London midday: Stocks fall on investors' jitters ahead of central bank decisions

London stocks fell on Monday as investors exercised caution ahead of policy decisions from the Bank of England and the Federal Reserve.

At midday the FTSE 100 dropped 0.43% to 6,966.20 points while the pound dipped 0.16% against the dollar to $1.2166.

The BoE announces its policy decision on Thursday, along with its quarterly inflation report. The central bank is expected to keep interest rates unchanged after BoE Governor Mark Carney said policymakers would take the recent weakening of the pound into consideration.

Ahead of the policy announcement, reports have suggested that Carney is considering stepping down in 2018, before his eight-year term is finished.

Carney has been criticised for being too political over Brexit and for getting his economic forecasts wrong in the lead up to and in the aftermath of the referendum. A spokesman told the BBC he will make a decision by the end of the year.

In the US, the market is eagerly awaiting the Fed’s interest rates announcement on Wednesday. While no change to policy is expected, traders will be carefully dissecting the Fed’s statement for any hints on the timing of the next interest rate hike.

News surrounding the presidential election is also being closely monitored with just one week to go until the showdown between Hillary Clinton and Donald Trump. The latest news on the Federal Bureau of Investigation probe into Clinton’s emails sent stocks lower in the US on Friday as she is seen as the more market-friendly contender to win the election.

Turning to Monday’s agenda, BoE data showed mortgage approvals for house purchases in Britain increased to 62,932 in September from 60,984 in August, the highest level since June and above economists´ forecast for 61,500 approvals.

The BOE data also revealed consumer lending growth slowed and missed estimates. It rose by £1.405bn in September compared to forecasts of £1.5bn and the previous month’s £1.635bn increase.

Business confidence in Britain has improved since the Brexit vote, a survey revealed. The Lloyds business confidence barometer rose to 37 in October from 24 a month earlier.

German retail sales, adjusted for inflation and seasonal swings, declined 1.4% in September from August, Destatis said. Economists had predicted a 0.2% increase. Compared with September last year, retail sales grew 0.4%, missing forecasts for a 1.5% rise.

Eurozone inflation rose an annualised 0.5% in October following a 0.4% increase in September, as expected by analysts. However, it remained well below the European Central Bank’s target of just below 2%.

Eurozone gross domestic product in the third quarter edged up 0.3% quarter-on-quarter and 1.6% year-on-year, both unchanged from the previous quarter’s growth and in line with estimates.

“The preliminary flash estimate of Eurozone Q3 GDP supports the message from earlier country data that the pace of growth remains fairly slow,” according to Capital Economics. “So it is no surprise that October’s inflation data show that underlying price pressures are still very weak.”

Meanwhile, oil prices edged lower after producers outside of OPEC made no commitment to join the cartel in curbing output to prop up prices during a meeting in Vienna on Saturday.

Brent crude fell 0.75% to $49.34 per barrel and West Texas Intermediate dropped 0.55% to $48.43 per barrel at 1141 BST.

On the company front, WPP rallied after reporting a 23.4% increase in third quarter revenues, although like-for-like sales growth slowed.

Essentra gained as it appointed Paul Forman as chief executive to succeed Colin Day, who steps down on 31 December.

Centamin edged higher as it said it expects 2016 gold production to be towards the upper end of its guidance of between 520,000 and 540,000 ounces as it reported a 41% increase in third quarter output.

Next was the biggest faller on the FTSE 100 ahead of its third quarter results on Wednesday.

Market Movers

FTSE 100 (UKX) 6,966.20 -0.43%
FTSE 250 (MCX) 17,530.29 -0.65%
techMARK (TASX) 3,373.09 -0.67%

FTSE 100 - Risers

WPP (WPP) 1,771.00p 3.69%
Standard Chartered (STAN) 715.90p 1.89%
Antofagasta (ANTO) 539.00p 1.51%
Anglo American (AAL) 1,115.00p 1.41%
Randgold Resources Ltd. (RRS) 7,080.00p 1.14%
3i Group (III) 672.50p 1.13%
Old Mutual (OML) 201.50p 1.10%
Carnival (CCL) 3,917.00p 1.03%
Bunzl (BNZL) 2,197.00p 1.01%
BHP Billiton (BLT) 1,244.50p 0.93%

FTSE 100 - Fallers

Next (NXT) 4,796.00p -3.58%
Travis Perkins (TPK) 1,322.00p -2.51%
Royal Bank of Scotland Group (RBS) 190.30p -1.91%
Marks & Spencer Group (MKS) 340.10p -1.90%
easyJet (EZJ) 935.50p -1.78%
Hikma Pharmaceuticals (HIK) 1,751.00p -1.63%
BP (BP.) 484.20p -1.62%
Associated British Foods (ABF) 2,467.00p -1.60%
Taylor Wimpey (TW.) 140.90p -1.54%
Sainsbury (J) (SBRY) 250.10p -1.54%

FTSE 250 - Risers

Virgin Money Holdings (UK) (VM.) 337.00p 2.90%
Just Eat (JE.) 549.50p 2.71%
Hunting (HTG) 502.50p 1.95%
Essentra (ESNT) 508.00p 1.40%
Investec (INVP) 504.50p 1.31%
P2P Global Investments (P2P) 821.00p 1.23%
Ibstock (IBST) 164.20p 1.17%
BBA Aviation (BBA) 255.90p 0.91%
BH Macro Ltd. GBP Shares (BHMG) 1,900.00p 0.80%
UBM (UBM) 715.00p 0.70%

FTSE 250 - Fallers

NCC Group (NCC) 190.50p -3.79%
Laird (LRD) 146.20p -3.18%
Tullow Oil (TLW) 272.40p -3.06%
International Personal Finance (IPF) 291.90p -2.70%
Redrow (RDW) 375.40p -2.67%
Fisher (James) & Sons (FSJ) 1,598.00p -2.62%
Countrywide (CWD) 177.10p -2.59%
IP Group (IPO) 152.00p -2.44%
FirstGroup (FGP) 110.80p -2.38%
Kaz Minerals (KAZ) 289.30p -2.33%