London slightly up
London shares achieved slim gains today after economic news fuelled talk that interest rates would stay on hold for the rest of this year.
The FTSE 100 Index lost some of its earlier 14-point gain, but steadied to stand 7.3 points ahead at 4777.7 by mid-morning.
Minutes from the November meeting of the Bank of England’s Monetary Policy Committee (MPC) showed all nine members voted to keep rates at 4.75% – adding to speculation that rates will not rise for some time yet and may even have peaked.
Traders also drew comfort from news that UK unemployment dropped to another record low between July and September.
Higher employment bolstered short term prospects for consumer spending, but low wage growth supported a dovish view on rates, an analyst said.
On the corporate front, investors turned their backs on blue-chip retailers after a sales slowdown at electricals firm Dixons.
Dixons lost 5% of its value, or 9.25p to 157.5p, after warning that consumers were increasingly cautious about splashing out on “big-ticket” items, dragging a host of high street rivals into the red.
Retailers featured strongly on the losers board with Marks & Spencer down 7.5p to 344.5p, B&Q owner Kingfisher down 2p at 301p and Argos-to-Homebase group GUS weakening 14p at 878.5p.
However, mobile phone groups were driving the market forward after mmO2 said it would reward investors with a maiden dividend at the full-year stage.
Shares in mmO2 surged more than 5% or 5.5p to 111.5p on the back of this news and better-than-expected revenues and underlying earnings, while heavyweight rival Vodafone lifted 1p to 143p.
Outside the top flight, temporary power specialist Aggreko advanced 3.75p to 160.5p after raising its guidance for full-year profits. The group reported a pick-up in demand over the summer following four major hurricanes in the United States.
