London open: Equities fall ahead of BoE's 'Super Thursday'

UK equities were in the red ahead of the Bank of England’s ‘Super Thursday’ of announcements which includes the policy decision, meeting minutes and Inflation Report.

The central bank announces its latest policy measures at 1200 BST and is expected to keep interest rates at 0.50% amid a slowdown in the UK economy and uncertainties ahead of June’s referendum on EU membership.

The minutes of the Monetary Policy Committee meeting, which will be released alongside the policy announcement, will be closely scrutinised for clues on the next move in interest rates.

“We see interest rates only reaching 1.00% at the end of 2017 and 2.00% at the end of 2018,” said Howard Archer, chief European and UK economist at IHS Global Insight.

“Should the UK vote to leave the EU in June’s referendum, monetary policy will become a lot more complicated for the Bank of England. Sterling would be likely to fall sharply, with inflationary implications. However, it is also likely that heightened uncertainty would weigh down markedly on economic activity, especially on business investment, and likely also on consumer spending. The weaker pound though would be supportive to exports.”

At the same time the BoE publishes its Quarterly Inflation Report which will outline the central bank’s medium-term economic outlook and inflation forecasts. Inflation rose just 0.5% in March, according to the Office for National Statistics, well below the BoE’s 2% target.

Elsewhere, Federal Reserve officials Loretta Mester, Eric Rosengren and Esther George speak in the US later in the session.

Meanwhile, oil prices gained after a report showed a surprise fall in US weekly crude inventories. 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 0910 BST Brent crude rose 0.25% to $47.72 per barrel and West Texas Intermediate increased 0.36% to $46.40 per barrel.

In company news, ITV’s shares fell after saying it expected net advertising revenue to be "broadly flat" for the first half of the year after a 13% decline in April.

Mondi gained as underlying first quarter operating profits at paper manufacturer rose 14% year on year to €269m with strong contributions from consumer packaging, uncoated fine paper and South Africa Division offsetting the impact of lower selling prices in certain packaging paper segments and margin pressure in fibre packaging.

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

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

Market Movers

FTSE 100 (UKX) 6,122.92 -0.64%
FTSE 250 (MCX) 16,687.14 -0.20%
techMARK (TASX) 3,060.87 -0.53%

FTSE 100 - Risers

Mondi (MNDI) 1,395.00p 3.41%
Randgold Resources Ltd. (RRS) 6,205.00p 1.80%
Fresnillo (FRES) 1,094.00p 1.77%
Dixons Carphone (DC.) 416.40p 0.41%
National Grid (NG.) 1,000.00p 0.31%
Paddy Power Betfair (PPB) 9,000.00p 0.28%
Compass Group (CPG) 1,254.00p 0.24%
Severn Trent (SVT) 2,235.00p 0.22%
Barclays (BARC) 163.80p 0.12%
Experian (EXPN) 1,266.00p 0.08%

FTSE 100 - Fallers

Centrica (CNA) 202.20p -3.71%
Sainsbury (J) (SBRY) 253.40p -3.65%
Admiral Group (ADM) 1,869.00p -2.81%
Inmarsat (ISAT) 779.50p -2.68%
Morrison (Wm) Supermarkets (MRW) 184.70p -2.48%
Associated British Foods (ABF) 3,042.00p -2.00%
Prudential (PRU) 1,283.00p -1.87%
GlaxoSmithKline (GSK) 1,447.50p -1.86%
Kingfisher (KGF) 357.30p -1.57%
Burberry Group (BRBY) 1,151.00p -1.54%

FTSE 250 - Risers

Supergroup (SGP) 1,415.00p 12.30%
CLS Holdings (CLI) 1,749.00p 11.05%
Polymetal International (POLY) 765.50p 9.75%
Aldermore Group (ALD) 195.30p 5.57%
Centamin (DI) (CEY) 119.50p 5.29%
Rank Group (RNK) 247.00p 4.04%
Sophos Group (SOPH) 222.40p 2.16%
AO World (AO.) 174.80p 1.92%
Acacia Mining (ACA) 326.10p 1.81%
Weir Group (WEIR) 1,138.00p 1.70%

FTSE 250 - Fallers

3i Infrastructure (3IN) 170.10p -4.97%
Fidessa Group (FDSA) 2,322.00p -3.69%
Carillion (CLLN) 274.10p -3.14%
TalkTalk Telecom Group (TALK) 263.00p -2.99%
Saga (SAGA) 203.50p -2.77%
AA (AA.) 261.40p -2.72%
Barr (A.G.) (BAG) 538.00p -2.62%
Interserve (IRV) 304.90p -2.62%
Aberdeen Asset Management (ADN) 260.50p -2.54%
Indivior (INDV) 153.10p -1.98%