FTSE 100 Gains After Fed's Dovish Rate-Cut Signal
December 14 2023 - 12:48PM
Dow Jones News
The FTSE 100 rose 1.3% to 7,648.98 points on the back of the
U.S. Federal Reserve's pivot toward rate cuts last night, and
despite of push-back on following a similar rate cut outlook from
the Bank of England and the European Central Bank. "The FTSE
100...has managed to dodge some of this push-back, helped in some
part by the sharp falls in yields which are helping to provide a
lift to the commercial real estate and housing sector," CMC Markets
UK analyst Michael Hewson says in a market comment. Retailers,
miners and house builders are among today's main risers, with
online grocer Ocado's stock increasing 12%.
COMPANIES NEWS:
Capita PLC 11-Month Revenue Rises; Backs Medium-Term
Guidance
Capita PLC said adjusted revenue for the first 11 months of the
year rose 2.1% and that it is on track to meet medium-term
guidance.
---
Currys Sales Fall by Less Than Expected Despite
Consumer-Spending Pressure
Currys reported a lower-than-expected decrease in sales in the
first half of fiscal 2024 despite consumer spending remains under
pressure.
---
Serco Sees 2023 Revenue in Line With Views
Serco Group said Thursday that it expects revenue to rise this
year in line with guidance, and revenue to be flat next year.
---
Serco Group Acquires European Homecare for EUR40 Mln
Serco Group said that it has agreed to acquire European
Homecare-- the provider of immigration services to public sector
customers in Germany--from Korte-Stiftung for 40 million euros
($43.5 million).
---
Thames Water Appoints Chris Weston as CEO
Thames Water Utilities said that it has appointed Chris Weston
as chief executive officer from Jan. 8, replacing Sarah Bentley who
resigned in June.
---
Bunzl Flags 2023 Revenue Decline But Expects Growth Next
Year
Bunzl said it expects 2023 group revenue to decline but sees
growth next year despite the uncertain economic environment.
---
Rolls-Royce in Talks to Sell Lower-Power-Range Engines
Business
Rolls-Royce Holdings said it is in talks to sell its
lower-power-range engines business to Deutz for a price in the high
double-digit million euros.
---
Hochschild Mining Nonexecutive Director Ignacio Bustamante to Be
Succeeded by Jorge Born
Hochschild Mining said nonexecutive Director Ignacio Bustamante
will be stepping down from the board on Dec. 31 and that he will be
succeeded by Jorge Born.
---
SThree Net Fees Fall After Trimming Back Permanent Business
SThree said its fiscal 2023 performance was in line with market
expectations despite a decline in its top three countries after
reducing the average headcount at its permanent business.
MARKET TALK:
FTSE 100 Jumps 2% After Fed's Rate-Cut Signal, Ahead of BOE
Decision
1041 GMT - The FTSE 100 surges more than 2% to its highest since
late September at 7724.76 after the U.S. Federal Reserve offered
prospects of interest-rate cuts next year as it kept rates steady,
and before a Bank of England decision at 1200 GMT. "There is
enthusiasm in the air that the punishing rate hikes of the last two
years will start being reversed, sooner rather than later," writes
Susannah Streeter, head of money and markets at Hargreaves
Lansdown. The BOE is expected to hold rates at 5.25% but markets
increasingly expect rate cuts in 2024 after U.K. GDP contracted in
October, she says. Retailers, miners and house builders are among
the main risers. Online grocer Ocado tops gainers, jumping 8.9%.
(jessica.fleetham@wsj.com)
---
BOE Rate Cuts Expected at Slower Pace
1040 GMT - Markets are pricing in a slower pace of rate cuts
from the Bank of England relative to the Fed and European Central
Bank, Deutsche Bank economist Jim Reid notes, ahead of the central
bank's meeting later Thursday. The inflation situation in the U.K.
remains comparatively worse than peers, he says, with inflation at
4.6% in October, compared with November readings of 3.1% and 2.4%
in the U.S. and the eurozone respectively. Indeed there is an
expectation of a split vote at Thursday's BOE meeting, with three
of the nine members seen continuing to vote in favor of another 25
basis points hike, Reid says. Markets are pricing in just 35 basis
points of cuts by the BOE's June meeting, and risks of a delay to
cuts are mounting, he adds. (edward.frankl@wsj.com)
---
U.K. Gilt Yields Fall Ahead of BOE Meeting
1021 GMT - U.K. gilt yields decline before a Bank of England
decision at 1200 GMT. Rates are expected to be kept at 5.25% but
rate-cut expectations for 2024 are increasing after data this week
showed wage growth weakening and a bigger-than-expected GDP
contraction in October. Given this, it wouldn't be surprising to
see one BOE policymaker, perhaps Swati Dhingra, vote for a rate cut
on Thursday, Mizuho rates strategist Evelyne Gomez-Liechti says in
a note. Markets fully price a first BOE rate cut in May and price a
strong possibility for March, Refinitiv data show. The 10-year gilt
yield falls 15 basis points to 3.680% while the 2-year gilt yield
falls 16bps to 4.214%, Tradeweb data show.
(miriam.mukuru@wsj.com)
Contact: London NewsPlus, Dow Jones Newswires; Dow Jones
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(END) Dow Jones Newswires
December 14, 2023 12:33 ET (17:33 GMT)
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