London midday: Stocks slide as BoE holds on interest rates

UK stocks reversed earlier gains on Thursday as the Bank of England decided to keep interest rates unchanged.

The BoE unanimously agreed to maintain rates at 0.5% and leave the asset purchase programme at £375bn, as expected by analysts.

The decision to stand pat on policy comes amid concerns about weak wage growth, low inflation and a global economic slowdown. Political uncertainty surrounding Britain’s 23 June referendum on its European Union membership was also taken into account.

The Federal Reserve decided to keep interest rates unchanged on Wednesday, as forecast, and said it now expects to raise rates twice this year. In December, when the Fed raised rates for the first time in nearly a decade, it said it expected to increase rates four times this year.

"Proceeding cautiously will allow us to verify that the labour market is continue to strength given the economic risk from abroad," said the Chair of the Federal Reserve, Janet Yellen, speaking at a press conference after the announcement.

Elsewhere, the Eurozone’s consumer price index was confirmed at a 0.2% year-on-year fall in February. On the month, however, inflation was revised to 0.2% growth from a previous estimate of 1.4% deflation.

“The news that consumer prices in the Eurozone have fallen from a year ago will fuel concerns among economists over possible deflation,” said Dennis de Jong, managing director at UFX.com

“Price growth has been marginal at best in recent months, and this was likely a factor behind the European Central Bank’s surprise stimulus package last week. ECB president Mario Draghi has already significantly scaled back inflation projections, and he’ll be concerned with the prospect that negative interest rates may be required to fend off a slide into deflation.”

Still to come, Philadelphia Fed manufacturing is at 1230 GMT, along with initial jobless claims.

In company news, mining stocks including Anglo American, Glencore, Antofagasta and BHP Billiton were the biggest risers as metal prices surged.

Rio Tinto was also higher after saying chief executive Sam Walsh will retire from the business on 1 July 2016 and will be succeeded by the chief executive of the copper and coal division Jean-Sébastien Jacques.

Going the other way, banks were the standout losers including HSBC, Barclays and Royal Bank of Scotland.

OneSavings Bank surged after saying full year underlying profit before tax was up 52% to £105.9m, and loans and advances grew 31% to £5.1bn.

GlaxoSmithKline’s shares dipped on news chief executive Andrew Witty has decided to retire from the company at the end of March next year

Market Movers

FTSE 100 (UKX) 6,159.82 -0.25%
FTSE 250 (MCX) 16,746.54 -0.04%
techMARK (TASX) 3,074.23 -0.70%

FTSE 100 - Risers

Anglo American (AAL) 536.80p 8.95%
Glencore (GLEN) 157.15p 8.91%
Antofagasta (ANTO) 533.50p 7.47%
BHP Billiton (BLT) 819.20p 7.31%
Fresnillo (FRES) 977.50p 6.77%
Randgold Resources Ltd. (RRS) 6,555.00p 6.15%
Rio Tinto (RIO) 2,032.00p 5.31%
Hikma Pharmaceuticals (HIK) 1,880.00p 3.58%
Aberdeen Asset Management (ADN) 284.00p 2.64%
Old Mutual (OML) 195.00p 2.15%

FTSE 100 - Fallers

British American Tobacco (BATS) 4,003.50p -2.76%
Barclays (BARC) 159.90p -2.50%
Royal Bank of Scotland Group (RBS) 228.50p -2.48%
HSBC Holdings (HSBA) 445.95p -2.46%
Worldpay Group (WI) (WPG) 275.50p -2.34%
GKN (GKN) 278.60p -2.25%
Standard Chartered (STAN) 446.30p -2.19%
InterContinental Hotels Group (IHG) 2,747.00p -2.10%
Hammerson (HMSO) 564.50p -2.00%
easyJet (EZJ) 1,487.00p -1.91%

FTSE 250 - Risers

OneSavings Bank (OSB) 287.50p 13.10%
Centamin (DI) (CEY) 97.35p 6.28%
Acacia Mining (ACA) 272.10p 5.55%
Vectura Group (VEC) 158.60p 4.34%
Clarkson (CKN) 1,977.00p 4.16%
Investec (INVP) 503.50p 3.69%
Galliford Try (GFRD) 1,419.00p 3.43%
Spire Healthcare Group (SPI) 348.00p 3.26%
Restaurant Group (RTN) 396.90p 3.09%
Rentokil Initial (RTO) 168.30p 2.94%

FTSE 250 - Fallers

Barr (A.G.) (BAG) 517.00p -4.35%
Mitchells & Butlers (MAB) 263.10p -3.66%
Enterprise Inns (ETI) 76.10p -2.81%
St. Modwen Properties (SMP) 305.40p -2.80%
Indivior (INDV) 162.10p -2.47%
Cairn Energy (CNE) 199.50p -2.44%
Millennium & Copthorne Hotels (MLC) 407.50p -2.44%
Thomas Cook Group (TCG) 92.75p -2.32%
B&M European Value Retail S.A. (DI) (BME) 267.70p -2.30%
LondonMetric Property (LMP) 161.10p -2.19%