- FTSE 100 closes at 7,907
- Wall Street sees opening gains shrink after data, earnings
- Rolls-Royce jumps over 20% as profits beat forecasts
4:45pm: FTSE 100 finishes another day in red
The FTSE 100 marked another negative close, finishing Thursday around 23 points or 0.29% lower at 7,907.
3.55pm: Retailers stay pessimistic
The latest Confederation of British Industry (CBI) Distributive Traders Survey released earlier today showed that UK retail sales growth ticked up in the year to February, but retailers are cautious ahead of an expected decline next month.
The CBI's reported sales balance - the weighted difference between the percentage of retailers reporting an increase and those reporting a decrease - rose to +2 this month from -23 in January.
But Martin Sartorius, CBI principal economist, said in the report: "Whilst retail sales volumes were largely unchanged in the year to February and slightly above seasonal norms, firms remain pessimistic about their business outlook and are bracing themselves for yet another fall in sales next month."
"At the upcoming Spring Budget, the Government must take action to tackle the roadblocks in the way of the UK's economic growth. Retailers are now looking for action in areas like skills and investment," he added.
3.30pm: Power in the union
Workers at Drax Hydro Limited which operates power stations across Scotland have voted to go on strike in a dispute over pay, the Unite union has said.
The strike action days are expected to take place from mid-March with Unite to make an official announcement next week, Reuters reported.
Drax Hydro is a part of Drax Group PLC which today posted higher-than-expected full-year profits of £731mln. The company provides around 7% of Britain's electricity through its network of power stations.
"Drax Hydro is a profitable energy company and it can afford to pay its workforce significantly more than the current offer," said Unite General Secretary Sharon Graham in a statement.
A Drax spokesperson told Reuters that in the event of industrial action, there will be no risk to public electricity supplies.
3.10pm: We need to talk
BT Group PLC has warned that Chancellor Jeremy Hunt will send Britain in an anti-investment direction if he pushes ahead with his planned increase in corporation tax.
The Chancellor plans to increase the tax rate on businesses to 25% from 19% in April.
The telecoms giant finance boss said the tax hike would harm the UK’s international standing and pose a threat to the country’s economy.
“Productivity growth is stubbornly low and although not just a UK problem, does mean that some of our international competitors are starting to outpace us,” said BT’s CFO, Simon Lowth, in an interview in the Telegraph.
2.55pm: Wall Street rally
The FTSE 100 index poked into positive territory as US stocks started higher on Thursday after the release of the minutes from the Federal Reserve’s latest rate-setting meeting on Wednesday provided clarity as to the central bank’s path forward.
Around 20 minutes after the market open, the Dow Jones Industrial Average had added 205 points or 0.6% at 33,251 points, the S&P 500 was ahead 0.9%, and the tech-laden Nasdaq Composite was leading the charge, up 1.1%.
On the data front, US jobless claims remained at historically low levels last week, dipping to 192,000 from 195,000, below the consensus expectation of 200,000.
Pantheon Economics chief economist Ian Shepherdson said the trend in claims remains very low and stable, though the weekly prints are noisy and subject to the influence of the weather, which was substantially warmer than usual last week.
Elsewhere, US fourth quarter gross domestic product (GDP) was revised down to 2.7% from 2.9%, below the consensus of 2.9%, which Shepherdson noted as “a bit of a surprise.”
“All the net hit is in consumption, cut to 1.4% from 2.1%, with stronger investment spending only a partial offset,” he said. “The data also show that the core PCE deflator rose more quickly than previously believed, climbing at a 4.3% rate, up from the initial 3.9% estimate.”
In London, around 2.55pm, the FTSE 100 index was 3.5 points firmer at 7,934, just below the day's new peak of 7,935.19
2.25pm: BP pulled back
BP's rating has been downgraded to 'hold' from 'buy' by analysts at Berenberg on valuation grounds although their price target for the oil giant has risen to 590p from 560p, with the stock currently trading at 548.30p after a post-results boost.
