London open: Stocks flat ahead of BoE rate announcement

London stocks were steady in early trade on Thursday as investors refrained from making any big bets either way ahead of the latest policy announcement from the Bank of England.

At 0850 BST, the FTSE 100 was flat at 7,446.00.

Neil Wilson, chief market analyst at Markets.com, said: "The Bank of England is expected to raise rates by 50bps today, but in a dovish fashion with big cautionary remarks about the outlook. Inflation expectations are likely to move up for this year, but the BoE won’t want the market to think it’s going super-hawkish.

"If it does deliver a more hawkish tone, GBP can get a lift but the base case for a ‘dovish’ 50bps hike could see sterling sold on the fact. Couple of things to consider: this would be the biggest hike since 1995. But inflation hit 9.4% in June and forecast to rise further this year. It’s not got nothing left to do if it wants any credibility.

"The BoE has been dripping rate hikes in a piecemeal fashion that has done nothing for inflation nor sterling because it’s been worried about the economic outlook (because, get this, of inflation!) - it requires a much more forceful message but we won’t get it today from Andrew Bailey, who remains out of his depth in terms of communicating policy."

In equity markets, Hikma Pharmaceuticals was under the cosh after it cut its revenue guidance for the Generics business to between $650m and $675m from between $710m and $750m.

Rolls-Royce was also in the red after the engine maker reported a drop in first-half underlying but backed its full-year guidance amid expectations of an improvement in the civil aerospace division.

Mondi fell even as the paper and packaging group reported a sharp rise in interim profits on the back of higher prices due to reduced timber supplies.

Commodity trading and mining company Glencore was also weaker even as it posted a massive $10.3bn rise in interim core profits on the back of record prices for coal and gas and said it would return $4.5bn to shareholders.

On the upside, Phoenix Group gained after saying it was buying closed book UK life insurance company Sun Life for £248m.

Next was on the front foot after the retailer lifted its full-year profit guidance by £10m to £860m.

Outsourcer Serco rallied after upping its full-year guidance slightly to reflect trading in May and June, as it said strong growth across the business was offsetting the wind-down of the Test & Trace business.

Market Movers

FTSE 100 (UKX) 7,446.00 0.00%
FTSE 250 (MCX) 20,134.87 0.58%
techMARK (TASX) 4,359.70 0.40%

FTSE 100 - Risers

Smith & Nephew (SN.) 1,080.50p 2.90%
Ocado Group (OCDO) 936.80p 2.70%
JD Sports Fashion (JD.) 135.20p 2.70%
Next (NXT) 6,920.00p 2.58%
Phoenix Group Holdings (PHNX) 668.20p 2.36%
Sage Group (SGE) 743.40p 2.00%
Auto Trader Group (AUTO) 661.40p 1.85%
Flutter Entertainment (CDI) (FLTR) 8,508.00p 1.79%
Burberry Group (BRBY) 1,804.00p 1.78%
Ashtead Group (AHT) 4,573.00p 1.71%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 1,602.50p -9.05%
Rolls-Royce Holdings (RR.) 86.81p -4.38%
Mondi (MNDI) 1,541.50p -4.25%
BT Group (BT.A) 155.10p -3.96%
Unilever (ULVR) 3,963.00p -1.30%
Reckitt Benckiser Group (RKT) 6,722.00p -1.26%
Endeavour Mining (EDV) 1,635.00p -1.15%
Schroders (SDR) 2,956.00p -1.14%
Informa (INF) 594.80p -1.03%
Airtel Africa (AAF) 152.70p -0.97%

FTSE 250 - Risers

Convatec Group (CTEC) 244.60p 6.26%
Dr. Martens (DOCS) 271.60p 3.66%
Pets at Home Group (PETS) 346.40p 3.59%
Direct Line Insurance Group (DLG) 208.80p 3.47%
TUI AG Reg Shs (DI) (TUI) 140.60p 3.23%
Carnival (CCL) 729.00p 3.20%
Petrofac Ltd. (PFC) 116.90p 2.90%
Serco Group (SRP) 190.30p 2.86%
ASOS (ASC) 1,097.00p 2.81%
Hiscox Limited (DI) (HSX) 894.20p 2.78%

FTSE 250 - Fallers

Bytes Technology Group (BYIT) 430.00p -3.54%
Ferrexpo (FXPO) 135.20p -3.50%
Babcock International Group (BAB) 343.60p -2.83%
Vesuvius (VSVS) 329.60p -2.43%
UK Commercial Property Reit Limited (UKCM) 73.50p -2.39%
Balanced Commercial Property Trust Limited (BCPT) 115.20p -2.21%
Tyman (TYMN) 259.00p -1.89%
Tullow Oil (TLW) 49.26p -1.87%
AVI Global Trust (AGT) 186.00p -1.48%
FirstGroup (FGP) 131.90p -1.35%