London open: Stocks fall ahead of BoE and Fed interest rate decisions

London stocks fell on Monday as investors looked ahead to the Bank of England and Federal Reserve policy decisions later in the week.

At 0830 GMT, the FTSE 100 fell 0.27% to 6977.38 points.

The Fed announces its interest rate decision on Wednesday while the BoE reveals its policy on Thursday.

“While no changes are expected from any central bank, this week’s Bank of England meeting has taken on greater importance given the weekend reports that Bank of England governor Mark Carney may well be considering his position in light of recent negative comments from some UK Brexit supporting politicians,” said Michael Hewson, chief market analyst at CMC Markets.

Carney is reportedly considering stepping down before his eight-year term is up as he has been criticised for being too political over Brexit and for getting his economic forecasts wrong in the lead up to and the aftermath of the referendum. A spokesman told the BBC he will make a decision by the end of the year.

Hewson added: “While it is true that the UK economy has performed much better than a lot of the forecasts in the lead up and aftermath of the vote, it is also true that the Bank of England Governor was the only adult in the room in the immediate aftermath of the referendum vote.

“That is why it is only right that Mr Carney will have to justify later this week in the latest interest rate decision and quarterly inflation report why the Bank got its forecasts so wrong, though it hasn’t been unique in this regard, as most other forecasters didn’t do that much better.”

Turning to Monday’s agenda, a survey showed business confidence in Britain has improved since the Brexit vote. The Lloyds business confidence barometer rose to 37 in October from 24 a month earlier.

A separate survey by the bank revealed housebuilders remained optimistic despite market uncertainty. Optimism about the future of the housebuilding industry has picked up slightly from 7.1 last year to 7.2 in 2016, with 10 representing the highest level of expectation.

German retail sales, adjusted for inflation and seasonal swings, declined 1.4% in September from August, Destatis said. Economists had predicted a 0.2% increase. Compared with September last year, retail sales grew 0.4%, missing forecasts for a 1.5% rise.

Still to come, UK mortgage approvals data will be released at 0930 GMT, Eurozone inflation data is due at 1000 GMT and US personal spending and income data will be published at 1230 GMT.

Meanwhile, oil prices edged lower after producers outside of OPEC made no commitment to join the cartel in curbing output to prop up prices during a meeting in Vienna on Saturday. Brent crude fell 0.72% to $49.35 per barrel and West Texas Intermediate dropped 0.64% to $48.39 per barrel at 0811 BST.

On the company front, Centamin said it expects 2016 gold production to be towards the upper end of its guidance of between 520,000 and 540,000 ounces as it reported a 41% increase in third quarter output. The group said gold production in the third quarter was 148,674 ounces, up 41% on the same period a year ago and up 6% on the previous quarter.

Like-for-like sales growth slowed in the third quarter at WPP, though profit margins were above target. Helped by sterling weakness, the advertising colossus reported quarterly revenues grew 23.4%, with constant currency growth of 7.6% and 4.4% growth from acquisitions, though LFL net sales growth was 2.8% compared with 3.8% in the first half.

Essentra has appointed Paul Forman as chief executive to succeed Colin Day, who steps down on 31 December. He will begin on 1 January and he joins the company from industrial thread manufacturer Coats, where he has been chief executive since 2010.

Online trader IG Group announced it has completed the acquisition of DailyFX, a news and research portal, from FXCM for $40m. The FTSE 250 company announced in September that it was to buy DailyFX as parts of its aim to become the default choice for traders and that the acquisition would enhance its ability to gain retain and gain new clients.

Market Movers

FTSE 100 (UKX) 6977.38 -0.27%
FTSE 250 (MCX) 17,544.22 -0.56%
techMARK (TASX) 3,380.76 -0.44%

FTSE 100 - Risers

WPP (WPP) 1,772.00p 3.75%
International Consolidated Airlines Group SA (CDI) (IAG) 446.10p 1.85%
Burberry Group (BRBY) 1,494.00p 1.56%
Fresnillo (FRES) 1,637.00p 1.55%
Randgold Resources Ltd. (RRS) 7,100.00p 1.43%
Anglo American (AAL) 1,115.00p 1.41%
Glencore (GLEN) 247.15p 1.08%
British American Tobacco (BATS) 4,743.00p 0.75%
Antofagasta (ANTO) 535.00p 0.75%
Polymetal International (POLY) 892.00p 0.68%

FTSE 100 - Fallers

Next (NXT) 4,883.00p -1.83%
Barratt Developments (BDEV) 450.10p -1.45%
Prudential (PRU) 1,349.50p -1.42%
Travis Perkins (TPK) 1,337.00p -1.40%
British Land Company (BLND) 582.00p -1.36%
Sainsbury (J) (SBRY) 250.80p -1.26%
Rolls-Royce Holdings (RR.) 726.00p -1.16%
Lloyds Banking Group (LLOY) 57.12p -1.07%
BP (BP.) 486.90p -1.07%
Taylor Wimpey (TW.) 141.60p -1.05%

FTSE 250 - Risers

Essentra (ESNT) 520.50p 3.89%
Centamin (DI) (CEY) 159.00p 1.86%
Countryside Properties (CSP) 238.60p 1.36%
Just Eat (JE.) 541.50p 1.21%
DFS Furniture (DFS) 256.90p 1.10%
BBA Aviation (BBA) 256.00p 0.95%
Virgin Money Holdings (UK) (VM.) 330.30p 0.85%
Jupiter Fund Management (JUP) 437.00p 0.81%
Ibstock (IBST) 163.60p 0.80%
Tate & Lyle (TATE) 782.00p 0.77%

FTSE 250 - Fallers

Ladbrokes (LAD) 131.20p -3.03%
Ted Baker (TED) 2,445.00p -2.78%
Sophos Group (SOPH) 225.40p -2.76%
Redrow (RDW) 376.60p -2.36%
Metro Bank (MTRO) 2,737.00p -2.11%
Cobham (COB) 142.10p -1.93%
Rank Group (RNK) 191.50p -1.90%
Fisher (James) & Sons (FSJ) 1,610.00p -1.89%
PayPoint (PAY) 1,058.00p -1.86%
Euromoney Institutional Investor (ERM) 1,015.00p -1.84%