FTSE 100 dips as stronger pound, mixed earnings weigh
Market Overview and Key Drivers
July 30 (Reuters) - London's FTSE 100 closed slightly lower on Thursday after the Bank of England decided to keep interest rates on hold and mixed earnings reports weighed on the blue-chip index.
The FTSE 100 index closed down 0.1% at 10,897.27 points, pulling back from an intraday record high earlier in the session. The UK midcap FTSE 250 rose 0.3%
Central Bank Decisions and Currency Movements
Bank of England Policy and Impact
• The Bank of England kept interest rates on hold as it waits to see how the Iran war affects inflation pressures, although the renewal of hostilities prompted a third policymaker to back a rate hike.
Pound Sterling Reaction
• The pound initially fell after the BoE's decision but gained ground as the day wore on against a broadly softer dollar.
Currency Exposure of FTSE 100 Firms
• The FTSE 100 is made up of international companies that draw a large part of their revenue in dollars, making them vulnerable to currency fluctuations.
U.S. Federal Reserve Stance
• The U.S. Federal Reserve left interest rates unchanged on Wednesday even as chief Kevin Warsh pledged an unwavering commitment to bring inflation down, a message that left markets confused about what he was prepared to do.
Sector Performance and Company Highlights
Gainers in Metals and Defence
Miners and Precious Metals
• Precious and industrial metal miners gained 1.9% and 3%, respectively, tracking gains in copper prices, and steady prices of bullion. [MET/L] [GOL/]
Aerospace and Defence Surge
• Aerospace and defence firms were the top sectoral gainers following a 6% boost to Rolls-Royce shares after the engineering company raised its full-year outlook far beyond market expectations.
Industrial Sector Growth
• Paper and packaging firm Mondi surged 10.9%, its sharpest one-day jump since August 2022 after first-half results which powered the FTSE 350 General Industrials sector to its highest level since March 2025.
Sector Laggards and Energy
Industrial Support Services Decline
• On the flip side, industrial support services slipped, weighed down by a 20.6% slump in Rentokil after the pest control firm flagged weakness in its North America business.
Energy Sector Performance
• Energy stocks dipped 0.1% despite Brent crude topping $90 a barrel after the U.S. military struck dozens of targets in Iran.
(Reporting by Purvi Agarwal and Sruthi Shankar in Bengaluru; Editing by Devika Syamnath and Elaine Hardcastle)
