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Summary
- FTSE 100 trades in red ahead of the Bank of England policy meeting.
- As per the market expectation, the Bank of England is not likely to make major policy changes, but investors will keep an eye on inflation forecast by the central bank.
FTSE 100 continues to trade cautiously in a range today ahead of the Bank of England’s policy meeting outcome. The blue-chip index is supported by the gain in the Aerospace engine maker Rolls-Royce Holdings Plc, which is up by 5.15% today, after reporting higher profits in its half-yearly result. While the Mid-cap focused, FTSE250 was up by 0.34% at 23,426 levels.
Bank of England is not expected to make any policy changes as per market participants. The central bank will maintain the Bank rate at 0.1% and quantitative easing (QE) at £875 billion. Also, investors will keep an eye on the monetary policy committee forecast on inflation and the expected timeline of the interest rate hike.
European Markets
Major European market indexes are range-bound as well. German blue-chip DAX index is marginally down by 0.01% at 15688, while the CAC 40, benchmark index of France was at 6,764, up by 0.28%. Many German-based consumer brands and companies have upgraded their full-year revenue guidance. Companies like Adidas, engineering group Siemens anticipate higher sales and profit margins due to increased consumer spending and revival of economic activities after lockdown.
Currency Markets
The pound trades higher against the dollar at 1.3929, up by 0.30%; the forex market is expected to remain range bound as investors await the outcome and commentary of the Bank of England’s policy meeting. The pound in recent times has turned strong against the US dollar and rebounded from multi-month lows. The EUR/ GBP currency pair traded at 0.8517, down by 0.02%.
Commodities
WTI crude oil future contract traded below the USD 70 mark at USD 68.19, while the Brent crude oil October futures trades at USD 70.44, marginally up by 0.09%. The crude oil price is down as investors expect lower crude oil demand because of the recent rise in Covid-19 cases in the US and China. Covid-19 cases in the US hit six months high as more than 100,000 cases were reported on Wednesday, while China has imposed fresh restrictions in some cities.
Gold August futures contract trades in the positive zone, up by 0.14% at USD 1817 per ounce.
Asian Markets
Major Asia Pacific indexes ended mixed. India’s Nifty 50 closed at 16,294, up by 0.22%. Nikkei 225 of Japan also closed in the green, up by 0.52% at 27,728, while Hong Kong’s Hang Seng index closed in red, down by 0.84% at 26,204. Australia’s ASX200 closed at 7,511, up by 0.11%, while Shanghai Composite of China closed in red, down by 0.31% at 3,466.
