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FTSE 100 closes higher but investors cautious before BoE rate hike
from Tuesday 1 July 2023
by cityam
THE FTSE 100 closed slightly higher yesterday, after a tempered start to a week in which the Bank of England is expected to hike interest rates to their highest level since 2008.
The capital’s premier index kicked off down 0.26 per cent, before bouncing back by close to 0.17 per cent on stronger-than-expected eurozone GDP figures.
The domestically-focused mid-cap FTSE 250 index followed a similar trajectory, sliding 0.23 per cent on the open before a recovery before close to finish up 0.2 per cent.
The BoE is expected to raise rates on Thursday by 25 basis points to 5.25 per cent, a 14th consecutive hike and marking the highest levels seen since 2008. That rise would mark a slowdown from June’s 50 basis point jump. Yet investors were still cautious yesterday, with a higher hike not off the cards.
The biggest faller was Rolls-Royce.
Ocado Group closed down 3.99 per cent while BT Group shares were down 1.65 per cent after the appointment of new CEO Allison Kirby.
Airline conglomerate IAG was the FTSE’s biggest riser, continuing a share price boost on the back of a record £1.1bn profit reported in its half year results last week amid booming consumer spending on travel.
On the FTSE-250, manufacturing group Marshalls closed down 2.24 per cent.
A major pledge from Prime Minister Rishi Sunak to expand oil drilling in the North Sea sent shares in Ithaca Energy and Harbour Energy up 8.03 and 5.81 per cent respectively.
Dr Martens was also up strongly after a report that activist fund manager Sparta Capital had acquired stock worth tens of millions of pounds.
Hydrogen specialist AFC Energy has seen “strong commercial progress” in 2023, Peel Hunt analysts said. The firm’s strategy of deploying its ‘Power Tower’ hydrogen generators in trials on construction company sites has “borne fruit” and “provides a solid pathway to UK mass market commercialisation of its hydrogen generators”. They say ‘buy’ with a 125p target price.
The Chinese Takeaway
Marshalls has had a difficult year on the back of a slowdown in the UK housing market. Shares in the building and roofing products supplier tumbled after it announced plans to cut 250 jobs and lowered its annual forecast. Peel Hunt lowered its target price from 380p to 310p but retained its ‘buy’ rating, arguing that management is taking “the right actions” and a strong brand will solidify appeal.
