London midday: Stocks rise as BoE keeps interest rates unchanged

London stocks rose on Thursday as the Bank of England voted unanimously to leave interest rates unchanged.

The Monetary Policy Committee’s decision to keep interest rates at 0.50% was widely expected by analysts and comes amid a slowdown in the UK economy and uncertainties ahead of June’s referendum on EU membership. The BoE also maintained the size of its asset purchase programme at £375bn.

The BoE noted that inflation remains well below the 2% target, largely due to falls in energy and food which are “expected to fade over the next year”.

In the Inflation Report, released alongside the policy announcement and the meeting minutes, the BoE cut economic growth forecasts to 2.0% for 2016, down from the 2.2% it expected three months ago.

The pound rose 0.17% against the dollar to 1.4472 at 1202 BST.

In other UK news, a survey showed house price growth in the UK slowed in April as a result of the increase to stamp duty for buy-to-let and second home purchases at the start of the month. The Royal Institute of Chartered Surveyors' house price balance dropped from 42% in March to 41% in April, but nevertheless came in ahead of the 35% forecast by economists. Uncertainty surrounding the EU referendum may also have played a role but analysts believe lower supply and bank’s increased willingness to lend will ensue demand recovers quickly.

In the Eurozone, industrial output dropped 0.8% in March compared to a month ago, worse than forecasts for zero growth, Eurostat said. The decline followed falls in industrial output across Germany, France, Italy and the Netherlands.

Dennis de Jong, managing director at UFX.com, said: “The euro had already softened after poor results from the region’s big three economies and could now be in for a tough end to the week. However, there is optimism surrounding the Greek bailout following Monday’s discussions.”

The euro fell 0.14% against the dollar at 1.1410 at 1101 BST.

On the corporate front oil producers rallied as crude prices rose after a report showing a surprise fall in US weekly crude inventories soothed concerns about a supply glut.

The Energy Information Administration on Wednesday said crude-oil stockpiles fell 3.4 million barrels in the week ended 6 May, compared to analysts’ estimates for a 400,000 increase.

At 1145 BST, Brent crude rose 0.50% to $47.84 per barrel and West Texas Intermediate gained 0.68% to $46.55 per barrel.

Royal Dutch Shell and BP were the biggest risers among oil stocks.

Going the other way, Antofagasta slumped after Canaccord Genuity cut its full year earnings forecast and target price to 550p from 590p after the miners first quarter production update were below estimates.

ITV slid after saying it expected net advertising revenue to be “broadly flat” after a 13% decline in April.

Mondi rallied after posting a 14% increase in underlying first quarter operating profit to €269m, driven by strong contributions from consumer packaging.

Supergroup jumped after the owner of SuperDry reported double-digit growth for the full year.

3i Infrastructure dropped after launching a capital raise of up to £350m to fund investments.

Market Movers

FTSE 100 (UKX) 6,191.64 0.47%
FTSE 250 (MCX) 16,773.12 0.31%
techMARK (TASX) 3,088.87 0.38%

FTSE 100 - Risers

Standard Chartered (STAN) 510.30p 2.61%
Compass Group (CPG) 1,281.00p 2.40%
Royal Dutch Shell 'A' (RDSA) 1,768.00p 1.93%
Mondi (MNDI) 1,375.00p 1.93%
BP (BP.) 367.70p 1.80%
Royal Dutch Shell 'B' (RDSB) 1,777.50p 1.72%
BT Group (BT.A) 443.90p 1.60%
SSE (SSE) 1,537.00p 1.52%
Vodafone Group (VOD) 225.45p 1.42%
BAE Systems (BA.) 497.00p 1.35%

FTSE 100 - Fallers

Anglo American (AAL) 599.80p -2.83%
Centrica (CNA) 204.60p -2.57%
Admiral Group (ADM) 1,877.00p -2.39%
Sainsbury (J) (SBRY) 257.50p -2.09%
Antofagasta (ANTO) 417.60p -1.90%
Burberry Group (BRBY) 1,150.00p -1.63%
Associated British Foods (ABF) 3,058.00p -1.48%
Rio Tinto (RIO) 2,002.00p -1.45%
BHP Billiton (BLT) 825.30p -1.36%
ITV (ITV) 212.50p -1.30%

FTSE 250 - Risers

Supergroup (SGP) 1,419.00p 12.62%
Aldermore Group (ALD) 199.60p 7.89%
Polymetal International (POLY) 752.00p 7.81%
CLS Holdings (CLI) 1,688.00p 7.17%
Weir Group (WEIR) 1,169.00p 4.47%
Rank Group (RNK) 247.10p 4.09%
Centamin (DI) (CEY) 117.90p 3.88%
Amec Foster Wheeler (AMFW) 481.00p 3.75%
Indivior (INDV) 161.20p 3.20%
Sophos Group (SOPH) 224.40p 3.08%

FTSE 250 - Fallers

3i Infrastructure (3IN) 170.30p -4.86%
Carillion (CLLN) 269.30p -4.84%
Evraz (EVR) 110.70p -4.73%
DFS Furniture (DFS) 287.30p -3.36%
Fidessa Group (FDSA) 2,350.00p -2.53%
Allied Minds (ALM) 310.00p -2.49%
Barr (A.G.) (BAG) 539.50p -2.35%
Saga (SAGA) 204.70p -2.20%
Vedanta Resources (VED) 372.40p -2.00%
Woodford Patient Capital Trust (WPCT) 94.80p -1.81%