FTSE 100 steadies as BoE rate cut looms

The FTSE 100 held firm as markets focused on an expected Bank of England rate cut later today, with sterling softer near $1.34. BP drew attention after naming Woodside Energy chief Meg O’Neill as its next chief executive, signalling a renewed focus on oil and gas. In the US, the S&P 500 and Nasdaq fell sharply on Wednesday, led by heavy losses in Nvidia, Broadcom and Oracle, which dropped further after confirming a key data-centre partner had stepped back. Oil prices stayed elevated following fresh US sanctions on Russia and the blockade of Venezuelan shipments.

Equities

The FTSE 100 closed 0.9% higher on Wednesday, lifted by banks and home builders after UK inflation fell to 3.2% in November. The move put the index back on track for its strongest year since 2009. Within the benchmark, HSBC rose 2.4% at the close on Wednesday after a brokerage upgrade supported the share price. Barclays added 1.7% the same afternoon, also benefiting from renewed confidence in the sector as traders increased their expectations of Bank of England rate cuts. Serco gained 7.4% on Wednesday, reaching its highest level in more than a decade, after the company said profit would come in ahead of analysts’ forecasts for this year and next.

In the United States, the S&P 500 fell 1.16% on Wednesday, while the Nasdaq dropped 1.81% and the Dow slipped 0.47%. The declines came as several well-known technology names came under pressure. Oracle fell 5.4% during Wednesday’s session after reports said Blue Owl Capital would not support a proposed $10 billion data-centre development. Amazon edged 0.6% lower on Wednesday after reports said it was in talks to invest around $10 billion in OpenAI. Nvidia fell 3.8% the same day, and Broadcom slid 4.5%, with both declines weighing on the wider semiconductor index.

Alphabet dropped 3.2% on Wednesday after a report said Google was launching a new initiative with Meta to challenge Nvidia’s software lead in artificial intelligence. Meta’s shares were broadly stable, with the report prompting close attention across the sector. Netflix rose 0.2% after its binding offer for Warner Bros Discovery was favoured over Paramount Skydance’s $108.4 billion hostile bid; Paramount’s shares fell 5.4% and Warner Bros Discovery declined 2.4% on Wednesday.

Energy producers in the US were among the strongest movers. ConocoPhillips and Occidental Petroleum both rose more than 4% on Wednesday after President Donald Trump ordered a blockade on sanctioned oil tankers entering and leaving Venezuela, a decision that supported crude prices.

Forex & Commodities

The US dollar held firm early as traders positioned ahead of a busy run of central bank decisions. The dollar index was steady at 98.39 in early Asian trading, following gains the previous session. Sterling remained under pressure after Wednesday’s sharp fall in UK inflation strengthened expectations of a Bank of England rate cut later today. The pound was little changed early this morning at $1.337, having moved lower the day before. The euro was steady at $1.174, while the yen edged slightly higher to around 155.9 per dollar as the Bank of Japan began a two-day policy meeting expected to deliver a rate rise on Friday.

Gold prices were broadly steady early this morning, held back by the firmer dollar but supported by recent signals from the Federal Reserve. Spot gold was trading around $4,333 an ounce after easing slightly following a strong rise late on Wednesday. Silver remained close to record levels at about $66.36 an ounce after setting a new high in the previous session. Platinum jumped to more than $1,974 an ounce early on Thursday, its highest level in over 17 years, while palladium climbed to around $1,687.

Oil prices rose early this morning after reports that the US is preparing further sanctions on Russian energy exports if peace talks with Ukraine fail. Brent crude traded near $60.10 a barrel, while US crude stood around $56.38. Prices were also supported by uncertainty over enforcement of Washington’s announced blockade on sanctioned Venezuelan oil tankers, which could disrupt up to 600,000 barrels a day of exports, although shipments to the US by Chevron-linked vessels were continuing.