paragon Banking Group (PAG) 665.50p -5.47%
Bytes Technology Group (BYIT) 623.00p -5.10%
Dr. Martens (DOCS) 84.65p -4.99%
Pets at Home Group (PETS) 267.80p -4.43%
Wood Group (John) (WG.) 152.40p -3.24%
Supermarket Income Reit (SUPR) 78.80p -2.72%
Tritax Eurobox (GBP) (EBOX) 50.40p -2.70%
Auction Technology Group (ATG) 531.00p -2.57%
Centamin (DI) (CEY) 94.90p -1.96%
Moonpig Group (MOON) 164.80p -1.90%