FTSE 100 Live: ECB rates set for big rise, energy bill plan awaited


FTSE 100 rallies, Darktrace down 30%

Last night’s rebound for US markets has set the tone for an improved session in London, with the FTSE 100 index up 30.74 points at 7268.57 and the FTSE 250 index 67.13 points higher at 18,878.61.

The improved sentiment comes with the Brent crude price now at $88 a barrel, boosting hopes that the Federal Reserve might be able to ease the pace of interest rate hikes.

Hargreaves Lansdown senior analyst Susannah Streeter said: “Although the Fed’s next moves may be hard and fast, there are signs that inflationary pressures may be easing more quickly, which would mean higher rates won’t linger for longer.”

The biggest risers in the FTSE 100 index included warehouse technology business Ocado, which improved 6.2p to 740p, while catering giant Compass added 18p to 1885p.

In the FTSE 250, Darktrace shares lost 30% of their value after private equity firm Thoma Bravo said it was no longer interested in bidding for the cyber security specialist. The stock returned to where it was in mid-August, falling 154.4p to 360.4p.


Primark costs warning hits ABF shares

Shares in Associated British Foods have fallen 8% after the FTSE 100-listed conglomerate highlighted the impact of a strong dollar on costs in its Primark retail division.

In addition, the squeeze on disposable consumer incomes means it is not planning to implement further price increases next year beyond those already actioned.

With Primark margins set to be weaker in the year ahead, ABF’s shares fell 123p to 1332p. The company’s operations also span sugar, ingredients and grocery brands including Twinings Ovaltine.

Other retail stocks under pressure after the Primark update included Marks & Spencer, which dropped 3%, and Next after a decline of 210p to 5838p.


US markets boost sentiment, ECB rates decision

The best session for US shares since mid-August means the FTSE 100 index and other European markets are poised to open higher today.

The tech-focused Nasdaq led the way by ending a run of seven negative sessions with a 2% improvement, while the S&P 500 index added 1.8% and Dow Jones Industrial Average rose 1.4%.

CMC Markets expects the FTSE 100, which finished lower yesterday on weakness for energy and commodity stocks, to improve 23 points at 7260.

The Dax in Frankfurt is forecast to add 76 points to 12,992 but with the focus on whether the European Central Bank will raise interest rates by 0.5% or 0.75% later today.

MIchael Hewson, CMC’s chief market analyst, said: “Whatever decision is made today, ECB President Christine Lagarde will need to ensure that her messaging is clear.”

A weaker US dollar overnight meant the pound recovered from the 37-year low of just above $1.14 yesterday to stand above $1.15 today as attention turns to how new prime minister Liz Truss intends to fund her energy bill support package.

Deutsche Bank yesterday estimated the cost at £200 billion, which is half the sum spent during the pandemic and equivalent to 8% of GDP.

Brent crude stood at $88 a barrel today, having fallen 5% yesterday on the weaker demand outlook after China reported disappointing trade figures.

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