Pound rises on upbeat UK interest rate expectations

The pound enjoyed a surprise rally as one member of the Bank of England’s Monetary Policy Committee voted to raise interest rates.

Despite this, the interest rate was kept at the historic low of 0.25%.

Telecommunications group Vodafone (VOD) sparked 2% higher on media reports that it restarted merger talks with Liberty Global, which owns Virgin Media.

Sterling strengthened by 0.5% against both the dollar and the euro, the former of which pushed up commodity prices.

Miner Antofagasta (ANTO) and Mexico’s second biggest gold producer Fresnillo (FRES) climbed 4.7% and 3.9% respectively.

West Texas Intermediate and Brent crude oil nudged lower to $48.63 and $51.67 respectively.

Gold increased by 2.4% to $1,229 per ounce and copper was up 0.7% to $5,864 per tonne.

OVERSEAS MARKETS

On Wall Street, the markets eased on Thursday after initial excitement from the interest rate hike on Wednesday.

In Hong Kong, the Hang Seng gained 2% on Thursday after the country raised its own interest rate, while other markets in Asia shrugged off the widely expected US rate rise.

FTSE 100 RISERS AND FALLERS

Supermarket giant Sainsbury’s (SBRY) was flat on a disappointing fourth quarter trading statement. The results revealed like-for-like retail sales declined 0.5% in its supermarkets business in the nine weeks to 11 March, a setback after a 0.1% rise in the third and Christmas quarters.

CEO Mike Coupe’s acquisition catalogue brand Argos delivered strong results as like-for-like sales rose 4.3%, boosted by strong mobile phone, wearable technology and video game sales.

Legoland operator Merlin Entertainment (MERL) fell 2.3% as Berenberg changed its recommendation from ‘hold’ to ‘sell.’

Miner Anglo American (AAL) sparked 8.7% after Volcan Investments took a 12% stake in the company, worth $2.4bn, on Wednesday.

FTSE 250 RISERS AND FALLERS

Specialist lender OneSavings Bank (OSB) failed to rally despite full year results revealing underlying pre-tax profits of £137m. This represented 29% year-on-year growth, which was 6% ahead of the consensus of analysts’ estimates.

Public services provider Serco (SRP) was the preferred bidder to run the New Grafton Correctional Centre in Australia, causing the shares to rise 1.2%. It was announced that the deal is for 20 years from 2020 and worth £1.6bn.

SMALL CAP RISERS AND FALLERS

Online gaming business PCG Entertainment (PCGE) served notice on Wednesday to terminate its contract with Electric Warrior, a consultancy company that provides CEO Nick Byrant’s services to the company. It also removed Byrant as CEO, which unnerved the market and resulted in a 24.9% drop in the stock.

Nyota Minerals (NYO) terminated the acquisition of Bigdish Ventures ‘by mutual consent’ and its loan of £200,000 from Bigdish will be repaid. Approximately a third of Nyota’s value was wiped off as investors ran for the exit.

Nyota wasn’t the only one to ditch deals as the UK’s largest machine tool firm 600 Holdings (SIXH) was notified by Haddeo Partners that discussions with Disruptive Capital Investment were terminated. The stock plummeted 13.5%.

Capital Drilling (CAPD) remained in the red for 2016, despite a return to top line growth amid improving conditions in the gold sector. A dividend cut and news Capital Drilling will invest up to $3.8m for a 50% stake in laboratory testing services firm A2 weighed on investor sentiment and dragged the stock 2.8% lower.

Driver monitoring system designer Seeing Machines (SEE) unveiled a swing to heavy losses in its half year results. Management said it was a transitional year involving heavy investment in its technology platform and slower-than-expected sales in the fleet market. The stock was marked 13.8% lower on the news.

Story provided by StockMarketWire.com