- BoE and ECB hold rates
- US data beats estimates
- Next leads risers after broker comments
The Footsie swung between gains and losses for most of Thursday's session but finished the day broadly flat following a busy day on the global economic calendar, which saw policy decisions in the UK and Europe, a news conference with Mario Draghi and some better-than-expected economic figures from the US.
At midday, the Bank of England's Monetary Policy Committee (MPC) maintained the Bank Rate at 0.5% and the asset purchase programme at £375bn. The decision was more or less as expected, though many analysts are expecting the Bank to embark on further easing and possibly a rate cut in November.
The European Central Bank (ECB) also remained in 'wait-and-see' mode this afternoon, leaving its key interest rate at 0.75% after it was cut by 25 basis points earlier in the year. In the following press meeting with ECB President Draghi, he said the "euro is irreversible" and explained that last month's decision to announce a bond-buying programme will act as an effective backstop for the Eurozone.
Analyst Craig Erlam from Alpari said this afternoon: "It's very difficult to argue with this point, all you have to do is look at the borrowing costs of the peripheral countries to see that investors are much more comfortable with the situation in the Eurozone than they were a few months ago."
Stateside, initial weekly jobless claims increased to 367,000 last week, more than the 363,000 recorded the week before but under the 370,000 expected by the consensus. Factory orders fell by 5.2% in August, the second fall in three months, according to the Commerce Department. This was better than the 5.9% decline forecasted.
In Eurozone news, Spain's Treasury sold €3.99bn in two-, three- and five-year debt, the top end of its targeted range. While bid-to-cover ratios improved across all maturities, the yields on offer fell. Meanwhile, the Troika has said it expects the Greek economy to contract by 5% in 2013, notably worse than the 3.8% fall in gross domestic product (GDP) expected by Greece's own government.
FTSE 100: Retailers mixed; Tesco continues to fall
Supermarket groups Tesco and Sainsbury were stuck in the red today after announcing interim results and a trading update (respectively) yesterday. Both Exane BNP Paribas and Credit Suisse reduced their target prices for Tesco's shares
Retailing peers Next, Kingfisher and Marks & Spencer were heading the other day, with Next topping the risers list on the Footsie after an upbeat broker note from Nomura. The broker said that cotton prices should start to benefit clothing retailers: "We believe retailers will start to benefit from lower input costs over the next few quarters, from a lagged benefit from the fall in cotton prices, and also increasing productivity levels in Chinese factories."
BHP Billiton is among the companies talking to Petrobras about buying a stake in its Gulf of Mexico oilfields. The miner was trading in the red today after analysts at Morgan Stanley lowered their price target for the shares from 2,180p to 2,100p.
Pharmaceuticals behemoth GlaxoSmithKline gained after saying its joint venture company, Shionogi-ViiV Healthcare, has completed an initial clinical registration package for dolutegravir, its treatment for HIV patients.
Sweeteners and food products group Tate & Lyle was the high riser after Credit Suisse raised its rating for the stock from 'neutral' to 'outperform'. The broker said: "There is no easy way to value Tate & Lyle, but it does seem to us to be a better business for all the changes we have seen and that this is not reflected in the share price (which is down 8% year to date versus a staples sector up 18%)."
FTSE 250: Halfords accelerates after impressive Q2
Car and bike parts retailer Halfords jumped after appointing a new Chief Executive Officer following the abrupt departure of David Wild in the summer, as it revealed that full-year profits would be at the top end of guidance after a strong second quarter.
The company expects pre-tax profit to be in the region of £40-42m in the first half on the back of its second quarter performance and an acceleration of operating cost investment. The consensus estimate prior to the announcement stood at £35.8m. Both Panmure Gordon and Seymour Pierce raised their target prices for the shares today.
Transport company FirstGroup was firmer following the 20.7% drop the day before after the Department for Transport cancelled the decision to award the group the West Coast rail franchise. UBS this morning has upgraded the stock from 'sell' to 'neutral' after yesterday's big fall, but said that there are still "major challenges ahead". Morgan Stanley also raised its rating to 'equal weight', while HSBC downgraded to 'underweight'.
FTSE 100 - Risers
Next (NXT) 3,592.00p +2.66%
Weir Group (WEIR) 1,800.00p +2.16%
Tate & Lyle (TATE) 687.00p +1.85%
InterContinental Hotels Group (IHG) 1,669.00p +1.83%
Pearson (PSON) 1,252.00p +1.79%
Tullow Oil (TLW) 1,420.00p +1.72%
Aggreko (AGK) 2,347.00p +1.65%
Carnival (CCL) 2,350.00p +1.60%
Kingfisher (KGF) 268.70p +1.59%
Smiths Group (SMIN) 1,055.00p +1.54%
FTSE 100 - Fallers
Tesco (TSCO) 318.15p -2.99%
Xstrata (XTA) 948.30p -2.08%
Johnson Matthey (JMAT) 2,369.00p -1.99%
Lloyds Banking Group (LLOY) 38.02p -1.98%
BHP Billiton (BLT) 1,912.50p -1.57%
Morrison (Wm) Supermarkets (MRW) 280.40p -1.54%
G4S (GFS) 264.30p -1.38%
Croda International (CRDA) 2,380.00p -1.20%
CRH (CRH) 1,175.00p -1.18%
Royal Dutch Shell 'B' (RDSB) 2,200.00p -1.10%
FTSE 250 - Risers
Halfords Group (HFD) 303.50p +14.10%
Sports Direct International (SPD) 382.80p +6.33%
Bwin.party Digital Entertainment (BPTY) 116.10p +6.22%
Rentokil Initial (RTO) 87.25p +5.12%
New World Resources A Shares (NWR) 276.00p +3.72%
FirstGroup (FGP) 200.60p +3.72%
Victrex (VCT) 1,380.00p +3.68%
Imagination Technologies Group (IMG) 496.20p +3.59%
Workspace Group (WKP) 281.90p +3.37%
PayPoint (PAY) 765.00p +3.24%
FTSE 250 - Fallers
Petra Diamonds Ltd.(DI) (PDL) 113.40p -2.49%
Heritage Oil (HOIL) 186.90p -2.10%
IP Group (IPO) 118.50p -1.66%
NMC Health (NMC) 191.50p -1.64%
Afren (AFR) 139.50p -1.62%
Bovis Homes Group (BVS) 493.90p -1.32%
Euromoney Institutional Investor (ERM) 774.50p -1.27%
Kenmare Resources (KMR) 39.70p -1.12%
Essar Energy (ESSR) 118.00p -1.09%
Tullett Prebon (TLPR) 293.90p -1.08%