UK shares saw selling pressure on Thursday following the Bank of England’s historic decision to deliver the first back to back interest rate increase since 2004.
Sentiment was further dampened following a 24% decline in Meta shares, previously known as Facebook which sent US indices into the red with the tech heavy Nasdaq Index down 2.25% and the SAP Index off 1.4%.
Meta has been impacted by competition from the likes of TikTok and changes in privacy measures introduced by Apple.
The UK central bank voted unanimously in favour of raising the benchmark interest rate by 25 basis points to 0.5%, as expected.
Markets now expect base rates to reach 1% by May, previously expected by June, and 1.5% by September.
The Bank also intends to taper its £895 billion stimulus package, which was introduced when the pandemic hit the UK economy.
The recent surge in the oil price has added to inflationary pressures within the economy, and this has exacerbated the pressure on the monetary policy committee to increase interest rates.
Inflation is expected to soar to as much as 7.25% in April, when energy bills are set to rise. This is up from 5.4% in December, and more than three times the Bank's target.
The FTSE 100 index ended the session 0.71% lower at 7528.84, and the mid cap FTSE 250 Index finished 1.27% weaker at 21,967.78
BT’S SPORTS SPLITS
BT shed 4.6% at 186p after the telecoms giant lowered full-year revenue guidance for the year to 31 March 2022. The company also abandoned plans to sell its sports broadcasting arm and instead is setting up a 50/50 joint venture with Eurosport-owner Discovery. BT’s existing major sports broadcast rights include Premier League and Champions League matches.
A lukewarm reception was given to the fiscal third-quarter update from oil major Shell (RDSA), with the shares rising driftin 1.2% to 1895p after the company announced a new share repurchase programme.
Shares in Compass (CPG), the contract caterer stock jumped 4% to £17.20 after reporting a continued improvement in trading across all parts of its business.
‘The structural outlook for new business wins and market share growth is compelling,’ said analyst at Liberum. But the broker retained some caution given uncertainties over short-term volume and margin recovery given challenging market conditions, Liberum said in a note.
Gambling software maker Playtech (PTEC) rallied 8.2% to 633.5p after TTB Partners sought its release from takeover rules that prevent the shareholder from making a fresh offer for the UK company after the Aristocrat deal collapsed.
Measurement technology firm Renishaw (RSW) saw interim revenue increase 27% to £325.2 million and pre-tax profit almost double to £84.2 million as it recovers from the effects of the pandemic.
The company also unveiled a 16p per share dividend and pointed to further recovery ahead, guiding for adjusted pre-tax profit of between £157 million and £181 million on full year revenue in the range of £650 million to £690 million.
That saw Renishaw shares rally 6.7% on Thursday to £49.00.
ELSEWHERE ON THE MARKETS
The Independent Directors of ads agency M&C Saatchi (SAA) have rejected another takeover approach from AdvancedAdvT (ADVT), the buyout vehicle of IT entrepreneur and M&C non-executive director Vin Murria.
The UK Takeover Panel has agreed to extend the deadline for AdvancedAdvT to 3 March 2022, by when it must either announce a firm intention to make an offer for M&C Saatchi or walk away.
M&C stock rose 2.2% to 181p. AdvancedAvdT shares remain suspended.
Virgin Wines (VINO:AIM) plunged 22.5% to 155p after reporting a ‘material slowdown’ in sales in the second quarter. The company reported half-year revenue flat year-on-year, implying Q2 declines of somewhere between 10% and 15% on Q1 13% growth.
Sausages firm Cranswick (CWK) nudged 1.2% higher to £37.66 after reporting robust trading through the Christmas period, although the company’s full year expectations remain unchanged.
