LONDON (ShareCast) - (Sharecast News) - London's stock markets ended the day on a positive note on Thursday, following the Bank of England's decision to maintain interest rates as markets widely expected.

The FTSE 100 index gained 1.42%, closing at 7,446.53 points, while the FTSE 250 jumped 3.38%, reaching a closing value of 17,767.30.

In the currency market, sterling was last 0.26% stronger on the dollar, trading at $1.2183, while it weakened 0.17% against the euro to change hands at €1.1477.

"Stock markets have a definite groundhog feel to them today, as once again hopes of a peak in interest rates have seen stocks rally," said IG chief market analyst Chris Beauchamp.

"This rally comes almost on cue in seasonality terms but is doubtless based on expectations that rates will pause here and, in due course, come down.

"Investors have been disappointed before on this front, however, so they need to resist the temptation to charge back into stocks too quickly."

Beauchamp added that BoE governor Andrew Bailey had "joined the club" of central bankers being more cautious about the chance of more rate hikes.

"They are not off the table, just out of reach for now.

"The recent reversal in oil prices from a one-year high has done much to calm fears of a renewed inflationary surge, though recession fears remain given that the full impact of the global rise in rates has yet to be felt."

BoE joins Fed in keeping interest rates on hold

The Bank of England indeed kept interest rates steady at 5.25% in its latest decision at lunchtime, marking the second consecutive meeting without a rate change after a streak of 14 hikes that began in December 2021.

It also maintained expectations of 0.5% GDP growth for the current year but downgraded its outlook for next year to zero growth from the previously projected 0.5%.

Additionally, the Bank revised its forecast for consumer price inflation, anticipating it to be around 4.6% in the fourth quarter, slightly lower than the earlier estimate of 4.9%.

BoE governor Andrew Bailey said interest rates were working to curb inflation.

"But we need to see inflation continuing to fall all the way to our 2% target," he said.

"We've held rates unchanged this month, but we'll be watching closely to see if further rate increases are needed. It's much too early to be thinking about rate cuts."

The decision came on the back of the US Federal Reserve also opting to keep interest rates unchanged overnight, with chair Jerome Powell emphasising the need for patience among policymakers before any further adjustments.

The federal funds rate remained within the range of 5.25% to 5.5% following the decision by the Federal Open Market Committee.

In Norway, the central bank also stayed its course by maintaining interest rates as expected but hinted at a potential rate hike in December.

The unanimous decision saw the policy rate kept at 4.25%.

In economic news, Europe's manufacturing sector faced challenges with a sharp decline in activity in October.

The HCOB eurozone manufacturing purchasing managers' index (PMI) dropped to 43.1, marking a three-month low and one of the steepest declines on record.

The output index remained unchanged at 43.1.

HCOB noted a severe contraction in new orders during October, contributing to a substantially reduced factory production.

In Germany, fresh data revealed an increase in unemployment numbers for October.

According to the Federal Labour Office, jobless claims surged by 30,000 to 2.678 million, surpassing consensus expectations of a 15,000 rise and following a revised 10,000 increase in September.

The seasonally adjusted national unemployment rate rose by 0.1 percentage points to 5.8%, aligning with expectations and marking the highest rate since June 2021.

Finally on data, the US Labor Department reported an unexpected rise in Americans filing for unemployment benefits.

Initial jobless claims increased by 5,000 from the prior week's upwardly revised level, reaching 217,000.

The figure exceeded analysts' expectations of 210,000.

Ocado and BT in the green, Hikma and Haleon slump

On London's equity markets, Ocado Group soared by 6.96%, with the online grocer and warehouse technology developer performing exceptionally well through the closing bell.

"The true test of how investors are feeling is to look at Ocado's share price," quipped Russ Mould, investment director at AJ Bell.

"If it is rising, there is a good chance that investors are in a risk-on mood; if it is falling, then investors are feeling cautious.

"The stock is the FTSE 100's biggest blue-sky company - its earnings growth potential is centred on winning more clients and getting existing clients to deploy more of its technology."

Elsewhere, Cab Payments leapt 16.89%, claiming the top spot on the FTSE 250 index, partly driven by short covering.

