LONDON MARKETS: FTSE 100 On Track For A Loss, Pound Drops As BOE Flags Growth Concerns
06 November 2015 - 2:41AM
Dow Jones News
By Carla Mozee and Victor Reklaitis, MarketWatch
Pound drops after 'Super Thursday' data releases
U.K. stocks fell Thursday as the pound dropped, after the Bank
of England gave a downcast outlook for the British economy, saying
weakness in emerging markets will drag on growth and inflation
prospects.
The FTSE 100 was down 0.4% to 6,389.50. Meanwhile, the pound was
shoved 0.9% lower.
A loss on Thursday would break a three-day run of wins for the
FTSE 100. But the blue-chip index has pared losses after the BOE
news, which signaled the central bank could be less aggressive
about raising interest rates than expected. The London benchmark
even briefly traded in positive territory.
"Today's Bank of England interest rate announcement was more
dovish than markets were expecting," said Jamie Brownlee, director
at Citigate Dew Rogerson, in emailed comments. He added that "a
signal has been provided that the market's expectations for future
rate rises are too far away."
The BOE's signals were viewed as surprising investors
(http://www.marketwatch.com/story/bank-of-england-pushes-out-timing-of-rate-rise-2015-11-05),
many of whom were expecting the central bank to indicate that it
believed markets had gone too far in pushing back expectations of
when rates are likely to rise in Britain.
Lukman Otunuga, research analyst at FXTM, said in a note that
"expectations of the BoE acting have heavily diminished and the
effects of this Super Thursday surprise will continue to drag this
month."
Individual movers: Randgold Resources Ltd. (RRS.LN) shares were
down 3.7% as the gold producer's third-quarter profit fell
(http://www.marketwatch.com/story/randgold-profit-falls-despite-record-gold-output-2015-11-05).
Record gold output failed to offset the negative effect of lower
gold prices and higher cash costs.
Commodities producer and trader Glencore PLC (GLEN.LN) lost 2%.
It gave up early gains that came following a ratings upgrade to buy
from hold at Deutsche Bank. The shares on Wednesday rose 5.4% as
Glencore said it expected to cut more debt
(http://www.marketwatch.com/story/glencore-cuts-debt-target-says-trading-is-on-track-2015-11-04)
than previously expected.
Wm. Morrison Supermarkets PLC (MRW.LN) shed 4.9% after the
retailer posted a 2.6% decline third-quarter sales
(http://www.marketwatch.com/story/wm-morrison-sales-fall-26-amid-price-cuts-2015-11-05).
'Super Thursday': Investors received three major updates from
the BOE: its latest rate decision for the U.K., minutes from the
policy-setting meeting and the Quarterly Inflation Report.
The central bank, as expected, kept its key interest rate at a
record low of 0.5%.
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(END) Dow Jones Newswires
November 05, 2015 10:26 ET (15:26 GMT)
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