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London Stocks Open Lower as Fed Signals Longer Interest Rates, Bank of England Decision Awaited

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London stocks opened lower on Thursday as U.S. Treasury yields rose following the Federal Reserve’s indication of elevated interest rates for a longer period. Investors are also preparing for the Bank of England’s announcement on monetary policy later in the day.

The FTSE 100 index, which represents the UK’s blue-chip stocks, was down by 0.5% as of 0710 GMT. Meanwhile, mid-cap stocks experienced a slight dip of 0.4%.

On Wednesday, the Federal Reserve decided to keep interest rates unchanged but adopted a more hawkish approach to combatting inflation. This change in stance affected Asian stocks, which mirrored the subdued sentiment felt by their U.S. counterparts after the Fed released its revised economic projections.

Today, the Bank of England will reveal whether it will halt a series of interest rate hikes that began in December 2021. The decision is highly anticipated by investors and could have significant implications for the UK economy.

The FTSE 100’s performance was further impacted by a 1.4% decline in industrial miners as the prices of metals denominated in U.S. dollars decreased due to a stronger dollar.

Several companies experienced declines in their stock prices as they traded ex-dividend. This included trading platform IG Group, as well as homebuilders Crest Nicholson and Redrow, which saw their shares drop by 3% to 5%.

However, clothing retailer Next saw a 1.3% increase in its stock price after raising its full-year profit outlook for the third time in four months. This positive news boosted investor confidence in the company.

Another notable gainer was JD Sports Fashion, which climbed nearly 6% to become the top performer in the FTSE 100. The sportswear retailer forecasted a higher annual profit, leading to increased interest from investors.

The retail sector as a whole experienced gains, with the broader retailers’ index jumping by nearly 1%.

Investors will continue to monitor the Bank of England’s decision on interest rates, as well as any further developments that could impact the UK stock market.

More detail via Investing.com UK here… ( Image via Investing.com UK )

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