London midday: Stocks rise as traders continue to digest BoE and Fed announcements
London stocks were rising slightly on Friday as investors continued to mull over policy announcements from the Federal Reserve and the Bank of England.
The FTSE 100 edged up 0.31% to 7,020.87 points at 1210 GMT.
At the same time oil prices recovered with Brent crude up 0.47% to $54.28 per barrel and West Texas Intermediate up 0.07% to $50.94 per barrel.
Stocks rallied on Thursday after the Bank of England unanimously voted to keep interest rates and its asset purchase programme unchanged but said it was ready to tighten or loosen policy if needed to respond to any changes in the economic outlook.
On Wednesday, the Federal Reserve raised interest rates to between 0.50% and 0.75% from 0.25% to 0.50% and signalled that more hikes were on the cards for next year than it had at the meeting in September. A further three hikes were projected in 2018, followed by another three in 2019.
The dollar surged against other major currencies following the Fed’s announcement.
“Focusing on today, it’s all about the dollar with the improving sentiment towards the US economy and heightened rate hike expectations providing a firm foundation for bulls to install heavy rounds of buying on the Dollar Index,” said FXTM research analyst Lukman Otunuga.
“Repeatedly positive US data and rising optimism over fiscal stimulus measures boosting US growth have been the drivers behind the greenback’s awe inspiring rebound in the fourth quarter.”
Elsewhere, Eurostat confirmed inflation rose 0.6% year-on-year in November, in line with its 'flash' estimate provided last month and compared to a 0.5% rise in October.
The European Central Bank, which is targeting 2% inflation, last week decided to expand its asset purchase programme to address continued inflationary pressures.
Meanwhile, the CBI’s industrial trends survey on the UK manufacturing sector came in better than expected for December.
The orders balance was 0 with 21% of businesses reporting orders were above normal and 21% saying they were below. It beat the -5% reading predicted by economists and marked the highest level in 20 months.
CBI’s chief economist, Rain Newton-Smith, said: “It’s good to see our manufacturers ending the year on a high note with growth in production the strongest since summer 2014 and total orders still robust.
“But the weakness of sterling is pushing up the cost of imports, and our survey shows strong signs of this feeding through to higher factory gate prices.”
On the company front, Micro Focus International slumped after UBS cut its rating on the stock to ‘neutral’ from ‘buy’ citing near-term risks.
Trinity Mirror shares gained after saying its full-year performance is likely to exceed expectations.
Rentokil was on the front foot after agreeing to merge its Workwear and Hygiene divisions with Germany's Haniel & Cie Holding Co.
Market Movers
FTSE 100 (UKX) 7,034.88 0.51%
FTSE 250 (MCX) 17,811.40 0.24%
techMARK (TASX) 3,351.97 0.87%
FTSE 100 - Risers
Old Mutual (OML) 197.60p 2.81%
Shire Plc (SHP) 4,623.50p 2.68%
Hikma Pharmaceuticals (HIK) 1,786.00p 2.23%
Burberry Group (BRBY) 1,480.00p 1.79%
Standard Chartered (STAN) 699.20p 1.69%
Randgold Resources Ltd. (RRS) 5,560.00p 1.65%
AstraZeneca (AZN) 4,468.50p 1.56%
GlaxoSmithKline (GSK) 1,538.00p 1.48%
BP (BP.) 486.45p 1.45%
Rio Tinto (RIO) 3,127.50p 1.26%
FTSE 100 - Fallers
Micro Focus International (MCRO) 2,161.00p -3.31%
Dixons Carphone (DC.) 338.30p -2.20%
Barratt Developments (BDEV) 456.80p -1.53%
Fresnillo (FRES) 1,100.00p -1.26%
Taylor Wimpey (TW.) 153.50p -1.16%
Worldpay Group (WPG) 266.50p -1.04%
Whitbread (WTB) 3,612.00p -1.01%
Tesco (TSCO) 203.15p -0.85%
Antofagasta (ANTO) 678.50p -0.73%
Imperial Brands (IMB) 3,492.00p -0.72%
FTSE 250 - Risers
CMC Markets (CMCX) 113.00p 10.78%
Rentokil Initial (RTO) 225.10p 6.53%
PZ Cussons (PZC) 325.90p 5.54%
Cobham (COB) 173.20p 5.10%
Evraz (EVR) 269.00p 4.38%
Brown (N.) Group (BWNG) 216.20p 3.69%
Tullow Oil (TLW) 322.60p 3.07%
JRP Group (JRP) 144.90p 2.84%
Centamin (DI) (CEY) 118.10p 2.79%
Shawbrook Group (SHAW) 261.00p 2.76%
FTSE 250 - Fallers
Hochschild Mining (HOC) 208.70p -7.08%
Just Eat (JE.) 567.00p -5.42%
International Personal Finance (IPF) 166.80p -4.14%
GVC Holdings (GVC) 640.00p -3.47%
Auto Trader Group (AUTO) 392.80p -2.56%
SSP Group (SSPG) 378.60p -2.22%
Zoopla Property Group (ZPLA) 315.70p -1.99%
Moneysupermarket.com Group (MONY) 282.90p -1.84%
Sophos Group (SOPH) 253.40p -1.82%
Rightmove (RMV) 3,756.00p -1.73%