BT Group added 5.18%, buoyed by its reaffirmed full-year guidance, reporting flat revenue and a 6% rise in half-year adjusted EBITDA.

J Sainsbury registered a gain of 4.43% after the supermarket chain raised its full-year outlook following robust grocery sales in the first half.

Smith & Nephew saw a rise of 4.07%, citing expectations of sales growth at the top end of guidance after a solid third quarter, albeit with a cautionary note about margin growth.

Oil giant Shell climbed 4.35%, reporting third-quarter adjusted earnings of $6.2bn and announcing a $3.5bn share buyback plan over the next three months.

Trainline steamed ahead by 9.47% after it saw double-digit growth across the board in the first half and adjusted its full-year guidance upward.

OSB Group, Helios Towers, and Derwent London also recorded substantial gains after their own updates, closing up 16.71%, 10.98% and 8.83%, respectively.

On the downside, Hikma Pharmaceuticals fell 5.1% after it raised full-year guidance for two of its businesses but lowered annual sales guidance for the injectables segment.

Haleon lost 3.34% after reaffirming its full-year targets but posted slightly weaker-than-expected third-quarter revenues.

Kitchen supplier Howden Joinery Group decreased 3.01% after it reported resilient trading but cautioned that full-year results were set to be at the lower end of market expectations due to a more uncertain macroeconomic outlook.

Ashmore Group and Hilton Food Group were down 1.41% and 0.45%, respectively, as they traded without entitlement to the dividend.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,446.53 1.42%
FTSE 250 (MCX) 17,767.30 3.38%
techMARK (TASX) 4,060.09 0.67%

FTSE 100 - Risers

Ocado Group (OCDO) 509.20p 7.00%
BT Group (BT.A) 117.45p 5.72%
Unite Group (UTG) 942.00p 5.66%
SEGRO (SGRO) 748.60p 5.53%
Land Securities Group (LAND) 602.20p 4.99%
Experian (EXPN) 2,608.00p 4.78%
Smith & Nephew (SN.) 962.00p 4.18%
Shell (SHEL) 2,768.00p 4.18%
Lloyds Banking Group (LLOY) 41.78p 4.06%
Sainsbury (J) (SBRY) 271.80p 3.82%

FTSE 100 - Fallers

Entain (ENT) 884.40p -5.91%
Hikma Pharmaceuticals (HIK) 1,835.50p -4.40%
Haleon (HLN) 320.20p -3.29%
Centrica (CNA) 157.60p -2.90%
GSK (GSK) 1,396.00p -1.90%
Whitbread (WTB) 3,312.00p -1.72%
Severn Trent (SVT) 2,669.00p -1.22%
BAE Systems (BA.) 1,105.00p -1.12%
Coca-Cola HBC AG (CDI) (CCH) 2,104.00p -0.85%
United Utilities Group (UU.) 1,081.50p -0.60%

FTSE 250 - Risers

CAB Payments Holdings (CABP) 71.30p 16.89%
OSB Group (OSB) 334.80p 16.09%
Tritax Eurobox (GBP) (EBOX) 49.55p 11.98%
CLS Holdings (CLI) 94.90p 10.86%
Workspace Group (WKP) 543.50p 9.14%
Urban Logistics Reit (SHED) 117.20p 8.92%
Ceres Power Holdings (CWR) 220.20p 8.69%
Derwent London (DLN) 2,004.00p 8.62%
Hammerson (HMSO) 24.70p 8.52%
LXI Reit (LXI) 93.80p 8.44%

FTSE 250 - Fallers

Howden Joinery Group (HWDN) 625.40p -2.83%
Discoverie Group (DSCV) 619.00p -1.59%
Digital 9 Infrastructure NPV (DGI9) 45.90p -1.18%
Ashmore Group (ASHM) 168.10p -1.06%
Bakkavor Group (BAKK) 85.60p -0.93%
North Atlantic Smaller Companies Inv Trust (NAS) 3,480.00p -0.85%
PZ Cussons (PZC) 133.00p -0.45%
Renishaw (RSW) 3,040.00p -0.33%
TBC Bank Group (TBCG) 2,785.00p 0.00%
W.A.G Payment Solutions (WPS) 91.40p 0.00%

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