The German bank's analysts said upside risks remain, linked to the high cash returns and any further speculation around BP being a bid target, but they are downgrading after the strong share price performance.
"The stock reacted extremely positively to the update, rising 17% in three trading days, helped in our view by speculation regarding potential acquisition interest from US oil majors," the Berenberg analysts said.
"We view the update as positive from a shareholder perspective, but we believe the company's strategy is now more closely aligned to peers - while its valuation has moved to a premium," they concluded.
2.10pm: Ukraine support strong
The Group of Seven (G7) nations have raised their economic support to Ukraine to $39 billion for this year and have urged an IMF programme for the country by the end of March, according to a statement released by the bloc's current president Japan, Reuters reported.
The decision came after a meeting of the bloc's finance ministers and central bank governors on the eve of the war's first anniversary.
Ukraine is hoping to clinch a $15 billion programme with the International Monetary Fund that will cover immediate financial assistance and support for structural reforms to underpin efforts at post-conflict rebuilding.
The G7 comprises Britain, Canada, France, Germany, Italy, Japan, and the United States. The bloc's financial leaders have gathered in India's Bengaluru ahead of a meeting of financial chiefs of the Group of 20 (G20) nations.
1.30pm: London's movers
A quick glance at some of London's risers and fallers.
Risers
John Wood- up 29% to 200p
Shares in John Wood surged after the company said that it had rebuffed bid approaches from Apollo Global Management (NYSE:APO).
The FTSE-250 company said it had turned down all unsolicited proposals from the US firm, with the most recent approach in late January valuing it at £1.59bn. The cash offer for all of its shares was worth 230p each.
Ascent- up 3.1% to 3.7p
Ascent Resources' shares moved higher in Thursday’s early deals after the company announced a new partnership with Beryl International, which sees the pair of companies seek and pursue opportunities in Latin America and Africa.
Targeted projects are expected to have relatively low geological risk and the opportunity of being near-term cash generative, with profitability possible in the first year of operations.
System1- up 7.8% to 178p
Shares in market research company System1 rallied after it issued a trading update that showed record revenue growth in its Data business.
In the third quarter to 31 December 2022, Data revenue grew 18% year-on-year to £3.4mln, a quarterly record and representing 55% of third-quarter revenue, System1 said.
Fallers:
Mondi- down 4.7% to 1,408p
Mondi’s shares dropped as it warned that it continues to see softer demand and pricing, despite input costs declining as it reported full-year 2022 profits that more than doubled on higher prices.
The FTSE 100-listed paper and packaging group posted a 119% jump in pre-tax profit before tax to €1.56bn for the year ended 31 December 2022, as revenue excluding Russian operations surged by 28% to €9bn.
The FTSE 100 was down 14 points to 7,916.
1.00pm: US open
US stocks are expected to push higher at the open on Thursday following a mixed showing in the previous session after the release of minutes from the last Federal Reserve meeting indicated US interest rates would stay higher for longer, at least providing some clarity on policy.
Futures tied to the Dow Jones Industrial Average (DJIA) added 54 points or 0.2% at 33,133, while those for the S&P 500 gained 0.4%, and contracts for the Nasdaq-100 rose 0.8%.
On Wednesday, the DJIA closed 84.50 points, or 0.3% lower at 33,045, while the S&P 500 fell 0.2%, but the Nasdaq Composite rose 0.1%.
Minutes from the most recent Federal Open Market Committee (FOMC) meeting, which concluded on February 1, showed that members of the central bank are resolved to keep fighting inflation with rate hikes.
Inflation “remained well above” the Fed’s 2% target and the labor market “remained very tight, contributing to continuing upward pressures on wages and prices,” according to the minutes.
James Hughes, Global Head of Brand for Scopemarkets commented: "Yesterday’s FOMC meeting minutes confirmed investors worst fears that the rate hike crusade would be continuing for a while longer yet, news that has arguably served to draw a line under Wall Street’s latest sell-off.
