21st Jun 2018 12:15
LONDON (Alliance News) - Despite opening in the green, London equities had slipped into the red by midday on Thursday, while the pound jumped in the wake of the latest interest rate decision from the Bank of England.The FTSE 100 index was down 0.3%, or 23.59 points, at 7,603.81 Thursday midday. The mid-cap FTSE 250 index was down 0.4%, or 73.07 points, at 20,853.31. The AIM All-Share index was up 0.1% at 1,096.96 .The Cboe UK 100 was down 0.5% at 12,888.04, the Cboe UK 250 was down 0.4% at 19,095.75, and the Cboe UK Small Companies was down 0.2% at 12,866.83.The pound shot up to USD1.3200 after the BoE voted 6-3 in favour of keeping interest rates unchanged, having traded around the USD1.31 mark prior to the release of the minutes."The Bank of England have kept the official rate at 0.5% as was widely expected but an additional dissenter has caused the pound to spike higher. Chief economist Andy Haldane joined the 2 other hawks in calling for a rate hike," said XTB chief market analyst David Cheetham."As well as the change in voting pattern, a key line from the accompanying statement which read that all members are more confident that the Q1 slowdown is temporary," Cheetham added.There will not be a press conference with BoE Governor Mark Carney immediately after the decision, but he will give a speech at the Lord Mayor's bankers and merchants dinner at Mansion House in the evening at 2115 BST.In other UK news on Thursday, the Office for National Statistics showed the government budget deficit reached its lowest May level since 2005.Public sector net borrowing, excluding public sector banks, decreased by GBP2.0 billion from last year to GBP5.0 billion in May. This was the lowest May net borrowing since 2005 and below the expected level of GBP6.3 billion.In mainland Europe, the CAC 40 in Paris was up 0.3% while the DAX 30 in Frankfurt was flat Thursday midday."Early gains across European markets are rapidly slipping away this morning, indicating that markets are still not entirely convinced that trade wars have disappeared below the horizon," said IG chief market analyst Chris Beauchamp.Germany's DAX was dragged down after car maker Daimler issued a profit warning, saying Chinese retaliatory import duties on vehicles built in the US would hit sales and profit of SUVs it builds at its Alabama factory."From today's perspective, the decisive factor is that, at Mercedes-Benz Cars, fewer than expected SUV sales and higher than expected costs - not completely passed on to the customers - must be assumed because of increased import tariffs for US vehicles into the Chinese market. This effect cannot be fully compensated by the reallocation of vehicles to other markets," Daimler said.Daimler was down 4.1% in Frankfurt on Thursday, with peers Volkswagen down 2.2% and BMW 3.2% lower.Stocks in New York are seen opening lower on Thursday, with the Dow Jones called down 0.4%, the S&P down 0.3% and the Nasdaq off 0.2%. US initial and continuing jobless claims are due at 1330 BST and the housing price index at 1400 BST.In London, United Utilities was the biggest loser in the FTSE 100 as it fell 5.0% after going ex-dividend, meaning new buyers no longer qualify for the latest payout from the utility firm. Land Securities, also ex-dividend, was down 1.7%.Berkeley Group was down 2.4%, extending Wednesday's losses when it had said the housing market in the London and South East region has remained subdued. Meanwhile, at the top of the FTSE 100 on Thursday was drugmaker Shire, gaining 2.3%. Shire has secured approval from the US Food & Drug Administration to expand the offering of Cinryze to children aged six years and older with hereditary angioedema, a rare disorder characterized by recurrent episodes of severe swelling.Blue-chip pay-TV provider Sky was up 1.3% at midday. Walt Disney on Wednesday raised its offer to purchase Twenty-First Century Fox to USD71.3 billion, trumping rival Comcast's USD65 billion offer. Disney's initial offer was stock-based, but Wednesday's bid mixes cash and stock. Disney is close to winning US antitrust approval for the deal, creating a potentially insurmountable hurdle for raised bid by Comcast, Bloomberg reported citing a person familiar with the matter.Under its raised offer, Disney has agreed to acquire for USD38 per Fox share the same businesses it had agreed to acquire under the previously announced merger agreement, including Fox's stake in the UK's Sky.In the FTSE 250, Dixons Carphone was up 3.2% despite reporting a 24% drop in headline profit to GBP382 million from GBP500 million last year. Reported pretax profit fell to GBP289 million from GBP404 million, though revenue for the year increased by 3% to GBP10.53 billion.The profit fall had been signposted at a May profit warning, which saw the shares tumble 20% in one day alone.CYBG was 2.9% higher after JPMorgan raised the challenger bank to Neutral from Underweight. Virgin Money was up 2.0%, despite being downgraded to Neutral from Overweight by the broker, having accepted to an all-share takeover from CYBG.Elsewhere on the Main Market, Dunedin Smaller Companies Investment Trust was up 8.4% after agreeing "in principle" a merger with Standard Life UK Smaller Companies Trust.The move comes after Dunedin carried out a strategic review, saying the company's size and market liquidity made it hard to bring in new investors. The combined firm will have assets of over GBP550 million, and Dunedin said this will create a much larger investment trust with a stronger rating and better market liquidity.Dunedin Smaller Cos will be voluntarily liquidated and its assets merged into Standard Life UK Smaller, with new shares in the latter going to Dunedin shareholders.Standard Life UK Smaller Companies was up 0.6% at midday.Related Shares:
SkySLS.LDunedin Smaller Cos. Investment Trust PLCVirgin Money HoldingsDC..LLand SecuritiesShireUnited UtilitiesCYBG