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London open: Stocks in the red ahead of ECB decision
London stocks were on the back foot on Thursday ahead of the European Central Bank’s policy decision and a slate of economic data.
Economists anticipate the ECB will keep interest rates, the deposit facility and the marginal lending facility unchanged at 0.05%, -0.20% and 0.30%, respectively.
While there are expected to be no surprise changes at the policy announcement, the market will be focused on whether ECB president Mario Draghi signals further stimulus at his press conference following the bank’s governing council meeting.
Draghi is likely to provide an update on the €60bn-a-month asset-purchase programme amid speculation the ECB will extend it past September 2016 to address prolonged low inflation, a stagnant Eurozone recovery and risks from slowing emerging markets.
“Given that we’re almost a year on from its decision to start buying €60bn of mostly government bonds each month, there doesn’t seem to be much of an argument to hold off on easing further but that fact has never forced them into action before so it’s unlikely to now,” said Craig Erlam, senior market analyst at Oanda.
The Eurozone will also see the release of consumer confidence data at 1500 BST which is expected to show a decline in October to -7.4 from -7.1 the prior month.
Closer to home, UK retail sales at 0930 BST are expected to show a 4.7% increase in September compared to the same month a year ago, following a 3.5% increase in August.
Stateside, reports in the afternoon will include initial jobless claims, the house price index and existing home sales.
Company-wise, Travis Perkins slumped after the housebuilder warned that full-year EBITA will now be at the lower end of market expectations due to recent sector weakness.
Anglo American declined after saying it was postponing major project decisions at its platinum unit until at least 2017 and had cut diamond production due to soft demand.
Foxtons dropped after saying transactions in central London remained at a low level following recent strong price growth and stamp duty changes.
Debenhams gained after posting growth in annual pre-tax profit thanks to solid progress made against its strategic targets
