London stocks slip before Bank of England update

GMT 11:56 2015 Thursday ,05 November

Arab Today, arab today London stocks slip before Bank of England update

London's FTSE 100 index slid 0.50 percent in morning trade
London - AFP

London's stock market dropped on Thursday as investors looked ahead to the Bank of England's latest interest rate decision and inflation forecasts.

In the eurozone, the Frankfurt and Paris indices were higher in midday deals.

"Super Thursday is upon us again as the Bank of England treats us to a flurry of information with investors having to digest the interest rate decision, meeting minutes, the quarterly inflation report and a speech from the Governor himself, Mark Carney," said Craig Erlam, senior market analyst at Oanda trading group.

"There may currently be some confusion in the markets around the timing of the first rate hike from the BoE (since mid-2007), but after today's events things should hopefully be much clearer."

Approaching midday in the British capital, 's benchmark FTSE 100 index slid 0.50 percent compared with Wednesday's close to 6,380.60 points.

The Paris CAC 40 index climbed 0.84 percent to 4,989.79 points and Frankfurt's DAX 30 won 0.74 percent to 10,925.63.

"Following yesterday’s upside moves in global equity indices, the FTSE is underperforming its European peers," noted Brenda Kelly, head analyst at London Capital Group.

"The euro continues to head lower, mostly on dollar strength but also on the fairly dire German factory orders this morning which may spur some additional stimulus from the ECB."

In foreign exchange, the euro fell to a three-month low at $1.0834, it later recovered to $1.0859 but still down from $1.0865 late on Wednesday in New York.

The British pound was slightly higher against the dollar and euro ahead of the Bank of England's rate decision due at 1200 GMT.

Earlier Thursday, major Asian markets mostly shrugged off a negative lead from Wall Street, with Shanghai performing especially strongly and Japan Post shares soaring again in Tokyo.

US stock indices had dropped Wednesday after Federal Reserve chief Janet Yellen left on the table the possibility of an increase to US interest rates in December.

"When looking at UK economic data alongside US economic data there does appear to be a much more compelling case for raising rates in the UK than there does in the US, yet all the talk is about the prospect of a US rate rise next month," said Michael Hewson, chief market analyst at CMC Markets UK.

"While inflation remains very low, wage growth here in the UK is well above US levels," he added in a note to clients.

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