London midday: Shares fall as BoE's McCafferty calls for rate hike

London stocks snapped an earlier climb on Tuesday after the Bank of England’s well-known hawk Ian McCafferty again called for an interest rate hike.

McCafferty, who was the only member of the Monetary Policy Committed to vote for higher interest rates in the past three meetings, said that the BoE should begin raising rates now to ensure gradual and steady path.

In a speech at Bloomberg’s headquarters in London, McCafferty said: “If we on the MPC are to achieve our ambition of raising rates only gradually, so as to minimise the disruption to households and businesses of a normalisation of policy after a long period in which interest rates have been at historic lows, we need to avoid getting behind the curve."

The market is now focusing on the BoE governor Mark Carney’s at the Treasury Select Committee Hearing for remarks on policy.

Meanwhile, a European Central Bank survey showed credit standards for Eurozone companies eased more than expected in the third quarter as banks used additional liquidity from the ECB’s €60bn a month asset-purchase programme to grant loans. Four per cent of respondents in the ECB's Bank Lending Survey said they were easing credit standards on loans to enterprises.

Stateside, Federal Reserve official John Williams said the central bank should raise interest rates in the near future as the economy recovers. Speaking Bloomberg Television with Michael McKee on Monday he said; “My own view is that the economy is still on a good trajectory.”

Fed official William Dudley speaks at 1400 BST in New York, potentially sharing his views on rates. The US will also see the release of housing starts and building permits figures at 1330 BST.

On the corporate front, Tesco tumbled after separate surveys from Kantar and Nielsen showed the supermarket has lost market share.

Mining stocks continued to slide after China data on Monday showed a slowdown in economic growth in the third quarter and a worse than expected increase in industrial production. BHP Billiton, Anglo American and Fresnillo were among the fallers.

Intercontinental Hotels surged after posting a rise in third quarter revenue per available room and expressed confidence in the outlook.

Asos climbed after reporting a better-than-expected increase in full-year pre-tax profit, as UK and international sales grew.

Whitbread jumped after serving up first-half results that beat analysts’ estimates and increased the dividend more than forecast.

Aveva rallied after Berenberg upgraded the engineering software company’s stock to ‘buy’ from ‘hold’ and lifted the price target to 2,450p from 1,977p.

Domino’s Pizza got a boost after Citigroup lifted the stock to ‘buy’ from ‘neutral’ and raised the price target to 1,170p from 760p.

Market Movers

FTSE 100 (UKX) 6,320.88 -0.50%
FTSE 250 (MCX) 16,949.87 0.19%
techMARK (TASX) 3,030.67 -0.04%

FTSE 100 - Risers

InterContinental Hotels Group (IHG) 2,429.00p 5.11%
Inmarsat (ISAT) 949.50p 2.87%
Whitbread (WTB) 4,833.00p 2.29%
TUI AG Reg Shs (DI) (TUI) 1,221.00p 1.41%
Berkeley Group Holdings (The) (BKG) 3,262.00p 1.30%
Hargreaves Lansdown (HL.) 1,406.00p 1.01%
BT Group (BT.A) 432.25p 0.96%
Barratt Developments (BDEV) 637.00p 0.79%
Taylor Wimpey (TW.) 192.10p 0.73%
United Utilities Group (UU.) 986.50p 0.66%

FTSE 100 - Fallers

BHP Billiton (BLT) 1,072.50p -2.14%
Tesco (TSCO) 189.45p -2.14%
AstraZeneca (AZN) 4,078.50p -1.88%
Royal Dutch Shell 'B' (RDSB) 1,767.00p -1.81%
Antofagasta (ANTO) 549.50p -1.79%
Glencore (GLEN) 108.05p -1.77%
Anglo American (AAL) 614.90p -1.69%
Rio Tinto (RIO) 2,399.00p -1.68%
Old Mutual (OML) 206.30p -1.67%
BP (BP.) 371.35p -1.56%

FTSE 250 - Risers

Aveva Group (AVV) 2,089.00p 4.03%
Domino's Pizza Group (DOM) 1,040.00p 3.69%
AO World (AO.) 160.10p 3.29%
Card Factory (CARD) 355.50p 3.22%
NMC Health (NMC) 792.50p 2.92%
Auto Trader Group (AUTO) 373.00p 2.78%
Big Yellow Group (BYG) 721.50p 2.63%
Aldermore Group (ALD) 260.20p 2.44%
Cineworld Group (CINE) 589.00p 2.26%
JD Sports Fashion (JD.) 960.00p 2.07%

FTSE 250 - Fallers

Tullow Oil (TLW) 212.10p -7.26%
Evraz (EVR) 80.60p -7.09%
Kaz Minerals (KAZ) 118.80p -6.53%
Vedanta Resources (VED) 512.00p -5.54%
Premier Oil (PMO) 77.85p -3.47%
Hunting (HTG) 397.70p -3.07%
Serco Group (SRP) 95.95p -2.79%
Nostrum Oil & Gas (NOG) 450.70p -2.47%
Ophir Energy (OPHR) 91.35p -2.30%
TalkTalk Telecom Group (TALK) 289.40p -1.90%