London stocks traded higher Thursday as of the Bank of England meeting kept interest rates on hold, but economic growth could come under threat from Brexit and global trade issues, the central bank warned
Stocks are being supported globally after the U.S. Federal Reserve and the European central banks this week signaled they would support their regional economies in the face of slowing growth.
How did markets perform?
The U.K.’s FTSE 100 UKX, +0.68% is up 0.7% to 7,454.4. On Wednesday the index closed 1.2% higher.
The pound GBPUSD, +0.3402% was up 0.3% to $1.2681, more than erasing Wednesday’s gap down of 0.1%.
Oil prices rose as tensions in the Gulf continued to increase. The West Texas Intermediate (WTI) crude oil benchmark CL.1, +4.56% rallied 3% to $55.37/bbl. while the Brent benchmark BRN.1, +3.33% was 2.5% higher at $63.405/bbl.
What’s moving the markets?
The U.S. Federal Reserve did not cut interest rates, but it did signal that it was considering doing so at its policy rate announcement Wednesday, citing growing “uncertainties”. Various asset classes responded to the news, with U.S. equities rising, Treasury bond yields falling and gold reaching a five-year high.
All nine members of the BOE’s Monetary Policy Committee supported a decision to leave interest rates unchanged, but there was plenty of discussion about intensifying trade tensions and worries about the country’s economic outlook amid uncertainty over the timetable of the U.K.’s exit from the European Union.
In economic data, U.K. retail sales in May disappointed. They rose 2.3% year over year, revised, versus 2.5% expected.
Iran claimed responsibility for shooting down a U.S. drone, which it said had entered Iranian airspace near the Strait of Hormuz. A U.S. spokesperson told the Associated Press there was “no drone over Iranian territory”. The disagreement is the latest in tensions between the two countries exacerbated by an incident where the U.S. accused Iran of having attacked two oil tankers near the Gulf of Oman. Iran denies involvement.
Which stocks are active?
Halma PLC HLMA, +3.08% shares climbed 3% after UBS upgraded the stock from sell to neutral. The analysts cited higher demand in the U.S. for the safety equipment maker, and suggested it could make acquisitions.
Shares in Dixons Carphone PLC DC, -6.70% plummeted 6% after the electronics retailer reported disappointing fiscal 2019 earnings and warned over 2020 earnings. The company’s pretax profit was down 22% year over year, to £298 million
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