"Right now, markets appear to be welcoming this clarity with futures indicating a positive start on Thursday whilst some glimmers of optimism in last night’s after-hours earnings news also offered further cause for cheer."
"Economic data is relatively thin on the ground today with a flurry of updates dominating the agenda and we’re getting towards the tail end of earnings season, although numbers from Moderna and Liberty Global (NASDAQ:LBTYA) both have the ability to be something of standouts at either end of the session," he added.
In economic data, the latest GDP and weekly jobless claims data are both scheduled to be released at 8.30am ET on Thursday.
Additionally, Atlanta Fed President Raphael Bostic will speak at an event hosted by the Atlanta Fed on Thursday morning, while San Francisco Fed President Mary Daly will take part in a fireside chat in the afternoon.
On the corporate front, Nasdaq futures got a boost from chip firm Nvidia, which rose more than 8% pre-market following better-than-expected fourth-quarter earnings and revenue released after-hours on Wednesday.
A big batch of earnings reports are due out on Thursday including from Alibaba, Papa John’s, Wayfair and Bath & Body Works, while after the bell this afternoon, investors will hear from Beyond Meat, Block, Warner Bros. Discovery and Carvana, among others.
12.39pm: Gates buys beer
Bill Gates acquired a 3.7% stake in Heineken according to filings by the Netherlands’ Financial Markets Authority.
The Microsoft founder purchased the shares from Mexico’s FEMSA, which is reportedly selling out of the brewing company.
Gates purchased 10.8mln shares worth roughly US$939.87mln based on current market prices.
12.15pm: Food shortages to last a month
The UK’s food shortage could last up to a month, according to Thérèse Coffey, secretary of state for the Department for Environment, Food & Rural Affairs (DEFRA).
Speaking in parliament, Coffey said UK supermarkets have restricted supplies to ensure all households have access to different fruits and vegetables.
Coffey blames unseasonal weather overseas for the shortage, and stressed it's “important that we try and make sure we get different sourcing options.”
Former Sainsbury’s chief executive Justin King warned that UK farming had been significantly impacted by Brexit.
Conservative MP Desmond Swayne takes a different view, however, joking if he had known Brexit would cause frost in Morocco, he would have voted differently.
Sainsbury's and Tesco were little changed on the FTSE 100 index, which clawed back some early losses and is only down 18 points to to 7,911.
11.45am: Scottish Mortage moves higher with Footsie down
Scottish Mortgage Investment Trust jumped 1% to 717p after chip giant Nvidia brought some relief to the tech sector.
The investment trust has 2% of its holding in Nvidia, which beat market expectations with its quarterly and full-year results.
Listed on NASDAQ in the US, revenues for the fourth quarter came in just ahead of expectations at US$6.05bn, of which US$1.4bn was profit.
For the year, it raked in revenue of US$26.92bn, in line with the previous fiscal year, although profit was down 55%.
Nvidia said it is increasingly optimistic about artificial intelligence, helped by ChatGPT.
“Nvidia’s involvement in the AI space now puts it directly under the spotlight which means there could be strong demand for the shares, explaining why there has been a positive market reaction to its latest results alongside the earnings beat,” said Russ Mould, investment director at AJ Bell.
Shares in Nvidia are expected to open 9% higher at US$255.99.
11.13am: Natural gas falls in Europe
Natural gas prices in Europe continued their downward trend, with Dutch front-month natural gas futures trading below €50 per megawatt hour.
The European benchmark is more than 85% below record levels of €350 hit in August last year with spring lurking around the corner.
An unusually warm winter allowed stockpiles to remain above normal levels and, looking ahead, investors will be monitoring how the EU prepares for next winter, when the fall in prices could boost demand in the industrial and power sectors.
British Gas owner Centrica was down 0.8% to 102p in morning trading, compared to the FTSE 100 index which was down 0.38%.
