- All eyes on Fed
- Unanimous vote by BoE MPC
- Investors poised for "imminent" takeover bid
techMARK 2,804.94 +0.37%
FTSE 100 6,778.56 +0.17%
FTSE 250 15,624.20 +0.25%
The FTSE ended today's session higher ahead of the latest statement release by the Federal Reserve and following the publication of the minutes of the latest meeting of the Bank of England's (BoE) Monetary Policy Committee (MPC).
With ex-dividend stocks slightly offsetting further gains by both oil stocks and potential bid target Shire, the top tier index closed up 11.79 points at 6,778.56.
The BoE unveiled the minutes of its most recent MPC meeting, at which members voted unanimously to maintain interest rates at 0.5% after agreeing that "it would be necessary to see more evidence of slack being absorbed before an increase in Bank Rate would be warranted".
However, a speech given by rate-setter Martin Weale revealed his belief there is evidence to indicate a need for a tighter policy profile than that given in its May forecast.
Weale, who is an external member of the MPC, said that the potential for unemployment to fall more quickly than the committee currently anticipates was even by itself suggestive that policy should be tightened.
"Investors are braced for a potentially hawkish statement from the Federal Reserve today, having had the Bank of England minutes this morning as a warm-up act," said Alastair McCaig, Market Analyst at IG.
"The gains made today on the FTSE have been founded on energy firms, which at the moment are benefiting from higher oil prices. Despite this, traders are keeping one eye on the Iraq situation at all times, with the uncomfortable knowledge that higher oil prices
will not be beneficial for the global economy."
The Fed is expected to announce a further tapering of quantitative easing when it wraps up its policy meeting later this evening.
Analysts predict the central bank will cut another $10bn off its monthly bond purchase programme to take the total to $35bn.
However, following Tuesday's release of the latest US inflation data, which showed prices rose more than forecast, some analysts now believe the Fed may consider raising interest rates sooner than it had been expecting.
"Yesterday's US CPI numbers has invited some concern that, even here, tightening might come sooner rather than later, which would be more plausible given that CPI inflation is over 2%, and unemployment is continuing to fall," according to Michael Hewson at CMC Markets.
US asked to launch air strikes by Iraq
The BBC was this afternoon reporting that Iraq has requested air strikes from the US. It quoted the US military commander General Martin Dempsey as saying: "We have a request from the Iraqi government for air power".
The request follows an attack by jihadist militants on Iraq's largest oil refinery, located north of Baghdad.
Shire investors anticipating takeover bid "imminently"
have spiked higher on rumours that Allergan could bid for the company in an effort to fend off a hostile takeover attempt by Valeant Pharmaceuticals. Bloomberg cited an analyst at SunTrust Robinson Humphrey who said that a bid is "imminent" and "makes strategic sense" for the US company.
Oil stocks Royal Dutch Shell, BP and BG Group were all making gains as crude prices continued to climb.
Meanwhile, heavyweight utilities groups Severn Trent and United Utilities were both trading lower this morning after going ex-dividend.
WPP was also in the red after Chief Executive Martin Sorrell reported that trading in May was not as strong as April, although it was satisfactory, and he said second quarter trading could surpass its robust set of results in the previous three months.
FTSE 100 - Risers
Shire Plc (SHP) 3,785.00p +3.42%
Associated British Foods (ABF) 3,050.00p +2.01%
Royal Dutch Shell 'B' (RDSB) 2,533.00p +1.77%
BP (BP.) 514.40p +1.64%
Royal Dutch Shell 'A' (RDSA) 2,407.50p +1.52%
Vodafone Group (VOD) 198.10p +1.46%
Mondi (MNDI) 1,070.00p +1.23%
BHP Billiton (BLT) 1,874.50p +1.19%
Anglo American (AAL) 1,437.50p +1.09%
Rio Tinto (RIO) 3,079.50p +1.00%
FTSE 100 - Fallers
United Utilities Group (UU.) 861.50p -2.77%
IMI (IMI) 1,526.00p -2.43%
Severn Trent (SVT) 1,928.00p -2.08%
WPP (WPP) 1,262.00p -2.02%
Aberdeen Asset Management (ADN) 434.60p -1.70%
Smith & Nephew (SN.) 1,053.00p -1.68%
Diageo (DGE) 1,858.00p -1.61%
Babcock International Group (BAB) 1,171.00p -1.60%
Sainsbury (J) (SBRY) 317.10p -1.49%
William Hill (WMH) 336.10p -1.44%
FTSE 250 - Risers
Rank Group (RNK) 168.00p +5.59%
Fisher (James) & Sons (FSJ) 1,340.00p +4.69%
RPS Group (RPS) 276.70p +4.42%
NMC Health (NMC) 465.00p +4.35%
Keller Group (KLR) 961.00p +4.34%
Euromoney Institutional Investor (ERM) 1,147.00p +4.27%
Barr (A.G.) (BAG) 631.00p +3.44%
Foxtons Group (FOXT) 287.50p +3.42%
IP Group (IPO) 183.00p +3.33%
Ferrexpo (FXPO) 130.50p +3.16%
FTSE 250 - Fallers
Xaar (XAR) 500.00p -6.89%
3i Group (III) 394.20p -4.25%
African Barrick Gold (ABG) 214.10p -4.21%
Telecom Plus (TEP) 1,384.00p -3.62%
Restaurant Group (RTN) 555.00p -3.23%
Brown (N.) Group (BWNG) 423.50p -2.69%
Ted Baker (TED) 1,746.00p -2.35%
Grafton Group Units (GFTU) 538.00p -2.27%
Paragon Group Of Companies (PAG) 351.50p -2.12%
Redrow (RDW) 249.80p -2.04%