London midday: Stocks stay up, sterling falls as BoE disputes bond sale delay

London stocks were still in the black by midday on Tuesday, but sterling fell and gilt yields rose after the Bank of England appeared to deny reports that it wanted to delay selling billions of pounds of government bonds.

The FTSE 100 was up 0.9% at 6,978.97, while the pound was 0.8% lower versus the dollar at 1.1263,

The central bank acquired £838bn of gilts during its quantitative easing programme. It had intended to start selling them on 6 October, but the sale was delayed until the end of this month in light of the turmoil caused by the mini-budget.

On Tuesday, the Financial Times reported that the central bank has since bowed to investor pressure and agreed to extend the delay further, until the market becomes calmer. The newspaper said that officials had made the decision after judging gilt markets to be "very distressed".

But in a brief statement, the BoE said: "This morning’s FT report, that the BoE has decided to delay MPC gilt sales (QT), is inaccurate." A spokesperson declined to comment further.

Bonds came under pressure again after the BoE comment, with the 30-year yield up five basis points, having earlier fallen to as low as 4.32%. Still, stock markets maintained their gains after new chancellor Jeremey Hunt scrapped his predecessor’s so-called mini-budget on Monday.

Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown: "The new sense of calm emanating from the UK has helped spread ripples of optimism across global markets, helped by a jolt of earnings cheer. A sea of green is lapping over indices, as concerns about contagion from a bond market meltdown abate. Bank of America’s upbeat assessment of the US economy as it posted a robust set of numbers was also a reassuring marker for investors.

"American consumers are still showing resilience in their spending habits, which is being taken as an indication that either a recession is less likely or will be shallower than has been feared. As interest rates tramp upwards, they are providing a boost to net income margins and helping offset weakness in the Bank’s investment division."

In equity markets, advertising giant WPP racked up solid gains as French peer Publicis lifted its 2022 guidance after a better-than-expected third-quarter performance.

Clay bricks manufacturer Ibstock rallied as it said third-quarter trading was ahead of its expectations, with "robust" demand patterns and a strong operational performance.

Price comparison website Moneysupermarket pushed higher after saying annual core earnings would be at the upper end of expectations as third-quarter trading came in ahead of expectations, driven by customers switching financial products.

Moonpig was boosted by an initiation at ‘buy’ by Canaccord.

On the downside, housebuilder Bellway fell as it reported a jump in full-year profit amid record revenue and completions, but warned that demand was moderating. Peers Barratt, Persimmon, Taylor Wimpey and Vistry also lost ground.

888 Holdings was weaker after it said group revenues declined 7% year-on-year to £449.0m in the three months ended 30 September, primarily due to enhanced UK online player safety measures and the shuttering of its Dutch operations.

Market Movers

FTSE 100 (UKX) 6,978.97 0.85%
FTSE 250 (MCX) 17,589.61 0.50%
techMARK (TASX) 4,158.74 0.61%

FTSE 100 - Risers

Smurfit Kappa Group (CDI) (SKG) 2,858.00p 6.84%
WPP (WPP) 783.80p 3.98%
United Utilities Group (UU.) 918.60p 3.01%
Prudential (PRU) 910.00p 2.94%
Halma (HLMA) 2,085.00p 2.81%
Ashtead Group (AHT) 4,384.00p 2.69%
Pershing Square Holdings Ltd NPV (PSH) 2,680.00p 2.68%
CRH (CDI) (CRH) 2,975.50p 2.67%
Spirax-Sarco Engineering (SPX) 10,845.00p 2.65%
Scottish Mortgage Inv Trust (SMT) 751.20p 2.48%

FTSE 100 - Fallers

Barratt Developments (BDEV) 353.90p -1.69%
BAE Systems (BA.) 777.80p -1.59%
Centrica (CNA) 71.30p -1.38%
Persimmon (PSN) 1,252.00p -1.38%
Airtel Africa (AAF) 126.30p -1.10%
Fresnillo (FRES) 700.60p -1.05%
Taylor Wimpey (TW.) 90.58p -0.77%
Unite Group (UTG) 850.00p -0.70%
Imperial Brands (IMB) 1,993.00p -0.70%
Berkeley Group Holdings (The) (BKG) 3,439.00p -0.61%

FTSE 250 - Risers

Moneysupermarket.com Group (MONY) 213.60p 7.55%
Ibstock (IBST) 159.60p 5.21%
Moonpig Group (MOON) 137.30p 4.81%
Ferrexpo (FXPO) 120.30p 4.52%
Virgin Money UK (VMUK) 134.65p 3.02%
Smithson Investment Trust (SSON) 1,221.00p 2.95%
Kainos Group (KNOS) 1,275.00p 2.82%
Future (FUTR) 1,339.00p 2.61%
Rathbones Group (RAT) 1,762.00p 2.56%
NCC Group (NCC) 220.50p 2.56%

FTSE 250 - Fallers

Syncona Limited NPV (SYNC) 170.00p -5.45%
ASOS (ASC) 496.20p -4.21%
Darktrace (DARK) 334.00p -2.74%
888 Holdings (DI) (888) 87.90p -2.55%
Trainline (TRN) 334.10p -2.51%
HICL Infrastructure (HICL) 157.40p -2.48%
NB Private Equity Partners Ltd. (NBPE) 1,595.00p -2.45%
Vistry Group (VTY) 552.50p -2.30%
Ninety One (N91) 182.50p -2.20%
Warehouse Reit (WHR) 114.20p -2.06%