5th Feb 2026 09:15
(Alliance News) - Stock prices in London opened lower on Thursday morning, as investors await interest rate decisions in the UK and Europe, where both banks are expected to leave rates unchanged.
The FTSE 100 index opened down 43.50 points, 0.4%, at 10,358.84. The FTSE 250 was down 131.29 points, 0.6%, at 23,201.06, and the AIM all-share was down 2.37 points, 0.3%, at 811.98.
The index of London large-caps closed up 0.9% at 10,402.34, a new record close, on Wednesday.
The Cboe UK 100 was down 0.6% at 1,034.05, the Cboe UK 250 was 0.8% lower at 20,573.21, and the Cboe small companies was up slightly at 18,661.24.
In European equities on Thursday, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was down 0.2%.
Sterling was at USD1.3603 on Thursday morning, down from USD1.3656 at the London equities close on Wednesday. The euro was slightly higher at USD1.1802 from USD1.1798. Against the yen, the dollar was higher at JPY157.04 versus JPY156.69.
Interest rate decisions in the UK and Europe will be in focus later today.
The Bank of England is not expected to enact a successive rate cut at midday, with a hold in the offing, and analysts predict that Threadneedle Street will affirm a "gradual" easing path.
In December, the central bank, by a narrow majority of 5-4, voted in favour of a 25 basis point cut, which took bank rate to 3.75%.
RBC noted close votes became a theme at BoE decisions last year, but does not see Thursday's result being as divisive. This time, RBC expects a hold with a 6-3 vote.
RBC sees the next cut happening in April, when the next monetary policy report accompanies the meeting.
Elsewhere, the European Central Bank is widely expected to leave interest rates unchanged, with policymakers set to reaffirm a neutral stance even as downside risks to growth and inflation accumulate, and uncertainty around trade intensifies.
The Frankfurt-based central bank announces its decision on Thursday at 1315 GMT, followed by a press conference with President Christine Lagarde.
Markets are fully pricing a hold that would keep the deposit facility rate at 2.00%, the main refinancing operations rate at 2.15% and the marginal lending facility at 2.40%.
Attention will instead focus on the tone of Lagarde's press conference, the governing council's assessment of risks since December, and how forcefully policymakers push back against market speculation about the next rate move.
In Asia on Thursday, the Nikkei 225 in Tokyo was down 0.9%. In China, the Shanghai Composite was 0.6% lower, while the Hang Seng Index in Hong Kong rose 0.1%. The S&P/ASX 200 in Sydney was 0.4% lower.
In the US on Wednesday, Wall Street ended mixed, with the Dow Jones Industrial Average up 0.5%, the S&P 500 down 0.5% and the Nasdaq Composite 1.5% lower.
The yield on the US 10-year Treasury was quoted at 4.27% on Thursday morning, narrowing slightly from 4.28% at Wednesday's close. The yield on the US 30-year Treasury slimmed to 4.91% from 4.92%.
In London, Vodafone Group shares were down 4.7% as it started a EUR500 million share buyback programme, which will end by May 11.
The Berkshire, England-based telecommunications company said third quarter revenue rose 6.5% to EUR10.5 billion in the three months to the end of December. Service revenue climbed 7.3% to EUR8.5 billion.
Adjusted earnings before interest, tax, depreciation, amortisation and after leases rose 2.3% on an organic basis to EUR2.8 billion, phasing in line with full year guidance. On a year-to-date basis, adjusted Ebitdaal increased by 5.3% on an organic basis to EUR8.5 billion.
Vodafone continues to expect to deliver the upper end of its financial 2026 guidance ranges of adjusted Ebitdaal between EUR11.3 billion and EUR11.6 billion, and adjusted free cash flow between EUR2.4 billion and EUR2.6 billion.
"We maintained good service revenue momentum in the third quarter across both Europe and Africa, supported by top-line growth in Germany, and strong contributions from Turkiye and Africa. After a fast start, we are making very good progress with the integration of our UK business," said Chief Executive Margherita Della Valle.
Shares in Compass Group were 2.9% lower.
The Chertsey, England-based contract caterer reported organic revenue growth of 7.3% in the first quarter, with a 7.3% rise in North America and 7.1% in its International arm.
It reaffirmed its 2026 guidance for 7% organic revenue growth and 2% profit growth from mergers & acqusitions. The firm also confirmed its guidance for ongoing margin progression.
Compass said current foreign exchange rates would improve revenue for by USD630 million and operating profit by USD33 million.
Annualised new business wins totalled USD4 billion, up 10% on-year.
"We have delivered a strong start to the year with broad based growth across every region and sector. The momentum in our [Business & Industry] segment, particularly in North America, reflects the strength of our model and the value we continue to deliver for clients," said Chief Executive Officer Dominic Blakemore.
On the FTSE 250 index, shares in Playtech climbed 6.4% after it said it now expects adjusted earnings before interest, tax, depreciation and amortisation for 2025 of at least EUR195 million, above the analyst consensus of EUR177 million.
The gambling software operator said the consensus range is between EUR150 million and EUR187 million. The firm reported strong trading in the second half of the year, driven by performance in the US and Mexico in the fourth quarter.
"For 2026, the company remains mindful of ongoing sector headwinds including the scheduled increase to gambling taxes in certain markets including the UK," it added.
The company said it remains confident in its outlook for 2026 and its medium-term targets of adjusted Ebitda between EUR250 million and EUR300 million, and between EUR70 million and EUR100 million of free cash flow.
"I'm delighted with the strong performance we saw at the end of 2025. We have been steadily investing across our business in the Americas for a number of years, and I'm particularly pleased with our recent progress in the US, as the benefits of our hard work start to accelerate and flow through to profitability," said Chief Executive Officer Mor Weizer.
On the AIM index, shares in Seeen climbed 13% after it said it has signed a partnership with Bromely FC, running through to the end of 2027, to use its smart video solutions on Bromley's video highlights and interviews.
"Partnering with Bromley FC at such a pivotal moment in their history, as they lead the charge in League Two, is a fantastic opportunity to showcase our AI interactive video platform," said Seeen Chief Executive Officer Adrian Hargrave.
Gold was lower at USD4,897.50 an ounce early on Thursday from USD4,916.04 late Wednesday.
Brent oil was trading higher at USD68.27 a barrel on Thursday morning from USD67.41 on Wednesday.
Still to come on Thursday's economic calendar is the UK construction PMI reading and eurozone retail sales figures, before the interest rate decisions in the UK and Europe.
By Michael Hennessey, Alliance News reporter
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