FTSE down despite BoE rate boost
The London market failed to hold on to its recent winning streak today as traders fretted over heavy losses across the Atlantic.
Despite spending much of the session in positive territory and above the key 4600 mark, the FTSE 100 Index closed 16.1 points lower at 4592.3.
Earlier in the day the Footsie had been buoyed by news that the Bank of England’s Monetary Policy Committee voted unanimously to hold rates at 4.75% this month.
Minutes of the meeting showed committee members voiced concern that UK house prices could move downward and admitted they may have underestimated the potential for a knock-on impact on consumption.
Although the news led some analysts to believe interest rates were reaching their peak, many said a quarter-point rise in November was still on the cards,
The report helped the FTSE soar to a peak of 4630 during the morning.
But New York’s Dow Jones Industrial Average was more than a hundred points in the red by closing time in London, causing the Footsie shift into reverse gear.
On the corporate front in London, shares in oil group Shell were third in the Footsie fallers, down 14.5p at 418p, after investors gave a cool reception to its plans to invest $45bn (€36.7bn) and make major disposals after its reserves crisis earlier this year.
Rival BP fell 4p to 534p despite a rise above $47 in the cost of a barrel of US light crude.
Vodafone was trying to keep the market in positive territory after announcing plans to launch third generation mobile phones before Christmas.
The Newbury-based mobile phone group rang up a 0.75p gain to 131p after saying it would start selling 10 handset models in November.
Aerospace and defence group Smiths was also among the risers with an 5.5p gain to 730p after saying trading conditions appeared more positive than for some years, despite flat final profits.
Group 4 Securicor was high up in the FTSE 250, lifting nearly 3% or 3p to 118p, after revealing it was on course to make the £30m (€43.9m) of annual cost savings it promised at its merger.
Unbranded pubs owner Pubs’n’Bars rose half a penny to 45p after posting a 2% rise in profits.
But housebuilder Barratt Developments lost 10.5p to 590.5p after saying it expected house selling prices to rise “much less rapidly” in the coming year.
Property developer Henry Boot also lost ground despite reporting strong underlying growth. Shares dipped nearly 4% or 15p to 405p.
Meanwhile, milk group Dairy Crest remained constant at 325p after saying it had paid £4 million for full control of the company that makes Country Life butter.
The biggest risers in the Footsie today were Compass, up 7.75p to 232.5p, Wolseley adding 22.5p to 919p, Antofagasta up 24p to 1085p and Capita Group adding 4.5p to 328p.
The heaviest losers were Man Group, down 66p to 1261p, Reuters off 11.5p to 330p, Shell down 14.5p to 418p and Amvescap off 8.25p to 309.75p.
