𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

The FTSE 100 made strong progress on Thursday as investors weighed a barrage of earnings, interest rate calls and the latest developments in the Middle East.

The FTSE 100 closed up 165.71 points, or 1.6%, at 10,378.82. The FTSE 250 ended up 264.28 points, 1.2%, at 22,465.15, and the AIM All-Share rose 5.66 points, 0.7%, at 794.09.

In London, the Bank of England’s Monetary Policy Committee voted eight to one to leave bank rate on hold at 3.75%. Bank chief economist Huw Pill put the case for a quarter point rate increase to 4.0%.

The Bank laid out three scenarios for the UK’s economic outlook as it assesses options for monetary policy amid the Middle East crisis and energy price shock.

In its April monetary policy report, the Bank said the scenarios help to illustrate a range of possible outcomes for the UK economy and weigh differing paths for energy prices and the extent of any second-round effects on domestic price and wage-setting.

Across these three scenarios, inflation is higher in the near term than the central projection in the Bank’s February report.

Bank of England governor Andrew Bailey told a press conference after the decision: “Where we go from here will depend on the size and duration of shock to energy prices.”

Deutsche Bank economist Sanjay Raja said: “Big picture, the MPC has bought itself time today. The MPC is preaching patience – but at the same time, the Bank has signalled that its patience may be wearing thin.”

On Thursday, Brent crude for June delivery was trading at 114.38 dollars a barrel on Thursday, compared with 117.20 dollars at the time of the equities close in London on Wednesday.

News site Axios reported US Central Command has prepared a plan for a wave of “short and powerful” strikes on Iran to try to break the deadlock in negotiations with Tehran.

David Morrison at Trade Nation noted this could signal an “end to the current, fragile ceasefire suggesting prolonged supply disruptions”.

In European equities on Thursday, the CAC 40 in Paris ended up 0.5%, and DAX 40 in Frankfurt jumped 1.4%.

In Europe, Christine Lagarde said European Central Bank officials discussed increasing interest rates before deciding to leave policy unchanged on Thursday.

The ECB president declined to be drawn on whether a June rate increase was now likely, as expected by financial markets, but stated that “directionally I know where we’re heading.”

“Given our position, six weeks is the right time to evaluate progress,” she added, referring to the ECB’s next meeting in June.

Ms Lagarde said the decision was unanimous and that the ECB is trying to balance the risks of being too early (raising rates) or too late.

It is “important to make the right decision from the good position we are in,” she added.

But she reiterated the ECB’s determination to return inflation to 2% in the medium-term.

ING said that while the ECB kept interest rates on hold, Ms Lagarde’s comments at the press conference suggest that a June hike has come closer.

In New York, markets were higher with big moves among technology stocks. The Dow Jones Industrial Average was up 1.3%, the S&P 500 was 0.4% higher, and the Nasdaq Composite was up 0.1%.

Meta Platforms fell 9.0% as another increase in capex unsettled investors. But Google-owner Alphabet soared 6.7% after better-than-expected results driven by its cloud business.

The yield on the US 10-year Treasury trimmed to 4.38% on Thursday, from 4.39% on Wednesday. The yield on the US 30-year Treasury was unchanged at 4.98% compared with a day earlier.

The pound firmed to 1.3588 dollars on Thursday afternoon from 1.3491 dollars on Wednesday. Against the euro, sterling strengthened to 1.1578 euros from 1.1530 euros.

The euro traded higher against the greenback, rising to 1.1731 dollars on Thursday from 1.1695 dollars on Wednesday. Against the yen, the dollar was trading at 156.65 yen, lower against 160.24 yen.

In London, a wave of corporate updates kept analysts, traders and investors on their toes.

United Utilities led the gainers, up 11%, after it reported sharply higher annual results, expanded its investment programme, and launched a £800 million equity raise to help pay for it.

The equity raise is intended to fund the equity component of a £2.5 billion increase in the company’s investment programme for the AMP8 regulatory cycle, which covers financial 2025 to 2030.

The plan was submitted to UK regulator Ofwat on Thursday, United Utilities said, and will increase the company’s total AMP8 capital investment programme to £11.5 billion.

The news gave a boost to industry peer Severn Trent, up 7.3%. Analysts expect Seven Trent to follow suit and submit proposals for further investments to Ofwat.

Rolls-Royce flew 7.6% to the good as the aerospace and defence outfit reported a good start to the year and said it will mitigate any impacts from the Middle East crisis.

But DCC fell 5.8% as it spurned a takeover approach from a consortium led by Kohlberg Kravis Roberts on the basis that it “undervalues” the company’s prospects.

Premier Inn owner Whitbread was also on the wane, ending 6.3% lower, after announcing plans to cut 3,800 jobs as part of a strategic review.

Gold traded higher at 4,616.72 dollars an ounce on Thursday, from 4,551.30 dollars on Wednesday.

The biggest risers on the FTSE 100 were United Utilities, up 145.0p at 1,457.0p, Rolls-Royce, up 83.4p at 1,182.0p, Severn Trent, up 222.0p at 3,269.0p, Endeavour Mining, up 271.0p at 4,414.0p and Standard Chartered, up 72.8p at 1,862.8p.

The biggest fallers on the FTSE 100 were Whitbread, down 151.0p at 2,234.0p, DCC, down 340.0p at 5,540.0p, Weir Group, down 110.0p at 2,654.0p, Autotrader, down 12.4p at 496.0p and Entain, down 12.8p at 543.6p.

Friday’s global economic calendar has a batch of manufacturing PMI reports and UK mortgage approval data. Financial markets in Europe are closed for Labour Day.

Friday’s local corporate calendar has first-quarter results from lender NatWest and a trading statement from publisher Pearson.

Contributed by Alliance News