London stocks close higher on miners boost; ECB cuts rates

Reuters

London stocks close higher on miners boost; ECB cuts rates

6 giu. 2024, ore 8:29 GMT

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FTSE 100 up 0.5%, FTSE 250 adds 0.2%

ECB cuts interest rates by 25 bps

John Wood Group soars after deciding to engage with Sidara on sweetened deal

Updated at 1550 GMT

By Pranav Kashyap and Purvi Agarwal

June 6 (Reuters) -British equities closed higher on Thursday, after the European Central Bank delivered a rate cut and commodity prices ticked higher, while declines in companies trading ex-dividend in London markets capped gains.

The blue-chip FTSE 100 .FTSE closed up 0.5% while the mid-cap FTSE 250 .FTMC ended 0.2% higher.

The ECB delivered its first rate cut since 2019, trimming its record high deposit rate by 25 basis points. However, it revised its inflation forecast upward, expecting it to average 2.2% in 2025, up from its target 2%.

"There has clearly been a change in trajectory. The ECB has factored in a surprising May upside inflation. There was a kind of hawkish twist (to the cut), and the timing (by when the ECB would achieve inflation target) has now been pushed a little further out," said Fabio Balboni, senior Eurozone economist at HSBC.

In the London market, precious metal miners .FTNMX551030 topped the FTSE 350 sectors with a 3.7% rise, tracking higher prices of gold. GOL/

Automobile and parts .FTNMX401010 also closed over 2% higher.

Most sectors ended the day on an upbeat note, while utilities .FTUB6510 shares slumped the most with a 1.8% decline.

With regard to the Bank of England's monetary policy path, Ipek Ozkardeskaya, a senior market analyst at Swissquote Bank said:"the ECB cut will unlikely impact the BoE's roadmap; it is expected to announce its cut once the election dust settles."

Investor focus will now shift to the crucial non-farm payrolls (NFP) data due in the United States on Friday, for more clues on the Federal Reserve's stance on monetary policy easing.

In corporate news, Vodafone Group VOD.L and National Grid NG.L declined 5.8% and 4.2% to the bottom of the FTSE 100 as they traded without entitlement to the latest dividend payouts.

John Wood Group WG.L surged 8.0% to top the mid-cap FTSE 250 after the oilfield services and engineering firm's board decided to engage with Sidara on a sweetened takeover proposal.

Reporting by Pranav Kashyap and Purvi Agarwal in Bengaluru; Editing by Sonia Cheema, Mrigank Dhaniwala and David Evans

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