(Sharecast News) - London stocks were still in the red by midday on Wednesday as investors mulled the latest policy decision from the Bank of Japan and looked ahead to an announcement from the Federal Reserve.
The FTSE 100 was down 0.3% at 8,682.78.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Caution is set to be the name of the game today as investors assess crunch central bank decisions on interest rates amid global tariff turmoil. After gains yesterday, London's FTSE 100 is on the back foot in early trade as a wait-and-see mood swirls. But overall, the more positive sentiment towards UK and other European stocks is expected to continue while equity investors seek safer havens as Trump rips up international agreements and shreds relations with formerly steadfast trading partners.
"Nervousness pulsing through Wall Street looks set to bed in, as investors fret about the prospects of the US entering recession, amid unpredictable policymaking from the White House. After another shift lower on Tuesday, the S&P 500 is set to open flat, amid high caution ahead of the crunch central bank decision. The Fed is widely expected to keep interest rates on hold, but investors will be hanging on Jerome Powell's words about future rate cuts.
"The tide has turned, with even the prospect of lowering borrowing costs unlikely to provide much solace given that they would be seen as indicating increasing weakness in the US economy. Nevertheless, a more neutral tone from the Fed chair might be a stabilising force, given the falls of recent weeks."
Earlier, the Bank of Japan maintained its key policy rate steady at 0.5%, as expected. The decision was reached unanimously at a two-day policy meeting.
The BoJ said in a statement: "Concerning risks to the outlook, there remain high uncertainties surrounding Japan's economic activity and prices, including the evolving situation regarding trade and other policies in each jurisdiction and developments in overseas economic activity and prices under such situation, developments in commodity prices, and domestic firms' wage- and price-setting behaviour.
"Under these circumstances, it is necessary to pay due attention to developments in financial and foreign exchange markets and their impact on Japan's economic activity and prices. In particular, with firms' behaviour shifting more toward raising wages and prices recently, exchange rate developments are, compared to the past, more likely to affect prices."
Danske Bank said: "They highlighted that exchange rate developments are, compared to the past, more likely to affect prices.
"The market reaction to the decision was muted. With the outlook for another significant wage bump this year, we anticipate the BoJ will find room to hike rates again in July."
In equity markets, savings and investments firm M&G jumped to the top of the FTSE 100 as it beat analysts' forecasts with its 2023 results, with net client flows, adjusted profits and operating capital generation all up materially on the previous year.
Softcat surged as it lifted expectations for 2025 operating profit growth after interim earnings jumped by 12%.
On the downside, catering firm Compass Group tumbled after a downgrade to 'underperform' from 'outperform' by BNP Paribas Exane.
Iron ore producer Ferrexpo was under the cosh after it accused Ukraine of breaching international investment agreements.
The update came as Ferrexpo posted full-year results. It said it had seen a "dramatic" recovery in 2024, with total production surging 66% to 6.9m tonnes and revenues ahead 43% at $933.3m. However, lower average iron ore prices and higher production costs meant underlying earnings before interest, tax, depreciation and amortisation fell 30% to $69m. The pre-tax loss was $20.4m, although that an improvement on 2023's $68.4m.
Essentra was weaker as it said its FY24 performance was in line with previous guidance and market expectations, but that it was "taking a cautious view" on the timing of any material improvement in end-market conditions.
Market Movers
FTSE 100 (UKX) 8,682.78 -0.26%
FTSE 250 (MCX) 20,069.49 -0.14%
techMARK (TASX) 4,761.19 -0.38%
FTSE 100 - Risers
M&G (MNG) 228.30p 3.21%
Games Workshop Group (GAW) 14,490.00p 1.76%
Pershing Square Holdings Ltd NPV (PSH) 3,718.00p 1.31%
Melrose Industries (MRO) 536.60p 1.25%
Informa (INF) 779.00p 1.22%
Shell (SHEL) 2,724.00p 1.04%
Mondi (MNDI) 1,262.00p 1.00%
Whitbread (WTB) 2,591.00p 0.97%
Pearson (PSON) 1,263.50p 0.88%
Hikma Pharmaceuticals (HIK) 2,076.00p 0.87%
FTSE 100 - Fallers
Compass Group (CPG) 2,521.00p -3.96%
Fresnillo (FRES) 937.50p -1.73%
Schroders (SDR) 380.00p -1.71%
GSK (GSK) 1,506.00p -1.67%
Tesco (TSCO) 320.70p -1.66%
Next (NXT) 9,672.00p -1.57%
Marks & Spencer Group (MKS) 327.10p -1.54%
Sainsbury (J) (SBRY) 232.80p -1.52%
Diageo (DGE) 2,049.00p -1.49%
Glencore (GLEN) 314.45p -1.46%
FTSE 250 - Risers
Softcat (SCT) 1,832.00p 12.88%
GCP Infrastructure Investments Ltd (GCP) 79.80p 4.59%
Bridgepoint Group (Reg S) (BPT) 332.20p 3.55%
Savills (SVS) 973.00p 3.51%
Computacenter (CCC) 2,656.00p 2.55%
Kainos Group (KNOS) 739.00p 1.79%
Deliveroo Class (ROO) 123.20p 1.73%
Marshalls (MSLH) 243.00p 1.67%
Renishaw (RSW) 2,785.00p 1.64%
Hill and Smith (HILS) 1,938.00p 1.25%
FTSE 250 - Fallers
Ferrexpo (FXPO) 72.90p -10.66%
Trustpilot Group (TRST) 231.50p -6.65%
Essentra (ESNT) 110.00p -4.84%
Wizz Air Holdings (WIZZ) 1,698.00p -4.39%
QinetiQ Group (QQ.) 379.20p -4.10%
Ithaca Energy (ITH) 132.90p -3.13%
Oxford Nanopore Technologies (ONT) 111.60p -2.96%
Energean (ENOG) 852.00p -2.80%
Helios Towers (HTWS) 103.80p -2.44%
Hochschild Mining (HOC) 244.50p -2.40%
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