London open: Stocks rally ahead of BoE policy announcement

London stocks racked up healthy gains in early trade on Thursday following a strong finish on Wall Street, as investors eyed the latest policy announcement from the Bank of England.

At 0930 BST, the FTSE 100 was up 1.3% at 7,586.82.

Victoria Scholar, head of Investment at Interactive Investor, said: "European markets are trading sharply higher, buoyed by positive momentum last night that lifted US stocks after the Fed raised rates by 50 basis points for the first time since 2000 and indicated that there was more hawkishness to come, reassuring the market that the central bank is serious about tackling inflation.

"The Bank of England is expected to carry out another quarter point interest rate rise today, lifting its Bank Rate from 0.75% to 1%, the highest level since 2009. There is an unlikely outside chance that the central bank follows the Fed last night with a more aggressive 50 basis point hike. However, it is more likely that the vote split will become less one sided with the potential for certain committee members to turn more cautious and dovish in light of the increasingly gloomy economic outlook. At the last meeting Deputy Governor Jon Cunliffe was the sole dovish dissenter.

"It will also be interesting to see whether after today’s decision, there will be a shift in market expectations for where the bank rate will finish the year. At the moment the market is pricing in a series of further rate hikes to take the bank rate to around 2.25-2.5% by year-end, sharply at odds with the expectations of more prudent economists who are forecasting the bank rate to reach just 1.5% by early 2023."

In equity markets, paper and packaging group Mondi surged to the top of the FTSE 100 after reporting a strong first-quarter performance late on Wednesday and announcing plans to sell its Russian assets.

Shell gushed higher after it posted record first-quarter profits driven by surging oil and gas prices which have been inflated by the Ukraine war.

Endeavour Mining pushed higher as it reported a strong start to the year and said both production and all-in sustaining costs were well positioned to meet full-year guidance.

Melrose advanced after a well-received trading statement and PureTech Health was up after announcing the launch of a $50m share buyback programme.

Gambling software development company Playtech rallied as it said adjusted EBITDA for the first three months of the year topped €100m and pointed to some progress in takeover talks with investor group TTB.

Housebuilder Barratt Developments also gained after saying it was on track to meet its expectations as it highlighted strong demand.

On the downside, Hikma Pharmaceuticals tumbled after it cut guidance for its generics business, citing a delay to the launch of a narcolepsy treatment.

Virgin Money, Hiscox and Domino’s all lost ground after updates.

Market Movers

FTSE 100 (UKX) 7,586.82 1.25%
FTSE 250 (MCX) 20,477.59 1.28%
techMARK (TASX) 4,415.04 0.89%

FTSE 100 - Risers

Mondi (MNDI) 1,630.00p 8.52%
Endeavour Mining (EDV) 2,082.00p 7.26%
Anglo American (AAL) 3,666.50p 4.53%
Melrose Industries (MRO) 119.80p 3.63%
Fresnillo (FRES) 793.40p 3.50%
Aveva Group (AVV) 2,258.00p 3.25%
Scottish Mortgage Inv Trust (SMT) 909.60p 3.25%
Smurfit Kappa Group (CDI) (SKG) 3,511.00p 3.14%
International Consolidated Airlines Group SA (CDI) (IAG) 149.98p 3.09%
Shell (SHEL) 2,293.50p 3.08%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 1,668.50p -9.93%
Admiral Group (ADM) 2,361.00p -5.29%
Avast (AVST) 503.60p -0.94%
BAE Systems (BA.) 763.00p -0.34%
Next (NXT) 6,068.00p -0.30%
HSBC Holdings (HSBA) 514.10p -0.25%
M&G (MNG) 214.10p -0.23%
ITV (ITV) 74.82p -0.11%
BT Group (BT.A) 184.35p -0.05%
Meggitt (MGGT) 771.40p 0.05%

FTSE 250 - Risers

PureTech Health (PRTC) 183.40p 9.04%
Morgan Advanced Materials (MGAM) 292.50p 6.95%
Playtech (PTEC) 540.50p 4.95%
BlackRock World Mining Trust (BRWM) 724.00p 4.62%
HGCapital Trust (HGT) 408.00p 3.95%
Polar Capital Technology Trust (PCT) 2,075.00p 3.85%
Impax Environmental Markets (IEM) 435.00p 3.82%
JPMorgan American Inv Trust (JAM) 764.00p 3.52%
Darktrace (DARK) 440.60p 3.48%
AJ Bell (AJB) 260.00p 3.42%

FTSE 250 - Fallers

Virgin Money UK (VMUK) 168.50p -5.07%
Polymetal International (POLY) 252.00p -3.41%
Hiscox Limited (DI) (HSX) 925.00p -3.32%
Domino's Pizza Group (DOM) 322.20p -3.13%
Just Group (JUST) 80.90p -1.70%
Lancashire Holdings Limited (LRE) 419.20p -1.13%
Direct Line Insurance Group (DLG) 237.30p -0.92%
IG Group Holdings (IGG) 759.00p -0.85%
QinetiQ Group (QQ.) 353.00p -0.68%
Rathbone Group (RAT) 2,080.00p -0.48%