Source: Sharecast
The FTSE 100 ended the session up 1.28% at 7,385.34, and the FTSE 250 was ahead 0.34% at 20,975.69.
Sterling was in a mixed state, last trading up 0.13% on the dollar at $1.3166, while weakening 0.74% against the euro to €1.1826.
“In the wake of the Fed and BoE rate hikes traders have turned more defensive, and much of yesterday’s bullishness in markets has been pruned back,” said IG chief market analyst Chris Beauchamp.
“Like central banks, investors are aware of the rocky global outlook, made worse by the war in Ukraine, and are still nervous about how the downturn in expected GDP growth will hit earnings.
“With a month to go until the next US earnings season, markets could find that the next few weeks are volatile ones to navigate.
“In addition, Russia has poured cold water on the hopes of a peace deal that lay behind much of Wednesday’s bounce, although that seems not to have registered much so far.”
At lunchtime, the Monetary Policy Committee voted 8-1 to lift rates to 0.75%, with only deputy governor Jon Cunliffe voting against a hike.
It marked the third time the Bank upped interest rates in four months as it looked to combat surging inflation, and left rates at their highest level since the start of the pandemic in March 2020.
Inflation was recently measured at a 30-year high of 5.5% - well above the Bank’s target of 2%.
The BoE also lifted its forecast for inflation.
“Regarding inflation, the invasion of Ukraine by Russia has led to further large increases in energy and other commodity prices including food prices. It is also likely to exacerbate global supply chain disruptions, and has increased the uncertainty around the economic outlook significantly," it said.
"Global inflationary pressures will strengthen considerably further over coming months, while growth in economies that are net energy importers, including the United Kingdom, is likely to slow.
"Inflation is expected to increase further in coming months, to around 8% in 2022 Q2, and perhaps even higher later this year."
Victoria Scholar, head of investment at Interactive Investor, said that at the previous meeting, the Monetary Policy Committee was divided over whether to carry out a 0.25% hike or go for a double 0.5% rate hike, narrowly favouring the former.
“However last month’s hawkish dissenters fell back into line at today’s meeting, after the war in Ukraine prompted a more cautious approach amid fears of an economic slowdown."
She noted that for flexible rate mortgage holders, the cost of borrowing is on the rise, making repayments more expensive.
"For savers, ordinarily this would mean a greater rate of return on cash deposited in the bank.
“However unfortunately with inflation at a 30-year high of 5.5%, savings are being wiped out by rising price levels with the real rate of return on savings in the bank still in decline," she said.
Overnight, the US Federal Reserve hiked rates by 25 basis points as expected, marking the first rate increase since 2018.
The Fed also pencilled in a 25 basis points rate hike at each of the six remaining meetings this year.
More broadly, the Russia-Ukraine conflict remained in focus, with Russia reportedly sending an order to make $117m interest payments on two dollar-denominated bonds that were due on Wednesday, as it looked to avoid default.
According to reports, Russia’s financial ministry sent an order to Citibank’s London branch to make the payment, though it was not known whether the payment was made in dollars or rubles.
Moscow had until the end of business on Wednesday to make the payments - if they were not made within the 30-day grace period, it would be Russia’s first default on foreign debt since 1918.
Fitch Ratings said on Tuesday that making a settlement in any currency other than dollars within the grace period would still be considered a default.
In transport news, hundreds of crewmembers at one of Britain’s largest ferry operators were sacked earlier, as P&O Ferries cancelled sailings for “several days” and warned on its viability.
The company, owned by Nasdaq-traded Emirati shipping conglomerate DP World, ordered all its vessels to port on Thursday morning “in preparation for a company announcement”.
Transport union RMT said the fired workers were being replaced by cheaper foreign labour, and has told members to stay on their ships in protest at the mass firing.
“In its current state, P&O Ferries is not a viable business - we have made a £100m loss year on year, which has been covered by our parent DP World,” the company said in a statement.
“This is not sustainable. Without these changes there is no future for P&O Ferries.”