10.47am: More interest rate hikes coming
Bank of England policymaker Catherine Mann has doubled down on interest rates and warned more will be needed to control inflation.
Current consumer price inflation remains at four-decade highs of 10.1%, with Mann arguing that, should it seep into wages, could result in an extended persistence of inflation.
Speaking at the Resolution Foundation in London, Mann argued the UK risks falling in between the combination of hight prices and low growth.
Since December 2021, the BoE has bumped interest rates from 0.1% to 4%, with markets expecting interest to hit at least 4.5%.
FTSE 100 was is down 42 points to 7,889.
10.19am: Crude oil falls
WTI crude futures traded near US$74 on Thursday after losing more than 3% in the previous session, coming under pressure following the latest FOMC minutes from the Federal Reserve.
FOMC minutes showed that policymakers are steadfast in raising interest rates to claw back in inflation.
Industry data, according to training economics, also showed that US crude inventories jumped by 9.9mln barrels last week, smashing expectations of a 1.2mln barrel increase.
On top of that, market participants expect China’s oil imports to hit a record high in 2023 amid rising demand for transportation fuel and as new refineries come online.
Image source: Trading economics
FTSE 100 remained down, with heavyweight oilers Shell and BP little changed.
9.52am: A quick recap on Footsie
A glance at some of the stories making the headlines today.
The latest twist in the Royal Mail saga sees chief executive Simon Thompson backtracking on a previous pledge. Speaking to a parliamentary committee, Thompson confirmed postal workers were tracked and had speeds recorded.
High-street lender Lloyds said it is launching its share buyback today, which will be executed by UBS. The bank will be putting £2bn into its shareholder's pockets.
Rolls-Royce took off in 2022, with the aeroplane engine manufacturer reporting a 37% increase in profits. The group predicts further advances in 2023 as recovery in international travel continues.
Among some of the small caps, and PYX Resources said it has received a ten-year extension to its Tisma mineral sands project in Kalimantan, Indonesia. The license now runs until July 2032.
9.25am: Losses narrow at Heathrow
Heathrow Airport has reported narrowed underlying losses in 2022 amid a bounce back in travel demand, but said results were weighed on by surging cost pressures and lower-than-expected passenger numbers.
The group reported an underlying pre-tax loss of £684mln for last year, against a loss of £1.27bn in 2021.
It said no dividends were paid in 2022 and none are planned for 2023 as it continues to rebuild after the industry was battered by pandemic travel restrictions.
The figures also come after last summer's major disruption for airports such as Heathrow as the aviation sector struggled to cope with staff shortages and travellers were met with sudden flight cancellations and severe delays.
Passenger numbers trebled to 61.6mln, up by 42.2mln on a Covid-impacted 2021, but were still down 24% from record year 2019, when Heathrow booked 80.9mln passengers.
9.00am: FTSE weaker but Rolls-Royce soars
London’s blue chips remained weaker in early trading with ex-dividends weighing along with concerns that US interest rates are set to rise further following the release of the FOMC minutes on Wednesday.
At 9.00am the FTSE 100 was at 7,905.98, down 24.65, or 0.31% although the FTSE 250 jumped to 19,855.01, up 174.72 points, or 0.89%.
Susannah Streeter, head of money and markets, Hargreaves Lansdown said, "’Investors are finding it hard to shake off the funk that’s descended over the prospect of interest rates going higher and hanging around for longer. There were few crumbs of comfort from the closely watched minutes of the US Federal Open Markets Committee, with the determination of policymakers to stay tough on inflation clear."
Neil Wilson at markets.com commented, “5% for one year. No wonder stocks are under pressure when the 1yr Treasury note yields more than 5.1%, its highest in 22 years. FOMC minutes signalled more rate hikes – and remember those minutes were before the hot data that hit the bull rally in recent days.”
