London open: Stocks rise ahead of BoE rate announcement

London stocks rose in early trade on Thursday after the US Federal Reserve stood pat on interest rates, with the Bank of England widely expected to do the same at midday.

At 0820 GMT, the FTSE 100 was up 0.7% at 7,395.27.

Overnight, the Fed left interest rates unchanged for the second straight meeting, as expected, with chair Jerome Powell saying that policymakers would be patient before making any further moves.

The Federal Open Market Committee concluded its two-day meeting in Washington by leaving the federal funds rate at a range between 5.25% and 5.5%.

"Tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks," the FOMC said in a statement.

In a press conference, Powell said the FOMC would continue to "proceed carefully" and assess economic data as it comes through.

However, he indicated that they would wait for rate hikes and tighter financial conditions - given the recent run-up in bond yields to a 16-year high - to feed through to the economy.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "There has been a wave of relief that the Fed didn’t rock the boat and stuck to the expected course by keeping interest rates on hold. This has reassured investors lifting stocks on Wall Street, buoying trading in Asia and filtering through to expectations of an upbeat early session for the FTSE 100, pending the Bank of England decision."

She said expectations are high that the BoE will also keep rates on hold too, "particularly given the more fragile state of growth".

"Interest rates are at a 15-year high, and policymakers are expected to stay in their ‘wait and see’ stance, as demand already appears to be seeping out of the economy. A jump in company insolvency rates and a housing market in the deep freeze are signals that the sharp hike in rates is already being keenly felt, and that’s even before the full effects come through," she said.

In equity markets, Sainsbury’s rallied as the supermarket chain boosted its full-year outlook after strong grocery sales throughout the first half.

Smith & Nephew also racked up strong gains as it said that sales growth is now expected to be at the top end of guidance after a strong third quarter, though it warned that margins would likely not grow as much as hoped.

BT advanced as it reaffirmed its full-year guidance, reporting flat revenue and a 6% increase in half-year adjusted EBITDA.

Oil giant Shell gained as it posted third-quarter adjusted earnings of $6.2bn and announced a $3.5bn share buyback over the next three months. Earnings were up from $5.1bn in the previous three months, but down from $9.5bn in the same period a year earlier, and only slightly behind expectations of $6.48bn.

Shell said the results reflected a "robust" operational performance, and higher oil prices and refining margins.

Trainline surged as the rail and coach booking platform said it saw double-digit growth across the board in its first half, and narrowed its full-year guidance towards the upper end of the forecast range.

Ladbrokes owner Entain slumped as it said in a statement that during October, customer-friendly results had seen sports margins impact EBITDA by around £45m.

Kitchen supplier Howden Joinery lost ground as it cautioned that full-year results were set to be towards the lower end of market expectations, pointing to a "more uncertain macroeconomic outlook".

Ashmore and Hilton Food Group were weaker as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 7,395.27 0.72%
FTSE 250 (MCX) 17,342.65 0.91%
techMARK (TASX) 4,043.27 0.25%

FTSE 100 - Risers

Sainsbury (J) (SBRY) 275.50p 5.23%
Smith & Nephew (SN.) 958.20p 3.77%
CRH (CDI) (CRH) 4,678.00p 3.15%
Tesco (TSCO) 278.70p 2.84%
BT Group (BT.A) 114.10p 2.70%
International Consolidated Airlines Group SA (CDI) (IAG) 148.50p 2.59%
Ocado Group (OCDO) 486.90p 2.31%
SEGRO (SGRO) 725.60p 2.28%
Marks & Spencer Group (MKS) 229.10p 2.28%
Rio Tinto (RIO) 5,362.00p 1.90%

FTSE 100 - Fallers

Entain (ENT) 885.60p -5.79%
Haleon (HLN) 324.15p -2.10%
Flutter Entertainment (CDI) (FLTR) 13,065.00p -1.14%
Hikma Pharmaceuticals (HIK) 1,901.00p -0.99%
GSK (GSK) 1,413.60p -0.66%
Pershing Square Holdings Ltd NPV (PSH) 2,946.00p -0.61%
Dechra Pharmaceuticals (DPH) 3,792.00p -0.21%
Halma (HLMA) 1,845.00p -0.03%
IMI (IMI) 1,446.00p 0.07%
AstraZeneca (AZN) 10,350.00p 0.14%

FTSE 250 - Risers

OSB Group (OSB) 306.00p 6.10%
Trainline (TRN) 277.00p 5.40%
Edinburgh Worldwide Inv Trust (EWI) 130.20p 3.83%
Rathbones Group (RAT) 1,556.00p 2.77%
Babcock International Group (BAB) 405.20p 2.74%
BlackRock World Mining Trust (BRWM) 546.00p 2.63%
TUI AG Reg Shs (DI) (TUI) 423.80p 2.57%
Shaftesbury Capital (SHC) 108.00p 2.56%
Grafton Group Ut (CDI) (GFTU) 793.00p 2.55%
Supermarket Income Reit (SUPR) 74.80p 2.47%

FTSE 250 - Fallers

Ashmore Group (ASHM) 160.70p -5.41%
Howden Joinery Group (HWDN) 618.40p -3.92%
Centamin (DI) (CEY) 81.00p -2.59%
Hilton Food Group (HFG) 654.00p -1.95%
Redrow (RDW) 480.00p -1.84%
Bankers Inv Trust (BNKR) 93.40p -1.27%
Aston Martin Lagonda Global Holdings (AML) 197.20p -1.05%
Wood Group (John) (WG.) 142.80p -0.97%
Playtech (PTEC) 398.60p -0.50%
Bytes Technology Group (BYIT) 501.00p -0.40%