FTSE creeps up as investors await BoE decision
The FTSE 100 edged up in early trading as investors awaited the Bank of England’s next move on interest rates and quantitative easing to be announced at midday.
Investors were also watching the unravelling Libor (the London Interbank Offered Rate) scandal with ratings agency Moody’s today threatening to downgrade Barclays over the damage to its management structure from the resignations of top executives.
Chief executive Bob Diamond quit on Tuesday while chairman Marcus Agius will also go once he has replaced the chief executive following the £290m fine for manipulating Libor.
Despite the bank’s reputation taking a battering its stock edged up 0.5 per cent in early trading, at least stemming recent losses.
On London’s blue chip index GKN was the top blue-chip gainer, adding more than 11 per cent after the British engineering group agreed to buy the aerospace division of the world’s number two truck maker Volvo for £633m.
Also in engineering Rolls Royce advanced by 1.1 per cent. Sweeteners giant Tate & Lyle edged up by 1.5 per cent as Exane BNP Paribas upgraded its rating. Meanwhile BP was up 0.9 per cent.
Miner Xstrata, which is in merger negotiations with commodities giant Glencore, put on 1.3 per cent.
Insurer Aviva was up 1.2 per cent after announcing that it would close 16 units as part of a cost cutting strategy and to give its stock a push after recent losses.
Steelmaker Evraz, down 2.9 per cent, was the biggest faller on the index.
United Utilities was off by 1.1 per cent while British Gas owner Centrica dipped one per cent. Goldman Sachs downgraded the stock to “neutral” from “conviction buy”.
Severn Trent was off by 0.7 per cent along with insurer Legal & General. In banking Lloyds retreated by 0.3 per cent and RBS 0.4 per cent.
In Asia the Nikkei closed down 0.2 per cent and the Hang Seng up 0.5 per cent.
Later today in the US the ADP National Employment report for June is scheduled for release along with the latest weekly initial jobless claim numbers.
Meanwhile figures from the Halifax showed that UK house prices nudged up in June.