London midday: Stocks gain ahead of FOMC and BoJ policy decisions

London stocks gained on Tuesday ahead of policy announcements by the Federal Reserve and the Bank of Japan on Wednesday.

The Federal Open Market Committee is widely expected to keep interest rates unchanged while investors seem uncertain about the BoJ’s next move. BoJ officials have suggested in recent weeks that there is room to cut rates further after taking them into negative territory for the first time earlier this year.

“While the FOMC is typically the most keenly followed central bank in the world, they risk being overshadowed tomorrow owing to the uncertainty and range of options open to the BoJ,” said Joshua Mahony, market analyst at IG.

“The decreasing liquidity available to the BoJ, coupled with the existence of negative rates means that Kuroda has little room for manoeuvre. With speculation that the BoJ will seek to steepen the yield curve by focusing more on the short term bonds, and rumours that we could see the bank focus on deeper negative rates at the expense of QE, the market uncertainty means we could see significant volatility ahead of tomorrow’s open.”

In corporate news, B&Q and Screwfix owner Kingfisher reversed earlier gains after reported an encouraging increase in first half profits and confirmed early progress in chief executive Véronique Laury's ambitious turnaround project.

Burberry’s shares advanced after unveiling its September collection at London Fashion Week on Monday night.

Tesco continued Monday's rally after Kantar data revealed the supermarket’s best 12-week sales performance in two years.

Water utility and waste management company Pennon Group was in the black as it said it is on course to meet expectations for the 2017 financial year as its portfolio of energy recovery facilities remains on track to meet its target.

Sports Direct nudged up as it agreed to undertake an independent review of its working practices and corporate governance.

Pharmaceutical giant GlaxoSmithKline was weaker after announcing that Emma Walmsley - the current chief executive of the company’s consumer healthcare division - is to be appointed CEO designate, and will succeed Andrew Witty as CEO when he retires on 31 March 2017.

FTSE 250 spreadbetting firm IG Group fell sharply after saying it performed well in the three months to the end of August in what was a challenging quarter, but reporting a drop in UK & Ireland revenue as markets became increasingly subdued after Brexit.

Barratt Developments and Bovis Homes were under the cosh on Tuesday after UBS downgraded the housebuilders to ‘neutral’ from ‘buy’ as it reviewed the sector.

On the economic data front, there are no major UK releases due but in the US housing starts are at 1330 BST.

Market Movers

FTSE 100 (UKX) 6,861.85 0.71%
FTSE 250 (MCX) 17,951.75 0.35%
techMARK (TASX) 3,546.47 0.84%

FTSE 100 - Risers

Burberry Group (BRBY) 1,362.00p 2.33%
Shire Plc (SHP) 5,298.00p 2.22%
BHP Billiton (BLT) 1,045.00p 2.20%
Land Securities Group (LAND) 1,044.00p 2.15%
CRH (CRH) 2,553.00p 1.88%
Johnson Matthey (JMAT) 3,270.00p 1.87%
British Land Company (BLND) 631.00p 1.86%
TUI AG Reg Shs (DI) (TUI) 1,080.00p 1.69%
Diageo (DGE) 2,194.50p 1.67%
Imperial Brands (IMB) 4,030.00p 1.66%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 406.50p -2.24%
easyJet (EZJ) 1,054.00p -1.50%
Kingfisher (KGF) 371.70p -1.33%
Next (NXT) 4,977.00p -1.25%
Barratt Developments (BDEV) 474.60p -0.92%
Pearson (PSON) 794.00p -0.87%
Sainsbury (J) (SBRY) 244.50p -0.81%
Persimmon (PSN) 1,758.00p -0.79%
Whitbread (WTB) 4,067.00p -0.56%
Lloyds Banking Group (LLOY) 56.74p -0.46%

FTSE 250 - Risers

TalkTalk Telecom Group (TALK) 207.50p 5.33%
GVC Holdings (GVC) 748.00p 3.67%
Mitie Group (MTO) 197.90p 3.45%
JRP Group (JRP) 119.90p 3.36%
Victrex plc (VCT) 1,547.00p 3.06%
Sports Direct International (SPD) 290.10p 2.87%
Thomas Cook Group (TCG) 75.35p 2.87%
Vectura Group (VEC) 147.70p 2.78%
Croda International (CRDA) 3,400.00p 2.78%
PayPoint (PAY) 1,024.00p 2.66%

FTSE 250 - Fallers

Regus (RGU) 271.90p -6.18%
Just Eat (JE.) 529.50p -3.73%
Hunting (HTG) 420.30p -3.18%
IG Group Holdings (IGG) 898.50p -2.97%
Euromoney Institutional Investor (ERM) 1,149.00p -2.87%
Countrywide (CWD) 227.80p -2.82%
Greencore Group (GNC) 341.70p -2.57%
AO World (AO.) 160.00p -1.84%
McCarthy & Stone (MCS) 164.00p -1.80%
Cairn Energy (CNE) 182.90p -1.77%