“I think it’s noteworthy that the minutes showed members are worried about the easing of financial conditions that has taken place and warned that inflation was still way too high, at the same time as Jay Powell said financial conditions had tightened and declared disinflation was now the order of the day. It’s all very higher for longer.”
Wilson warned, “It can’t go on forever – American consumers are loading up on debt rather than cutting back, only making problems worse when it does all burst – an even bigger and more damaging recession could be on the way.”
But there was better news on the corporate front. Rolls-Royce Holdings PLC (LSE:RR.) soared 20% after results which beat expectations.
Shore Capital said the results, “show good progress towards improved profitability with Civil Aerospace performing better than expected.”
“Management has updated its guidance to reflect a more optimistic outlook; we expect a small uplift in our EPS forecasts. The investment case remains intact with Rolls-Royce representing a compelling turnaround story.”
Sales of £12.7bn and EBIT of £0.7bn topped Shore’s expectations of £11.7bn and £0.5bn respectively while guidance for 2023 implies upgrades of at least 6% to financial year 2023 EBIT forecasts, analysts at Shore commented.
“Further positive news is that Defence order intake was £5.4bn in 2022, over double the previous year, providing early signs that Defence markets are enjoying elevated demand for products and services as geopolitical uncertainty continues.”
Victoria Scholar, Head of Investment, interactive investor commented, "Investors have fallen out of favour with Rolls-Royce in recent years given its bumpy ride with shares shedding more than 60% over the past five years. However that could be set to change with the CEO shake-up potentially reinvigorating the bull case if he can spearhead a much-needed drastic overhaul."
WPP PLC (LSE:WPP) sat in second spot in the FTSE 100 risers list. Net revenue rose 6.9% to £11.8bn on a like-for-like (LFL) basis, which excludes the impact of acquisitions and exchange rates. Growth was helped by a return to more normal global marketing spending.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown commented, “WPP is a titan of industry. Its sheer size means gaining momentum and getting into shape is a huge challenge, but it’s one the company has risen to.”
“The largest concern for investors was how successful WPP will be in realising its cost efficiencies, with £600m due to be found by 2025. The fact this target remains in focus and on track is a genuine relief.”
“As a media giant, WPP has been stung by a global slowdown in marketing spending brought on by enormous geopolitical and economic stress.”
“By all accounts this looks to be reversing, which has fed into strong growth at the end of the year. To top it off, momentum hasn’t only been achieved, it’s being harnessed, and revenue growth of 3 -5% is expected this year.”
“Investors have been well-rewarded in the form of a hefty share buyback programme, which will go some way to diluting concerns over an over-laden balance sheet.”
Shares rose 5.6% to 1074.50p.
International Consolidated Airlines Group SA (LSE:IAG) rose 3.2% taking from heart from comments from Rolls-Royce that flying hours are set to increase strongly in 2023 as the recovery in international travel continues.
Lloyds Banking Group PLC (LSE:LLOY) rose 1.5% on further consideration of its full-year results and as it kicked off its £2bn share buy-back.
But packing firm Mondi 6% and Drax PLC dropped after their trading updates.
8.15am: FTSE falls but Rolls-Royce soars
The FTSE 100 started Thursday on the backfoot as a number of index heavyweights went ex-dividend and after the latest FOMC minutes signalled the Fed remains steadfast in its determination to reduce inflation in the US.
At 8.15am London's lead index was down 20.80 points, or 0.26%, at 7,909.83 but the broader FTSE 250 advanced to 19,760.20, up 79.91 points, or 0.41%.
AstraZeneca, Barclays, Endeavour Mining, GSK, Land Securities, Standard Chartered, Unilever have all gone ex-dividends which is estimated to reduce the blue chip index by around 20.62 points.
"They confirmed that the Federal Reserve officials are indeed not lying when they say that they will continue hiking the interest rates to tame inflation toward the 2% mark," said Swissquote Bank's Ipek Ozkardeskaya of the latest Federal Open Market Committee minutes.
