The Market Close- Bank of England keeps interest rates on hold

Today's Closing Update

U.S.Stocks after falling sharply early in the session continued to see significant weakness in morning trading. The major averages are adding to the modest losses posted in the previous session.

European Stocks dropped to their lowest in three weeks, struggling after data showed business activity in the eurozone at its slowest pace of expansion in more than a year.

The Bank of England has left the door open to raise UK interest rates in May after making no change this month, holding them steady at 0.5%. Two members of the Bank’s nine-member Monetary Policy Committee – Ian McCafferty and Michael Saunders – backed an increase in rates to 0.75%. That was a departure from the unanimous vote at the last MPC meeting in February. In November, the Bank raised rates to 0.5%, the first increase for a decade. The MPC said “ongoing tightening” was likely to be needed to return inflation back to the Bank’s 2% target.

GlaxoSmithKline has pulled ahead in a race to buy Pfizer’s consumer healthcare business, which the U.S. drugmaker believes could be worth as much as $20bn, after its main rival Reckitt Benckiser quit the auction.

Crest Nicholson Holdings said that total forward sales contributing to the current financial year were up 15% at £620m, higher than the £541m achieved at the same point last year. The firm said ‘Demand for new homes continues to be strong underpinned by high levels of employment and Government policies to improve access to housing’. Also supporting home buying activity was a slowdown in house price growth.

GKN has written to its shareholders urging them not to back Melrose Industries’ hostile takeover bid and describing Melrose as an unsuitable steward of the company. With a week until the 29 March deadline for shareholders to respond to Melrose’s £8.1bn offer, GKN Chairman Mike Turner told shareholders Melrose’s offer was “wholly inadequate” compared with GKN’s own strategy. His letter is the latest salvo in a bitter battle for the future of the UK100 engineer.

Europe, Australia and South Korea will be among a significant list of trading partners to be initially exempt from new tariffs on foreign steel and aluminium, the top US trade official said on the eve of Friday’s imposition of the import taxes. US President Donald Trump announced March 8 that global tariffs of 25% on foreign steel and 10% on aluminium products would be imposed within 15 days, invoking a rarely used US law authorizing presidential action against imports that undermine national security.

Oil Prices retreated from a seven-week highs, caught between an unexpected weekly fall in U.S. inventories and the country’s ever-rising crude production.

Gold Prices inched lower as investors took profits. The metal hit a two-week high in the previous session, thanks to a weaker dollar after the US Federal Reserve disappointed investors who were expecting more hawkish comments on the trajectory of interest rate rises.

Market Close

UK 100	6,952.6	-86.4	-1.2%
UK 250	19,393.9	-274.2	-1.4%
GER 30	12,100.1	-209.1	-1.7%
FRA 40	5,167.2	-72.5	-1.4%
U.S. 30	24,330.12	-352.19	-1.4%
U.S. 500	2,679.4	-32.5	-1.2%
OIL (BRENT)	69.20	-0.27	-0.4%
GOLD	1,327.37	-4.87	-0.4%

UK Risers & Fallers

Vectura	74.075	+5.8	+8.5%
Softcat	610.5	+21	+3.6%
Reckitt Benckiser	5895	+269	+4.8%
Microfocus	911.8	-60.8	-6.3%
Schroders	3259	-127	-3.8%
Phoenix Group	757	-33	-4.2%

Reported Economic Data

9.30am: U.K. Retail Sales m/m	0.1%	0.4%	0.8%
12.00pm: U.K. MPC Official Bank Rate Votes	0-0-9	0-0-9	2-0-7
12.00pm: U.K. Monetary Policy Summary	–	–	–
12.00pm: U.K. Official Bank Rate	0.50%	0.50%	0.50%
12.30pm: U.S. Unemployment Claims	226k	225k	229k