London open: Stocks rally ahead of BoE policy announcement

London stocks rallied in early trade on Thursday, taking their cue from upbeat sessions in the US and Asia, after the Federal Reserve delivered on taper expectations, with all eyes on the latest policy announcement from the Bank of England.

At 0845 GMT, the FTSE 100 was 1% higher at 7,249.10.

Richard Hunter, head of markets at Interactive Investor, said: "Confirmation that the Federal Reserve is to tap slightly harder on the monetary brakes was both expected and well received, as investors appreciated the increased clarity of the road ahead.

"The tapering programme should now end in March, easing the way to introduce interest rate hikes in an effort to curb inflation, which is now running hot. At the same time, the Fed left the door open not only to consider the impact of the Omicron variant as the economic damage becomes clearer, but also noting that maximum employment was required before hikes could be entertained.

"The UK interest rate decision later today is poised on a knife edge, with the implications of the variant, high inflation, continued pressure given tightness in the labour market and supply chain bottlenecks all being taken into consideration.

"While any such hike would likely be moderate, and with a time lag until it washed through to the wider economy, it would nonetheless signal that inflation needs to be tackled. Even so, the current uncertainty regarding the variant threatens to derail the UK’s economic recovery and the consensus remains that the Bank of England will sit on its hands until the February meeting when the picture may be clearer."

The BoE rate announcement is due at midday, while the European Central Bank will announce its rate decision at 1245 GMT.

In equity markets, Domino’s Pizza surged to the top of the FTSE 250 after it settled a long-running dispute with its franchisees, opening the way for more stores and the adoption of new technology at the fast-food chain.

UK fund manager Schroders gained after confirming it was in talks with renewable energy investor Greencoat Capital about taking a "significant" stake in the company. Sky News had reported that Schroders was set to splash out £360m to buy a 75% stake in Greencoat.

On the downside, IntegraFin slumped even as it reported a rise in full-year profits after a 27% jump in funds under direction.

B&M European Value Retail, AB Foods, Mitie, Sirius Real Estate, United Utilities and Tritax EuroBox were all in the red as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 7,249.10 1.09%
FTSE 250 (MCX) 22,694.78 1.16%
techMARK (TASX) 4,428.68 1.24%

FTSE 100 - Risers

Darktrace (DARK) 414.40p 3.96%
Aveva Group (AVV) 3,382.00p 3.39%
Flutter Entertainment (CDI) (FLTR) 11,010.00p 3.28%
Antofagasta (ANTO) 1,349.00p 3.13%
Scottish Mortgage Inv Trust (SMT) 1,400.00p 3.02%
Standard Chartered (STAN) 426.00p 2.90%
BP (BP.) 339.55p 2.61%
Evraz (EVR) 613.20p 2.58%
Glencore (GLEN) 367.60p 2.57%
Ashtead Group (AHT) 6,098.00p 2.49%

FTSE 100 - Fallers

B&M European Value Retail S.A. (DI) (BME) 613.80p -2.73%
United Utilities Group (UU.) 1,103.00p -1.34%
Associated British Foods (ABF) 1,879.00p -0.63%
Hikma Pharmaceuticals (HIK) 2,214.00p -0.58%
Unilever (ULVR) 3,954.00p -0.39%
Rentokil Initial (RTO) 520.00p -0.38%
Next (NXT) 7,712.00p -0.31%
Experian (EXPN) 3,558.00p -0.25%
Relx plc (REL) 2,370.00p -0.17%
Avast (AVST) 612.60p -0.10%

FTSE 250 - Risers

Domino's Pizza Group (DOM) 414.40p 19.77%
Cineworld Group (CINE) 29.99p 9.05%
Dunelm Group (DNLM) 1,386.00p 5.64%
Restaurant Group (RTN) 76.90p 4.34%
Indivior (INDV) 249.40p 3.49%
Edinburgh Worldwide Inv Trust (EWI) 300.00p 3.45%
Kainos Group (KNOS) 1,838.00p 3.37%
Polar Capital Technology Trust (PCT) 2,682.00p 3.31%
Trainline (TRN) 267.80p 3.00%
Volution Group (FAN) 515.00p 3.00%

FTSE 250 - Fallers

IntegraFin Holding (IHP) 568.50p -5.56%
AO World (AO.) 87.10p -3.70%
Mitie Group (MTO) 59.30p -1.00%
PZ Cussons (PZC) 192.00p -0.72%
Britvic (BVIC) 915.00p -0.54%
BH Macro Ltd. GBP Shares (BHMG) 3,700.00p -0.54%
Future (FUTR) 3,538.00p -0.51%
Moonpig Group (MOON) 357.00p -0.45%
Sirius Real Estate Ltd. (SRE) 135.20p -0.44%
Cranswick (CWK) 3,656.00p -0.33%