Market overview: BoE and ECB keep rates steady


LONDON (ShareCast) - 1245: The European Central Bank (ECB) has maintained its benchmark rate steady, at 0.75%.

1200: The Bank of England's Monetary Policy Committee (MPC (KOSDAQ: 050540.KQ - news) ) has today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5 per cent. The Committee also voted to continue with its programme of asset purchases totalling 375bn pounds, financed by the issuance of central bank reserves.

1058: As well as the policy decisions from the BoE and ECB due out in the coming hours, markets will be keeping a close eye on weekly jobless claims figures from the US out before the market open in New York (Frankfurt: A0DKRK - news) (around 13:30 London time). Consensus estimates are for claims to rise to 370k last week from 359k the week before. US stock futures are pointing to gains when Wall Street opens. The FTSE 100 is down 14 points at 5,812.

1029: BHP Billition is among the companies talking to Petrobras (Madrid: XPBR.MC - news) about buying a stake in its's Gulf of Mexico oilfields, the Wall Street Journal reported on Wednesday, citing people familiar with the matter. Also worth taking into account, analysts at Morgan Stanley (EUREX: DWDF.EX - news) have lowered their price target on the company's shares to 2100p from 2180p.

1020: After a bright start, the Footsie (FTSE: ^FTSE - news) is now firmly in negative territory, down 20 points at 5,806 ahead of the rate decisions from the BoE and ECB. FirstGroup (Other OTC: FGROF.PK - news) is continuing to trade in the red following yesterday's near-20 per cent tumble after the Department for Transport (Euronext: IXSTP.NX - news) cancelled the decision to award the group the West Coast rail franchise. UBS (NYSEArca: DJCI - news) this morning has upgraded the stock from 'sell' to 'neutral' after yesterday's big fall, but said that there are still 'major challenges ahead'. The broker said that firm needs to up investment to improve long-term profitability and cash generation; this, along with the loss of cash inflows from West Coast means that there is an increased risk to the dividend.

1004: This is what analysts at Panmure Gordon are saying today about Halfords latest trading statement: "The second quarter performance is a very strong turnaround after the depths of the first quarter. While perhaps some of the improvement is a one-off, the new chief executive has a stronger platform than he might have expected as he starts his first day. We are increasing our target price from 220p to 300p to reflect the better P&L performance, our greater inclination to accept management guidance for the second half and the appointment of a high pedigree Chief Executive. At our new target price the shares would trade at 9.7x earnings and yield 5%. The shares should have a good day today."

0958: Spain's Treasury has this morning sold 3,992m in 2,3 and 5 year debt. Bid-to-cover ratios fell across all maturities as did the yields on offer. The interest rate on five year debt dropped to 4.766% from 6.459% the last time around. Despite the above solid results however some market chatter, when looking out to next year, is less than optimistic. FTSE 100 (Euronext: VFTSE.NX - news) down 15 to 5,811.

0937: Tate&Lyle continues to lead gains on the top share index at the moment, after analysts at Credit Suisse (NYSEArca: CSMA - news) raised their target on the firm to 750p from 700p before. Speaking on Bloomberg TV earlier fund manager Gervais Williams touted the following stocks: Fairpoint Group, UK Mail and Grencore Group. As an aside, analysts at Nomura are of the opinion that Mitt Romney came out the winner from yesterday's televised election debate Stateside, which may prolong the uncertainty. FTSE 100 down 12 to 5,814.

0901: Footsie is already off the top, with resource stocks such as BHP, BG and BP weighing down the index. Financials (Euronext: IXEFI.NX - news) such as Royal Bank of Scotland (LSE: RBS.L - news) , Standard Chartered (Xetra: 859123 - news) , Aviva (LSE: AV.L - news) and Prudential (LSE: PRU.L - news) are doing their bit to bolster the top-share benchmark. Among the mid-tier players, Halfords has ended its string of disappointing trading updates with the slightly surprising news that it expects full-year profits will be at the top end of the range of analyst forecasts. The car parts and bicycles seller saw second quarter like-for-like sales enjoy a boost from the Tour de France and Britain's success in the Olympics cycling event. Matt Davies, the former boss of retailer Pets at Home, has been named as the new Chief Executive Officer of Halfords, replacing David Wild, who got on his bike abruptly in the summer. FTSE 100 is up 10 at 5,836.

0816: UK stocks have opened higher ahead of today's announcement from the Bank of England's Monetary Policy Committee (MPC) at noon on its asset purchase programme. Most economists expect the MPC will stand pat on its existing policies. On the corporate front, prospective merger partners Xstrata (Dusseldorf: XTR.DU - news) and Glencore are both on the rise, but elsewhere in the mining sector BHP and Randgold are off the pace. Russian steel firm Evraz is the worst performing blue-chip after announcing it has taken a controlling stake in one of its coking coal suppliers. FTSE 100 is up 20 at 5,846.

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