FTSE nervous ahead of interest rates announcement
The FTSE 100 Index briefly touched 6250 today before drifting into the red ahead of the Bank of England’s decision on interest rates.
The Footsie lost its early gains to sink 24.6 points lower to 6214.4 by mid-morning as BT and pharmaceutical stocks came under pressure.
The gloom in the City was too much for investors despite further gains for energy companies as Scottish Power remained in the takeover spotlight.
Shares in BT fell nearly 3% or 8.25p to 283.5p as concerns over the highly competitive telecoms market overshadowed a strong set of quarterly results at the top end of City expectations.
The firm said broadband revenues grew by 28% to £229m (€341.7m) with BT Retail’s share of new additions standing at 25% in the quarter, down from 30% seen in July as rival firms increased price competition in the market.
It was joined on the Footsie fallers’ board by pharmaceutical giants GlaxoSmithKline and AstraZeneca as investors grew concerned about drug prices in the US Medicare sector after Democrats swept Republicans from power in the mid-term elections.
Glaxo sank 35p to 1369p and AstraZeneca lost 79p to 3083p.
Going in the other direction was Scottish Power amid speculation over a £12bn (€17.9bn) takeover bid from Spain. The stock gained 1% or 7p to 737p today following on from a 9% rise in the previous session after it revealed it had been approached by an unnamed suitor.
Scottish Power was joined by rival firms such as Scottish & Southern Energy, which was up 12p to 1422p, and British Gas owner Centrica, which lifted 2.75p to 341p.
In the second tier, pubs group Punch Taverns added 13p to 1073.5p after revenues jumped 101% to £1.5bn (€2.2bn) in the 12 months to August 19, sending pre-tax profits up 21% to £250m (€373m).
