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FTSE 100: This morning’s risers and fallers

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UK stocks snapped a five-day winning streak on Wednesday ahead of the minutes from meetings at the Bank of England (BoE) and Federal Reserve (Fed).

With the markets on the lookout for hints about future policy tightening at the two central banks, investors chose to take profits after equities reached a three-week high on Tuesday.

The abrupt end to a ceasefire between Hamas and Israel as well as the reported killing of an American photojournalist by Islamic State militants could have also prompted a cautious mood amongst traders, as geopolitical tensions once again sap risk appetite.

The FTSE 100 was 0.1% lower at 6,770 in early trading after having settled at 6,779.31 the previous session, its highest close since 29 July.

Central bank minutes in focus

With economic data thin on the ground, the focus of Wednesday’s trading session will be on central banks in the UK and US.

First up is the BoE which releases the details of this month’s Monetary Policy Committee (MPC) meeting at 09:30, which will give a breakdown of how many members voted in favour of keeping the Bank Rate at the record-low level of 0.5% again.

According to analysts at Danske Bank, investors will be watching closely to see whether the MPC voted unanimously. “Speculation of a dissent in voting have especially been fuelled after BoE governor Mark Carney on Sunday night said that the central bank could hike rates before wages increase,” they explained.

Nevertheless, July’s sharper-than-expected dip in consumer price inflation – as revealed by data on Tuesday – has prompted some economists to push back their expectations of a rate rise firmly into next year.

Minutes from last month’s Federal Open Market Committee (FOMC) meeting in the States will be released at 19:00 and could also spark some volatility on financial markets worldwide. The FOMC delivered a relatively hawkish message about inflation at its latest meeting, lifting its medium-term forecasts for price rises.

Investors may also be on the lookout for comments about the Fed’s exit strategy from its quantitative easing programme which is on course to finish in October.

Balfour slumps, ex-div stocks fall

As expected, construction group Balfour Beatty has rejected Tuesday’s improved merger offer from rival Carillion, causing shares in both companies to fall early on. Balfour said the proposal was not in its shareholders’ best interests, noting that the latest offer was only a “small value change” from the preceding bid.

A number of blue chips were weighing on the market on Wednesday morning after going ex-dividend, including British American Tobacco, Hammerson, InterContinental Hotels Group, Mondi, Prudential, Rexam and Carnival.

Stocks on the FTSE 250 trading without access to their latest dividend payouts included Brit, Catlin, Fidessa and Taylor Wimpey.

Mining and trading giant Glencore was a bright spark after reporting an 11% increase in its interim dividend and unveiling a $1bn share buyback after profits rose in the first half of 2014.

Meanwhile, a reduction in risk appetite was benefiting stocks in the defensive sectors such as utilities, with National Grid, SSE, Centrica and United Utilities among the best performers.

Housebuilders such as Persimmon, Barratt Developments and Berkeley Group were pulling back after a decent performance on Tuesday.

FTSE 100 – Risers
Centrica (CNA) 317.40p +0.79%
Standard Chartered (STAN) 1,227.00p +0.78%
Glencore (GLEN) 361.50p +0.71%
Hargreaves Lansdown (HL.) 1,114.00p +0.63%
SSE (SSE) 1,514.00p +0.60%
Royal Mail (RMG) 441.40p +0.59%
Kingfisher (KGF) 312.40p +0.58%
GlaxoSmithKline (GSK) 1,420.50p +0.57%
Ashtead Group (AHT) 937.00p +0.54%
United Utilities Group (UU.) 880.50p +0.51%

FTSE 100 – Fallers
Mondi (MNDI) 1,004.00p -1.86%
British American Tobacco (BATS) 3,523.50p -1.62%
Hammerson (HMSO) 606.00p -1.38%
Rexam (REX) 487.60p -1.30%
Antofagasta (ANTO) 809.00p -1.10%
CRH (CRH) 1,413.00p -1.05%
Carnival (CCL) 2,272.00p -1.05%
Rolls-Royce Holdings (RR.) 1,023.00p -0.97%
3i Group (III) 388.50p -0.89%
Old Mutual (OML) 194.90p -0.86%

Source: ShareCast

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