Global stocks rise ahead of US and UK interest rate decision
London’s FTSE 100 was lifted with solid gains for retail giants including Next, Marks & Spencer and AB Foods.
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Your support makes all the difference.Global stocks were given a boost on Wednesday amid hopes that central banks in the US and UK could be about to hold interest rates steady for another month running.
London’s FTSE 100 was lifted with solid gains for retail giants including Next, Marks & Spencer and AB Foods.
The blue-chip index moved 20.71 points higher, or 0.28%, to close at 7,342.43.
Economists are expecting the US Federal Reserve to keep interest rates the same as policymakers continue to weigh up whether tighter monetary policy is slowing the pace of inflation.
The Bank of England will announce its decision on rates on Thursday, with rates also widely predicted to stay the same amid growing concerns that the UK could be headed for a recession.
The Bank’s outlook for economic growth will be watched closely as well an updated forecast for when inflation will return to target, and when it is likely to begin cutting rates.
It’s been a solid start to the month for European markets with gains across the board as weaker economic data, and a slide in yields raises the prospect that central banks may well be done when it comes to further rate hikes
Investor sentiment was strong in other European markets with Germany’s Dax up 0.76% and France’s Cac 40 closing 0.68% higher.
Over in the US, the S&P 500 was up 0.3% and Dow Jones was flat by the time European markets closed.
Meanwhile, bond yields – interest on government debt – have risen sharply with 30-year UK bond yields surpassing 5% during the day before sliding back down to around 4.7%.
Michael Hewson, chief market analyst for CMC Markets UK, said: “It’s been a solid start to the month for European markets with gains across the board as weaker economic data, and a slide in yields raises the prospect that central banks may well be done when it comes to further rate hikes.
“Nonetheless after such a poor October performance for stock markets more broadly, what we may be seeing here is nothing more than a relief rally, although it’s no less welcome for that.”
The pound was down by about 0.3% against the US dollar to 1.212, and up by 0.1% against the euro to 1.15.
The price of Brent crude oil jumped by 0.88% to 85.77 US dollars per barrel.
In company news, shares in Next rose after the fashion giant hiked its full-year profit forecast for the fourth time this year as it expects stronger sales.
The retailer was feeling optimistic even though it said unusually warm weather had affected demand for autumn ranges.
Sales volatility is a result of changing weather conditions rather than any underlying consumer problems, it said. Shares in Next closed 3.6% higher.
Elsewhere, Asos shares took a hit after the online fashion seller said its revenues fell by 10% over the latest financial year and pre-tax losses widened to nearly £300 million.
The firm said it is closing its warehouse in Lichfield, Staffordshire, after significantly reducing stock levels and planning to make more cost savings in the future. Its share price was down 7.7% at close.
The biggest risers on the FTSE 100 were Next, up 248p to 7,132p, Airtel Africa, up 3.9p to 117.2p, Marks & Spencer, up 7.2p to 224p, Melrose Industries, up 15.5p to 482.5p, and Centrica, up 5p to 162.3p.
The biggest fallers on the FTSE 100 were Standard Chartered, down 18.4p to 611.6p, Antofagasta, down 32p to 1,313p, GSK, down 34.4p to 1,423p, Endeavour Mining, down 36p to 1,664p, and Fresnillo, down 9.8p to 544p.