Early market roundup: Stocks higher ahead of Bank of England decision

Stock prices in London were higher on Thursday morning, after the US Federal Reserve as expected announced an interest rate hike; meanwhile investors await an interest rate decision from the Bank of England at noon, with no change to the current 3.75% rate expected.

The FTSE 100 index opened up 67.63 points, 0.6%, at 10,756.10. The FTSE 250 was up 81.05 points, 0.3%, at 24,151.43, and the AIM all-share was up 0.60 points, 0.1%, at 788.96.

The Cboe UK 100 was up 0.6% at 1,069.66, the Cboe UK 250 was up 0.4% at 20,982.01, and the Cboe small companies was up 0.2% at 18,571.29.

In European equities on Thursday, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt was up 0.6%.

The pound was quoted at USD1.3387 early Thursday, lower than USD1.3449 at the London equities close on Wednesday. Against the euro, sterling rose to EUR1.1668 from EUR1.1658 a day prior.

The Bank of England announces its latest interest rate decision at 1200 BST, with market consensus expecting the central bank to leave Bank Rate unchanged at 3.75%.

The euro traded at USD1.1473 early Thursday, lower than USD1.1537 late Wednesday. Against the yen, the dollar was quoted at JPY155.71 versus JPY155.09.

Oil prices pulled back for a second day in a row. Brent was quoted at USD104.31 a barrel early Thursday, slightly lower than USD104.54 late Wednesday.

Back in London, Next was at the top of the FTSE 100, up 2.0%, after raising its full-year profit guidance following a better-than-expected first half.

Statutory pretax profit rose 11% to £566 million in the 26 weeks to August 1 from £509 million a year earlier, as revenue increased 9.6% to £3.45 billion from £3.14 billion.

Next lifted its full-year group pretax profit guidance by £12 million to £1.26 billion, citing slightly higher sales expectations and additional cost savings, mainly in warehousing.

However, the retailer moderated its UK sales growth forecast for the second half to 2.0% from 2.8%, saying it expects a slow and steady decline in consumer spending, though not a "precipitous" fall. It cited rising inflation, higher mortgage interest costs and a weak employment market as its main UK concerns.

The retailer declared an interim dividend of 98 pence per share, up 13% from 87p a year earlier.

Marks & Spencer was at the bottom of the blue-chip index, down 2.1%, after Goldman Sachs cut its price target to 470p from 490p, while retaining its 'buy' rating.

On the FTSE 250, Foresight Group Holdings was at the bottom, down 4.6%, as its shares traded ex-dividend.

Unite Group was also trading ex-dividend, down 2.9%. The student accommodation provider said 95% of beds in its Unite Students portfolio are reserved for the 2026/27 academic year, unchanged from a year earlier and within its 94% to 96% guidance range.

Unite expects like-for-like income growth of 0.5% to 1.0%, reflecting a modest increase in occupancy and broadly flat rents, compared with previous guidance for income growth of 0% to 2% and rental growth of 1% to 2%.

At the other end of the FTSE 250, Bytes Technology jumped 8.6% after lifting its annual guidance on expectations of a "strong" first half.

The Surrey-based enterprise software company said it expects operating profit to rise 6% in the six months that ended August 31 from a year earlier, reflecting the impact of cost normalisation. Gross invoiced income is estimated to have increased 19% year-on-year.

"We are pleased with the positive momentum in the first half across both our private and public sector businesses," Chief Executive Officer Sam Mudd said.

Wizz Air rose 4.8% after setting medium-term targets for financial 2030 including revenue of EUR10.00 billion, an Ebit margin of 10% and ex-fuel cost per available seat kilometre of EUR3.00 cents, as it outlined a path towards sustained profitability at its capital markets day.

Wizz Air also upgraded its second-quarter revenue outlook following a stronger-than-expected summer, now expecting revenue per available seat kilometre to be flat year-on-year, compared with previous guidance for a low-single-digit decline.

Capacity and first-half ex-fuel unit cost guidance were unchanged, but the airline did not provide guidance for financial 2027.

Among smaller caps, Alkemy Capital Investments rose 17% after saying its Tees Valley Lithium project had secured a £18.3 million UK government grant. The grant will form part of the £185 million investment planned for the project's first phase.

In Asia on Thursday, the Nikkei 225 index in Tokyo closed 0.3% higher. In China, the Shanghai Composite closed down 0.4%, while the Hang Seng index in Hong Kong ended 0.5% lower. The S&P/ASX 200 in Sydney closed up 0.4%.

In the US on Wednesday, Wall Street ended lower, with the Dow Jones Industrial Average down 1.2%, the S&P 500 down 0.5% and the Nasdaq Composite marginally lower.

The Federal Reserve raised interest rates by 25 basis points on Wednesday, as widely expected by markets, drawing criticism from US President Donald Trump.

The unanimous decision marked the Fed's first rate increase since July 2023. Chair Kevin Warsh reiterated concerns about inflation following the decision, saying the central bank was removing a "dose of accommodation" from monetary policy.

The yield on the US 10-year Treasury was quoted at 4.99%, widening from 4.97%. The yield on the US 30-year Treasury was quoted at 5.33%, narrowing from 5.34%.

Elsewhere, Canadian Prime Minister Mark Carney is due to address the European Parliament on Thursday, after Trump suggested that allowing Canada to become an associate member of the EU could be a "hostile act".

Trump's comments raised the stakes for Carney's speech, which will be watched for signs that the Canadian prime minister may deliver another broadside similar to his Davos address in January, when he warned that major powers such as the US could use economic dependence to pressure smaller nations.

European Commission President Ursula von der Leyen on Wednesday proposed making Canada the EU's first associate member, as Trump's threats drive Ottawa closer to Europe.

Gold was quoted at USD4,326.75 an ounce early Thursday, lower than USD4,345.07 on Wednesday.

Still to come on Thursday's economic calendar, Switzerland releases trade data, the eurozone publishes final inflation figures, and the UK announces its latest interest rate decision.

In the US, weekly jobless claims and building permits are due, while Canada releases producer price data.

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