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Miners, financials weigh on FTSE ahead of BoE rate decision

Published 14/09/2017, 09:49
© Reuters. People stand and sit outside the London Stock Exchange in Paternoster Square, London
UK100
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BARC
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BP
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NXT
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LLOY
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PRU
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SHEL
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MRW
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ABDN
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RIO
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AAL
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BHPB
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STAN
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GLEN
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By Julien Ponthus

LONDON (Reuters) - UK shares opened slightly lower on Thursday with the mining and financial sectors weighing on the FTSE (FTSE) as investors waited to see how the Bank of England will react to fresh data showing a jump in inflation.

The FTSE 100 (FTSE) edged down 0.1 percent at 7,369 points after ending the previous session in the red as a temporary spike in the British currency shook equity investors.

The BoE's policymakers are widely expected to leave rates at a record low 0.25 percent when they make their policy statement at 11:00 GMT.

Any sign that a rate hike could come sooner than expected is likely to rattle markets even if most economists polled by Reuters do not expect rates to rise until 2019.

"With markets still mostly disregarding early rate hikes, stronger hawkish rhetoric than expected could underpin sterling rates, and the currency", said Rabobank in a morning note.

The pound's slump since Britain voted to leave the European Union in June 2016 has boosted the FTSE 100's predominantly dollar-earning constituents, which get an accounting boost when converting revenues back to pounds.

Mining stocks took the most points off the FTSE 100, with Glencore (L:GLEN), Rio Tinto (L:RIO), BHP Billiton (L:BLT) and Anglo American (L:AAL) dropping between 1.7 and 2.2 percent as a decline in industrial metals and disappointing data from China hit shares.

Most financial stocks were also trading lower. Lloyds (L:LLOY), Prudential (L:PRU), Barclays (L:BARC), Standard Life Aberdeen (L:SLA) and Standard Chartered (L:STAN) were down between 0.4 and 1.1 percent.

Energy groups were in positive territory as oil prices are giving a boost to the sector, with Royal Dutch Shell (L:RDSa) and BP (L:BP) both up 0.8 percent.

British fashion chain Next (L:NXT) was the top gainer with an 11.8 percent jump after it lifted its guidance.

© Reuters. People stand and sit outside the London Stock Exchange in Paternoster Square, London

On the opposite side, Morrisons (L:MRW), Britain's No. 4 supermarket, fell about 5 percent after publishing first-half results.

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