London open: Stocks edge up as BT, Shell gain after results; BoE eyed

London stocks rose in early trade on Thursday, underpinned by well-received results from Shell and BT, after the Federal Reserve poured cold water on the prospect of a rate cut in March and as investors eyed a policy announcement from the Bank of England.

At 0900 GMT, the FTSE 100 was up 0.2% at 7,647.93.

Steve Clayton, head of equity funds at Hargreaves Lansdown, said: "The Fed met and held interest rates steady. This was widely expected but Fed Chair, Jay Powell, then produced a bucket of cold water and poured it, saying that the degree of confidence that the Fed would require before cutting was unlikely to be achieved before their next meeting in March.

"Interest rate bulls, many of whom have been calling for early and sustained rate cuts, effectively had their legs cut away from beneath them after that message. The market has had to push back expectations for the scale and pace of rate cutting through the rest of 2024. It’s very much a case of train delayed, not cancelled, at this point. But investors are likely to be less forgiving if we see any data emerging suggesting that the economy still has scope to keep inflation bubbling away."

The BoE announcement is due at midday, with no change expected to interest rates.

Clayton said: "The Fed’s move has very likely set the stage for a similar ‘rates on hold, don’t get excited’ message from the Bank of England when they make their next rates announcement at lunchtime today. Chairing a central bank on either side of the Atlantic is likely to be a thankless task this year. Upcoming elections put the bankers in the spotlight. If they cut, opposition parties will accuse them of paving the way for the incumbent to win. Hold tight, and the shouting will come from the other direction, arguing that the bank is needlessly restricting the economy. In the worst case, from the central banks’ perspective, the economy will be obviously in need of changed rates, in either direction, just as electorates are heading to the polls."

In equity markets, Africa-focused telecoms group Airtel Africa rallied as it said it plans to launch a share buyback worth up to $100m after a strong underlying performance in the third quarter, though currency movements weighed heavily on growth.

BT Group was also on the front foot as it reiterated annual guidance and reported flat adjusted earnings for the third quarter and a rise in revenues driven by higher prices.

Shell gushed higher as the oil giant posted a drop in annual profits but lifted its dividend and announced another $3.5bn share buyback.

Market Movers

FTSE 100 (UKX) 7,647.93 0.23%
FTSE 250 (MCX) 19,285.73 -0.37%
techMARK (TASX) 4,393.41 0.48%

FTSE 100 - Risers

Airtel Africa (AAF) 116.90p 4.19%
BT Group (BT.A) 114.80p 2.32%
Diploma (DPLM) 3,330.00p 2.15%
Phoenix Group Holdings (PHNX) 513.40p 1.58%
Shell (SHEL) 2,484.50p 1.53%
Vodafone Group (VOD) 68.28p 1.43%
CRH (CDI) (CRH) 5,678.00p 0.96%
Flutter Entertainment (DI) (FLTR) 16,440.00p 0.95%
Rolls-Royce Holdings (RR.) 303.90p 0.90%
Diageo (DGE) 2,886.00p 0.89%

FTSE 100 - Fallers

Fresnillo (FRES) 517.20p -2.71%
Ocado Group (OCDO) 532.40p -2.60%
3i Group (III) 2,417.00p -2.50%
JD Sports Fashion (JD.) 114.15p -2.48%
Endeavour Mining (EDV) 1,385.00p -1.91%
Next (NXT) 8,324.00p -1.70%
Land Securities Group (LAND) 660.60p -1.34%
SEGRO (SGRO) 872.60p -1.04%
Associated British Foods (ABF) 2,317.00p -1.03%
Persimmon (PSN) 1,450.00p -0.89%

FTSE 250 - Risers

Spirent Communications (SPT) 124.20p 4.99%
Marshalls (MSLH) 293.40p 4.56%
Aston Martin Lagonda Global Holdings (AML) 195.20p 1.88%
easyJet (EZJ) 564.80p 1.55%
Workspace Group (WKP) 529.50p 1.34%
QinetiQ Group (QQ.) 362.60p 1.23%
Ithaca Energy (ITH) 138.80p 1.17%
FirstGroup (FGP) 170.60p 1.13%
Kainos Group (KNOS) 1,159.00p 1.05%
Rotork (ROR) 316.00p 0.83%

FTSE 250 - Fallers

Paragon Banking Group (PAG) 672.50p -4.47%
Dr. Martens (DOCS) 85.25p -4.32%
Bytes Technology Group (BYIT) 631.00p -3.88%
RHI Magnesita N.V. (DI) (RHIM) 3,262.00p -3.03%
Coats Group (COA) 69.60p -2.79%
Hipgnosis Songs Fund Limited NPV (SONG) 67.20p -2.61%
TR Property Inv Trust (TRY) 320.00p -2.44%
Great Portland Estates (GPE) 407.40p -2.30%
Ferrexpo (FXPO) 84.85p -2.25%
Pets at Home Group (PETS) 274.20p -2.14%