- BoE and ECB keep policy on hold
- Draghi says ECB discussed rate cut
- Eyes turn to US employment report
London's blue-chip index finished with slight gains on Thursday after central banks in the UK and Europe announced that they had kept policy on hold, with the market's focus now turning to the key employment report in the US due out tomorrow.
As expected, the Bank of England's Monetary Policy Committee voted to maintain the Bank Rate at 0.5% at today's meeting and left its asset purchase programme unchanged at £375bn, the Bank announced at noon. Meanwhile, the European Central Bank (ECB) held the main refinancing rate at 0.75%, the deposit rate at zero and the marginal lending rate at 1.5%, as anticipated.
The market reaction to the central banks' decisions was pretty subdued but the focus was on the subsequent press conference with ECB President Mario Draghi in which he hinted that the ECB did in fact discuss the possibility of a rate cut at this month's meeting.
"He turned slightly dovish on the rate front, with expectations now building for a cut early next year," said ETX Capital's head of trading Joe Rundle.
Looking ahead to tomorrow's session, all eyes will be on the US employment report with the consensus predicting a 90,000 gain in non-farm payrolls in November, much worse than the 171,000 increase seen in October. The unemployment rate is expected to remain at 7.9%.
However ETX's Rundle said that it is "difficult to put firm guesstimate on the outcome given the mixed data signals out of the US this week [weaker ADP, better non-mfg ISM, poor ISM mfg] - but the reaction should be seen as a litmus test for upside momentum heading into the year-end.
"If markets shrug off a weaker reading and continue their positive bias, a Santa rally may return," he said.
FTSE 100: Rolls-Royce drops on corruption investigation
Power systems giant Rolls-Royce tanked after saying that it is to report to the Serious Fraud Office (SFO) after matters of bribery and corruption involving so-called "intermediaries" were discovered in Indonesia and China.
Defence group BAE Systems performed well today. US peer Lockheed Martin is close to winning Pentagon backing to build all 29 F-35 fighters planned for the coming fiscal year after three years of cutbacks in orders for the nation's costliest weapon, officials told Bloomberg. The British firm is one of the leading contractors in the consortium responsible for the manufacture of the Royal Navy's next generation carrier based interceptor.
Accountancy software group Sage was a heavy faller after yesterday's full-year results with Natixis downgrading the stock to 'neutral' this morning. UBS also cut its price target for the shares.
Meanwhile, mining stocks were doing a good job of propping up the Footsie as metal prices rose. Antofagasta, ENRC, Vedanta, Anglo American, Xstrata, and Glencore were all making strong gains.
Sector peer BHP Billiton advanced on rumours that it could be ready to make a $55-a-share cash offer for Alabama-based 'pure play' metallurgical coal producer Walter Energy. However, when contacted BHP remained tight-lipped, a spokesperson said: "It is market speculation and not something we care to comment on."
Shares in Wolseley were heading back down after getting a boost from a number of broker upgrades on Wednesday.
FTSE 250: Imagination Technologies in the top spot
Imagination Technologies Group rose into the top spot, rising over 6%, on the same day that JPMorgan Chase reiterated its 'overweight' rating on the chip designer.
Electronics components supplier Premier Farnell was also a high riser despite saying profit in the third quarter fell amid challenging market conditions.
Electrical retailer Dixons was given a lift by Barclays, which upgraded the stock to 'overweight', saying that it would be boosted by the decline of Comet. The broker more than doubled its target price for the shares
from 16p to 33p.
FTSE 100 - Risers
Antofagasta (ANTO) 1,337.00p +3.16%
Eurasian Natural Resources Corp. (ENRC) 283.30p +2.20%
Vedanta Resources (VED) 1,118.00p +2.19%
Johnson Matthey (JMAT) 2,411.00p +2.03%
Xstrata (XTA) 1,041.50p +1.91%
Anglo American (AAL) 1,812.00p +1.80%
Rexam (REX) 448.40p +1.77%
Next (NXT) 3,712.00p +1.75%
Barclays (BARC) 250.50p +1.66%
Aberdeen Asset Management (ADN) 339.50p +1.56%
FTSE 100 - Fallers
Weir Group (WEIR) 1,817.00p -3.40%
Rolls-Royce Holdings (RR.) 885.00p -3.12%
Pennon Group (PNN) 601.00p -2.91%
Meggitt (MGGT) 384.00p -2.27%
Sage Group (SGE) 294.00p -2.13%
Capita (CPI) 757.00p -2.07%
Hargreaves Lansdown (HL.) 728.50p -2.02%
Imperial Tobacco Group (IMT) 2,485.00p -1.70%
Wolseley (WOS) 2,843.00p -1.66%
Severn Trent (SVT) 1,551.00p -1.34%
FTSE 250 - Risers
Imagination Technologies Group (IMG) 426.50p +6.36%
Electrocomponents (ECM) 213.10p +4.31%
Dixons Retail (DXNS) 27.55p +4.24%
Halfords Group (HFD) 335.80p +3.90%
Ruspetro (RPO) 83.00p +3.75%
Elementis (ELM) 232.60p +3.70%
Renishaw (RSW) 1,882.00p +3.35%
Kenmare Resources (KMR) 31.82p +3.31%
Home Retail Group (HOME) 125.00p +3.31%
Premier Farnell (PFL) 182.70p +3.16%
FTSE 250 - Fallers
Oxford Instruments (OXIG) 1,336.00p -4.64%
JD Sports Fashion (JD.) 721.50p -3.80%
Lancashire Holdings (LRE) 783.50p -3.57%
Centamin (DI) (CEY) 50.20p -3.00%
Bwin.party Digital Entertainment (BPTY) 105.40p -2.41%
Carillion (CLLN) 290.00p -2.32%
Hiscox Ltd. (HSX) 472.00p -2.20%
Supergroup (SGP) 601.50p -2.12%
Talvivaara Mining Company (TALV) 93.10p -2.10%
New World Resources A Shares (NWR) 270.00p -1.82%