London midday: FTSE maintains gains after BoE hikes rates as expected

(Sharecast News) - London stocks were still in the black by midday on Thursday after the Bank of England hiked rates for the first time in more than three years, as expected, amid an avalanche of corporate news. The FTSE 100 was up 0.8% at 10,914.02. Meanwhile, the FTSE 250 hit an all-time high of 25,176.12.

Oil prices were on the rise again, with Brent crude up 2.2% at $96.68 a barrel and West Texas Intermediate 1.6% higher at $89.52.

The BoE lifted rates by 25 basis points to 4% in the face of mounting inflation. The last time it increased interest rates was in August 2023, when inflation was more than 6%. The Monetary Policy Committee voted 8-1 in favour of the hike, with Catherine Mann preferring a half-point increase.

The consumer price index currently stands at 3.5%, primarily due to the soaring cost of fuel. The BoE's long-term target for inflation is 2%.

Susannah Streeter, chief investment strategist at Wealth Club, said: "A hike was widely expected, so it hasn't set off fireworks on financial markets, but it will give borrowers a shiver as budgets become stretched in the year ahead. Policymakers were unanimous in their plot to raise rates, which may strengthen expectations of further hikes to come.

"The cold reality of an era of higher interest rates is hitting home, with three further rate hikes being priced in by financial markets. The conflict in the Middle East has had deep repercussions, and policymakers are anxious about higher energy costs being passed on to consumers and becoming embedded in the economy. So they are trying to dampen down demand by making borrowing more expensive. This is set to act as a drag on spending and investment, make employers more reticent about taking on additional staff, and keep wage growth in check.

"Hopes have been swirling this week that the big win by Democrats in the US will mean a further escalation is curtailed, given they look set to have a tighter hold on military spending budgets. However, Brent Crude has been creeping higher again, as uncertainty continues to reign and energy prices still remain around a third higher than before the conflict began. Investors are being reminded that geopolitical risks are still a powder keg that could reignite inflation."

Investors were also mulling a survey showing that the downturn in the UK construction sector deepened in October amid a slump in housebuilding.



In equity markets, BT Group surged as it raised its interim dividend and maintained full-year guidance as it reported higher revenues and profits for the first half, alongside a reduction in its pension deficit.

Diageo shares fizzed higher after the drinks giant reiterated its full-year outlook despite ongoing softness in North America. Updating on trading, the owner of Guinness and Smirnoff said first-quarter net sales rose 1.2%, or 1.4% on an organic basis, to $4.93bn, with volumes up 1.1% and the price/mix 0.3%.

All regions showed organic growth during the period, apart from North America, Diageo's biggest market, where sales fell 3.6%. But the blue chip insisted trading was line with expectations, and left its full-year outlook unchanged.

National Grid shares rose after the energy infrastructure group reported a sharp increase in first-half profits and upgraded its full-year earnings guidance, supported by higher regulated revenues and record investment in its networks.

Next edged up as third-quarter sales at the fashion and homeware retailer beat expectations, driven by the international operations, although UK growth was volatile after the hot summer weather that deterred shoppers from venturing out.

Morgan Sindall jumped as it said full-year 2026 results were set to be slightly ahead of its previous expectations as it announced the launch of a £75m share buyback.

Morgan Advanced Materials was a high riser as it said full-year profit was set to be around the upper end of expectations.

On the downside, Autotrader slumped as the automotive marketplace and digital platform reported a dip in first-half profit and revenue but maintained its full-year operating profit guidance.

Defence firms BAE Systems and Babcock lost ground again, having fallen on Wednesday amid expectations the Democrats' sweeping victory in the US midterms would lead to lower defence spending.

Ashmore tumbled as it traded without entitlement to the dividend.

Hikma Pharmaceuticals slid as the drug maker trimmed revenue guidance for its injectables division, offsetting a more upbeat outlook for its branded business.

Embattled housebuilder Vistry fell after it warned that market conditions remained tough, as it got a sweeping restructuring underway.

Market Movers

FTSE 100 (UKX) 10,914.02 0.78% FTSE 250 (MCX) 25,106.20 0.76% techMARK (TASX) 6,336.61 0.18%

FTSE 100 - Risers

Lion Finance Group (BGEO) 13,080.00p 4.22% BT Group (BT.A) 240.10p 4.02% Fresnillo (FRES) 2,537.00p 3.64% Diageo (DGE) 1,864.00p 2.98% InterContinental Hotels Group (IHG) 178.05p 2.74% Next (NXT) 16,020.00p 2.63% National Grid (NG.) 1,298.50p 2.57% Airtel Africa (AAF) 285.60p 2.51% Standard Chartered (STAN) 2,190.00p 2.48% Rio Tinto (RIO) 6,353.00p 2.48%

FTSE 100 - Fallers

BAE Systems (BA.) 1,892.00p -4.63% Autotrader Group (AUTO) 551.40p -3.68% Coca-Cola HBC AG (CDI) (CCH) 4,860.00p -1.99% Babcock International Group (BAB) 1,026.00p -1.06% Associated British Foods (ABF) 2,001.00p -0.99% Vodafone Group (VOD) 120.15p -0.83% IG Group Holdings (IGG) 967.50p -0.72% Convatec Group (CTEC) 252.60p -0.55% Metlen Energy & Metals (MTLN) 48.68p -0.45% Shell (SHEL) 3,779.50p -0.43%

FTSE 250 - Risers

Morgan Sindall Group (MGNS) 4,536.00p 9.66% Morgan Advanced Materials (MGAM) 280.00p 8.11% Endeavour Mining (EDV) 4,045.00p 7.07% Amaroq Ltd. Npv (DI) (AMRQ) 106.25p 6.64% RS Group (RS1) 802.00p 6.05% Pan African Resources (PAF) 116.40p 5.15% Hochschild Mining (HOC) 482.40p 4.55% BlackRock World Mining Trust (BRWM) 908.00p 4.37% OSB Group (OSB) 518.00p 4.18% Helios Towers (HTWS) 221.60p 3.93%

FTSE 250 - Fallers

Ashmore Group (ASHM) 214.80p -6.37% Hikma Pharmaceuticals (HIK) 1,650.00p -5.79% EnQuest (ENQ) 26.75p -3.95% Vistry Group (VTY) 280.00p -3.72% Hansa Investment Company Limited (DI) (HAN) 332.00p -3.49% Harbour Energy (HBR) 271.40p -2.93% Partners Group Private Equity Limited. (EUR) (PEY) 6.68p -2.91% GCP Infrastructure Investments Ltd (GCP) 81.00p -2.88% Shawbrook Group (SHAW) 294.00p -2.81% Pacific Horizon Inv Trust (PHI) 948.00p -2.58%