London midday: FTSE remains in the red as BoE stands pat on rates, asset purchases

The FTSE 100 was underperforming the rest of Europe come midday as the Bank of England stood pat on its key interest rate and asset-purchase programme.

The index was down 0.2% to 6,403.29 at midday after the BoE voted 8-1 to keep the benchmark interest rate at 0.5% and 9-0 to keep the asset purchase programme at £375bn, as widely expected.

Ian McCafferty was the only policymaker to vote in favour of a rate hike.

The BoE gave no indication it would raise interest rates any time soon, cutting its growth and inflation forecasts for this year and the next and cautioning that the outlook for global growth has weakened since the August Inflation Report.

On Wednesday, Fed chairwoman Janet Yellen said before the House financial services committee that the US economy was performing well and a rate hike next month was still a “live possibility”.

"The committee does feel that moving in a timely fashion if the data and outlook justify such a move is a prudent thing to do because we will be able to move at a more gradual and measured pace," Yellen said.

Momentum returning to housing market, economist says

UK house prices jumped by 1.1% month-on-month in October, according to the latest tally from Halifax.

That partly reflected "some catch-up [with other suverys] after years of relative weakness", said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

However, "momentum is clearly returning to the housing market as [...] Banks continue to seek to increase their mortgage loan books, and the Financial Policy Committee’s rules on loan-to-income multiples are still not close to biting," he added.

According to the Society of Motor Manufacturers and Traders (SMMT), new car sales in Britain declined 1.1% year-on-year in October, the first decline in 43 months, as 177,664 new cars were registered last month.

In parallel, the European Commission increased its forecasts for growth in euro area GDP this year and next by one tenth of a percentage point, to 1.6% and 1.9%, respectively.

However, Brussels warned that the scars of the past financial crisis would weigh on growth for the next few years.

AstraZeneca and RSA pace gains

Though its third quarter revenues were hit by foreign exchange woes, AstraZeneca led the FTSE's risers as it upgraded its revenue outlook for the year. While year to date revenues were flat at constant exchange rates on the previous year at $18.3bn (£11.9bn), the quarter only brought in $5.9bn in total revenue – a 2% drop.

RSA Insurance booked a net loss of £16m in the third quarter as a result of the earthquake in Chile, but its shares were on the up as it insisted turnaround plans remained on track and posted a 1% rise in underlying premium income for the first nine months of the year.

Third-quarter like-for-like sales at Morrison Supermarkets fell at a faster rate than in the previous quarter and worse than expectations, putting a drag on its shares. Management confirmed they expect underlying pre-tax profit to be higher in the second half than in the first, but analysts were mostly disappointed.

Food ingredients maker Tate & Lyle posted an increase in interim profit, marking a first improvement in trading after a turbulent end to 2014. The FTSE 250 group said that in the six months to 30 September, pre-tax profit rose 28% year-on-year to £103m, driven higher by a 28% increase in operating profit in the speciality food ingredients division.

Schroders saw profitability jump in the nine months to September 2015 alongside a sharp rise in net inflows at its asset management business, with assets under management holding up better than expected in the third quarter. Total inflows rose by £8.3bn in the first nine months of the year.

In the FTSE 250, clothing retailer SuperGroup climbed after the company said sales were up 22.4% in the first half but warned that comparatives throughout the second half are more challenging.

Engineering firm Cobham slipped after saying it expects underlying earnings per share for the full year to be at the lower end of current market expectations on the back of order delays and decreased demand for some of its products.

Shares in Amec Foster Wheeler tumbled after the oil and gas engineering services company announced it was cutting its dividend by half and lifting its cost-savings target for the year amid tough market conditions.

Market Movers

FTSE 100 (UKX) 6,378.25 -0.54%
FTSE 250 (MCX) 17,102.29 -0.47%
techMARK (TASX) 3,098.48 0.28%

FTSE 100 - Risers

AstraZeneca (AZN) 4,251.00p 2.99%
RSA Insurance Group (RSA) 425.80p 2.58%
easyJet (EZJ) 1,768.00p 2.08%
Hikma Pharmaceuticals (HIK) 2,087.00p 1.90%
Marks & Spencer Group (MKS) 545.00p 1.87%
Shire Plc (SHP) 4,777.00p 1.44%
Sports Direct International (SPD) 693.00p 1.24%
Smith & Nephew (SN.) 1,116.00p 1.09%
Associated British Foods (ABF) 3,472.00p 1.08%
London Stock Exchange Group (LSE) 2,539.00p 0.95%

FTSE 100 - Fallers

Anglo American (AAL) 545.60p -5.78%
Standard Chartered (STAN) 639.20p -4.48%
Morrison (Wm) Supermarkets (MRW) 171.00p -3.66%
Aberdeen Asset Management (ADN) 351.90p -3.46%
Glencore (GLEN) 121.75p -3.26%
Intertek Group (ITRK) 2,616.00p -3.00%
Coca-Cola HBC AG (CDI) (CCH) 1,542.00p -2.96%
BP (BP.) 390.55p -2.86%
Randgold Resources Ltd. (RRS) 4,191.00p -2.81%
Antofagasta (ANTO) 523.00p -2.70%

FTSE 250 - Risers

Supergroup (SGP) 1,596.00p 7.69%
Howden Joinery Group (HWDN) 487.90p 6.34%
Lancashire Holdings Limited (LRE) 730.00p 3.91%
Jimmy Choo (CHOO) 152.50p 3.60%
Just Retirement Group (JRG) 165.30p 2.99%
Foxtons Group (FOXT) 192.70p 2.83%
Redrow (RDW) 441.60p 2.65%
Provident Financial (PFG) 3,534.00p 2.46%
Shawbrook Group (SHAW) 364.30p 2.27%
Bellway (BWY) 2,501.00p 2.04%

FTSE 250 - Fallers

Amec Foster Wheeler (AMFW) 563.00p -24.63%
Premier Oil (PMO) 81.15p -7.78%
Tullow Oil (TLW) 216.70p -7.00%
Petrofac Ltd. (PFC) 816.00p -6.58%
Thomas Cook Group (TCG) 113.80p -5.95%
Petra Diamonds Ltd.(DI) (PDL) 76.75p -5.36%
Ashmore Group (ASHM) 264.20p -5.27%
Hunting (HTG) 354.50p -4.93%
Vedanta Resources (VED) 486.20p -4.57%
Wood Group (John) (WG.) 599.50p -4.39%