Although the 25 basis point rate hike was agreed upon, the minutes showed a "few" members of the Federal Open Market Committee said they wanted a half-point, or 50-basis-point, hike that would show even greater resolve to get inflation down.
Back in London and investors were also digesting results from some leading names in UK business.
Shares in Rolls-Royce powered ahead by 12.4% as the engineer reported strong growth in revenue and profits and predicted further advances in 2023 as the recovery in international travel continues.
The FTSE 100-listed firm reported underlying revenue of £12.69bn in the 12 months to 31 December 2022, up from £10.95bn in 2021, while underlying operating profit increased to £652mln compared to £414mln a year ago.
Looking ahead, Rolls-Royce forecast operating profit between £0.8bn to £1bn in 2023 with free cash flow of £0.6bn to £0.8bn. The firm has also embarked on a transformation programme and strategic review.
Chief executive Tufan Erginbilgic said, “Our transformation programme is already underway and is moving at pace. It will include a strategic review so that we can prioritise our investment towards the most profitable opportunities.”
“We will report the findings together with our medium-term goals in the second half of this year."
Joshua Warner, City Index analyst said the company “blew past” estimates.
“The early results from the turnaround plan and honest language from Erginbilgic should give Rolls Royce investors confidence that this will be a significant shake-up of the 117-year-old company, which has limped from one restructuring to the next over recent decades.”
But BAE Systems PLC (LSE:BA.) slipped back despite reporting sales in the year to December 31 grew 4.4% to £23.3bn and underlying earnings per share were up 9.5% at 55.5p. BAE lifted its dividend per share by 7.6% to 27p.
The defence firm said the order intake rose to £37.1bn in 2022 from £21.5bn a year earlier, while the order backlog increased to £58.9bn from £44bn.
Shares were 1.7% lower in early exchanges.
But shares in John Wood Group PLC soared 31% to 202p after the company said after the market close Wednesday that it had rebuffed bid approaches from Apollo Global Management (NYSE:APO) (Apollo Global Management (NYSE:APO)).
The FTSE-250 company said that it had turned down all unsolicited proposals from the US firm, with the most recent approach in late January valuing it at £1.59bn. The cash offer for all of its shares was worth 230p each.
The company said: “The board carefully considered each of the proposals, together with its financial advisers, and has engaged on a limited basis with Apollo. The board unanimously rejected each of the proposals, having concluded that they each significantly undervalued the repositioned group’s prospects.”
7.56am: BAE Systems sales grow, order book strong
BAE Systems PLC (LSE:BA.) is another FTSE 100 heavyweight reporting results today.
Sales in the year to December 31 grew 4.4% to £23.3bn and underlying earnings per share were up 9.5% at 55.5p. BAE lifted its dividend per share by 7.6% to 27p.
The defence firm said the order intake rose to £37.1bn in 2022 from £21.5bn a year earlier, while the order backlog increased to £58.9bn from £44bn.
Chief Executive Charles Woodburn said: "Our record orders and financial performance give us confidence in delivering long-term growth and to continue investing in new technologies, facilities and thousands of highly skilled jobs, whilst increasing shareholder returns."
In 2023 it expects sales growth of between 3% to 5%, a rise underlying EBIT of between 4% to 6% and EPS to advance between 5% to 7%.
7.45am: John Wood rejects bid approaches
The Aberdeen-based energy services and consulting firm John Wood Group will be an early focus after it said it had rejected three takeover approaches from Apollo Global Management (NYSE:APO).
The FTSE-250 company said in a stock market filing after the market close Wednesday that it had rebuffed all unsolicited proposals from the US firm, with the most recent approach in late January valuing it at £1.59bn. The cash offer for all of its shares was worth 230p each.
The company said: “The board carefully considered each of the proposals, together with its financial advisers, and has engaged on a limited basis with Apollo. The board unanimously rejected each of the proposals, having concluded that they each significantly undervalued the repositioned group’s prospects.”
Shares in the company closed at 148.12p on Wednesday.