In equity markets, specialist lending and retail savings group OSB Group jumped 14.49% after it reported record full-year profits and announced a £100m share buyback.
Trainline gained 7.12% after it said that ticket sales and revenues improved in 2022 as it recovered from the impact of the pandemic.
Landscaping products manufacturer Marshalls rose 4.74% after saying it had delivered record sales and adjusted profitability in 2021, reflecting sustained heightened demand post Covid-19 lockdowns.
North Sea oil and gas producer Harbour Energy advanced 4.34% after it reported a return to profits in its first results since its merger with Premier Oil.
On the downside, NatWest was off 3.93%, M&G slid 4.12%, Anglo American slipped 1.39%, Hikma was 0.34% weaker, and Crest Nicholson was down 3.88% as they traded without entitlement to the dividend.
Online grocer Ocado slid 8.18% after it said retail revenue fell in the first quarter of 2022, and warned about uncertainty caused by the rising cost of living.
Cineworld Group was in the red by 4.94% despite saying it had narrowed full-year losses as Covid lockdowns eased globally, and that it expected a strong return to trading in March after a hit from the Omicron strain of the virus at the start of 2022.
Market Movers
FTSE 100 (UKX) 7,385.34 1.28%
FTSE 250 (MCX) 20,975.69 0.34%
techMARK (TASX) 4,337.06 0.83%
FTSE 100 - Risers
Entain (ENT) 1,650.00p 4.36%
Fresnillo (FRES) 730.80p 4.22%
Smurfit Kappa Group (CDI) (SKG) 3,538.00p 3.88%
Halma (HLMA) 2,492.00p 3.43%
Rio Tinto (RIO) 5,595.00p 3.27%
Shell (SHEL) 1,965.40p 3.25%
Airtel Africa (AAF) 146.60p 3.02%
Experian (EXPN) 3,037.00p 3.02%
Diageo (DGE) 3,692.50p 2.78%
Spirax-Sarco Engineering (SPX) 12,870.00p 2.75%
FTSE 100 - Fallers
Ocado Group (OCDO) 1,105.00p -8.18%
Polymetal International (POLY) 140.10p -5.24%
M&G (MNG) 216.40p -4.12%
NATWEST GROUP PLC ORD 100P (NWG) 212.70p -3.93%
Royal Mail (RMG) 363.60p -2.18%
International Consolidated Airlines Group SA (CDI) (IAG) 142.18p -2.07%
Barclays (BARC) 171.72p -1.96%
Pearson (PSON) 810.20p -1.91%
Associated British Foods (ABF) 1,739.50p -1.44%
Anglo American (AAL) 3,654.00p -1.39%
FTSE 250 - Risers
OSB Group (OSB) 544.50p 14.49%
Essentra (ESNT) 314.00p 9.98%
Auction Technology Group (ATG) 1,048.00p 7.27%
Trainline (TRN) 213.60p 7.12%
FDM Group (Holdings) (FDM) 973.00p 6.81%
Centamin (DI) (CEY) 93.56p 5.15%
Marshalls (MSLH) 674.00p 4.74%
Drax Group (DRX) 715.50p 4.60%
Baillie Gifford US Growth Trust (USA) 226.00p 4.39%
Harbour Energy (HBR) 413.60p 4.34%
FTSE 250 - Fallers
Petropavlovsk (POG) 1.89p -14.09%
Helios Towers (HTWS) 120.00p -11.24%
Wizz Air Holdings (WIZZ) 2,672.00p -7.06%
Cineworld Group (CINE) 36.14p -4.94%
Syncona Limited NPV (SYNC) 178.00p -4.30%
Bodycote (BOY) 695.50p -4.27%
Crest Nicholson Holdings (CRST) 287.40p -3.88%
Vesuvius (VSVS) 370.40p -3.84%
Oxford Instruments (OXIG) 2,070.00p -3.72%
easyJet (EZJ) 530.20p -3.64%
