LONDON MARKETS: FTSE 100 Rises For First Day In Four Ahead Of Bank Of England Decision
February 04 2016 - 3:42AM
Dow Jones News
By Carla Mozee, MarketWatch
U.K. stocks jumped Thursday as commodity shares rallied on a
drop in the U.S. dollar, as investors waited to hear the Bank of
England's latest decision on interest rates.
The FTSE 100 climbed 1.2% to 5,903.77, with shares in mining
companies and oil and gas companies leading the benchmark toward
its first win in four sessions.
The dollar lost ground against major rivals Thursday. The fall
extended losses from Wednesday, when the dollar was crushed
(http://www.marketwatch.com/story/risk-averse-investors-plunge-anew-into-japanese-yen-shunning-dollar-2016-02-03)
after disappointing U.S. economic data was seen as putting
interest-rate increases by the Federal Reserve on hold.
The euro spiked above $1.11 on Thursday as European Central Bank
President Mario Draghi
(http://www.marketwatch.com/story/draghi-warns-of-risk-of-not-acting-on-inflation-2016-02-04)spoke
at a Bundesbank conference in Germany.
Oil and metals prices benefited from the dollar's pullback, as
it makes them less expensive to buy for holders of other
currencies. In turn, resource shares pushed higher. Iron ore and
platinum miner Anglo American PLC (AAL.LN) surged 9.6%, Glencore
PLC (GLEN.LN) moved up 8.4%, and BHP Billiton PLC (BLT.LN) (BHP.AU)
(BHP.AU) rose 5.6%.
Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) shares were higher by
4.7% although the oil major posted a nearly 60% slide in
fourth-quarter profit
(http://www.marketwatch.com/story/shell-profit-falls-almost-60-on-oil-slump-2016-02-04).
The pound was buying $1.4624, up from $1.4603 late
Wednesday.
Investors will receive the Bank of England's Quarterly Inflation
Report and its decision on interest rates at 12 p.m. London time,
or 7 a.m. Eastern Time. Policy makers, led by Bank of England
Governor Mark Carney, are not expected to change the benchmark
rate, which has stood at 0.5% since March 2009.
The inflation report should be "particularly interesting,
because near-term at least markets are placing a small probability
of a rate cut in the coming months," said Simon Smith, chief
economist at FxPro, in a note.
Smith pointed out that Carney in January said it wasn't the time
to raise interest rates. "This would suggest that he has taken to
enunciating the obvious, so it's on the prospect of lower rates
that questions will no doubt be focused up at the press conference
today."
Carney will hold a press conference at 12:30 p.m. London
time.
(END) Dow Jones Newswires
February 04, 2016 04:27 ET (09:27 GMT)
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