FTSE 100 Jumps Post Fed Rate Hike as Market Eyes BoE Decision
Market Reaction and Key Financial Developments
FTSE 100 and FTSE 250 Performance
Sept 17 (Reuters) - The UK's FTSE 100 advanced on Thursday as the U.S. Federal Reserve delivered a widely expected interest-rate hike, with market attention turning to the Bank of England's rate decision due later in the day.
The blue-chip FTSE 100 index rose 0.51% to 10,742.81 points by 1034 GMT, while the midcap FTSE 250 climbed 0.42%.
Company Highlights
Next Raises Annual Outlook
• Clothing retailer Next gained 0.82% after raising its annual outlook for the fourth time this year, increasing its annual pre-tax profit guidance by £12 million ($16.08 million) to £1.255 billion.
AstraZeneca Investment in China
• AstraZeneca rose around 1% after unveiling an investment of nearly 200 million yuan ($29.81 million) to upgrade its production and supply base in Wuxi, China, the company's Chinese unit said in a statement.
Precious Metals and Mining Stocks
• Precious metals rose 1.4% after gold prices rose following the Fed hike, with Pan African Resources and Endeavour Mining up by 4.5% and 1% respectively. [GOL]
Midcap Movers
Wizz Air Financial Targets
• Among mid-caps, budget carrier Wizz Air climbed 2.4% after the airline set out medium-term financial targets, including annual revenue of €10 billion ($11.47 billion). It also raised its revenue per available seat kilometre (RASK) forecast for the second quarter.
Galliford Try Profit Surge
• Construction firm Galliford Try advanced 3.8% after a 24% jump in annual profits, helped by higher project activity and disciplined cost control.
Central Bank Decisions and Economic Outlook
Bank of England Rate Expectations
• BoE is widely expected to leave interest rates steady later in the day, but all eyes will be on any hint of whether high energy prices could force it to hike in November.
• Traders still expect interest rates to rise by at least 43.5 basis points by the year-end, according to LSEG-compiled data.
• "The BoE cannot hike rates into what's chiefly a supply shock – this is not 2022 and it's not the US, where the economy is much stronger and benefitting from the AI boom," Saxo UK Investor Strategist Neil Wilson said in a note.
Federal Reserve Rate Hike
• The Fed raised interest rates by 25 basis points on Wednesday and indicated one more hike in the coming months, as newly appointed Chief Kevin Warsh joined a unanimous vote in favour of the move.
• The decision follows a surge in oil prices in recent months, driven by the war in the Middle East that has stoked inflation and prompted policymakers worldwide to reassess monetary policy.
(Reproting by Anand Gopal in Bengaluru; Editing by Janane Venkatraman)