7.33am: Profits power ahead at Rolls-Royce
Rolls Royce Holdings PLC powered ahead in 2022 with strong growth in revenue and profits and predicted more growth in 2023 as the recovery in international travel continues.
The FTSE 100-listed firm reported underlying Revenue of £12.69bn in the 12 months to December 31, up from £10.95bn in 2021, while underlying operating profit increased to £652mln compared to £414mln a year ago.
Operating margin improved to 5.1% from 3.8%, earnings per share rose to 1.95p against 0.11p while pre-tax profits also advanced to £206mln from £36mln.
The engineer said revenues rose as demand rebounded with large engine flying hours in Civil Aerospace up 35% year on year as recovery in international travel continued.
Operating profit was driven by higher profits in Civil Aerospace and Power Systems, partly offset by lower profit in Defence and increased investment in new markets.
The higher margin versus the prior year was driven by improvements in long-term service agreement contract margins and increased spare engines profit in Civil Aerospace.
Free cash flow from continuing operations improved from an outflow of £1.5bn in 2021 to an inflow of £0.5bn in 2022, driven by 35% growth in large engine flying hours, comparatively lower growth in large engine major shop visits at 19%, and higher Defence cash flow.
The improved cash flow position helped drive a hefty reduction in net debt from £5.2bn to £3.3bn, also aided by disposals.
Looking ahead and Rolls-Royce forecast operating profit between £0.8bn to £1bn in 2023 with free cash flow of £0.6bn to £0.8bn. The guidance assumes £100mln to £200mln of targeted contract improvements and large engine flying hours at 80-90% of 2019's level and 1,200-1,300 total shop visits.
The firm has also embarked on a transformation programme and strategic review.
Chief Executive Tufan Erginbilgic said, “Our transformation programme is already underway and is moving at pace. It will include a strategic review so that we can prioritise our investment towards the most profitable opportunities. We will report the findings together with our medium-term goals in the second half of this year."
No dividend was paid.
7.00am: Ex-divs to weigh on Footsie
FTSE 100 is expected to extend yesterday’s losses at the open after the minutes from the Federal Open Market Committee meeting signalled no let up in the Fed’s push to tame inflation suggesting more rate rises are to come.
A number of index heavyweights, including AstraZeneca, Barclays, Endeavour Mining, GSK, Land Securities, Standard Chartered, Unilever go ex-dividends which will also weigh on the Footsie reducing the FTSE 100 by 20.62 points.
Spread betting companies are calling London’s lead index down by around 12 points.
Ipek Ozkardeskaya senior analyst at Swissquote Bank described the minutes as “hawkish.”
“They confirmed that the Federal Reserve (Fed) officials are indeed not lying when they say that they will continue hiking the interest rates to tame inflation toward the 2% mark.”
“And the minutes show that they reckon it will take ‘some time’. “
“How much time? We don’t know. Even they don’t know. But we know that the job is not done yet, and the next meeting’s 25bp increase won’t be the last one. “
“We also know that most officials remain favourable for small increases – for longer. But some think that a 50bp hike would be appropriate. The odds for a 50bp hike for the March FOMC meeting now climbed to 24%.”
US markets ended mixed with the Dow was down 85 points, or 0.3%, to 33,045, the Nasdaq Composite gained 15 points, 0.1%, to 11,507 and the S&P 500 lost 6 points at 3,991.
Inflation remained “well above” the Fed’s 2% target, according to the minutes, even amid signs that inflation is declining.
“Inflation data received over the past three months showed a welcome reduction in the monthly pace of price increases but stressed that substantially more evidence of progress across a broader range of prices would be required to be confident that inflation was on a sustained downward path," the minutes said.
Meanwhile, the labor market remains “very tight, contributing to continuing upward pressures on wages and prices.”
Back in London and a busy day of results sees BAE Systems, Drax, Rolls-Royce, Serco and Anglo American among those reporting numbers.