London stocks higher as US Federal Reserve holds steady

London’s financial markets saw a notable uptick on Thursday morning following the US Federal Reserve’s decision to maintain interest rates. The FTSE 100 index opened with a robust gain of 1.2%, rising by 91.13 points to reach 7,433.56. The FTSE 250 was up 2.0% or 346.79 points, standing at 17,532.68, and the AIM All-Share saw a rise of 0.5%, adding 3.58 points to close at 687.15.

Later today, the Bank of England will disclose its decision on interest rates, widely expected to be a continuation of their ‘data dependent’ approach. The central bank’s last meeting in September saw no change in interest rates, keeping the bank rate steady at 5.25%, marking a more than 15-year high.

In the FTSE 100 FTSE 100, BT Group emerged as the top performer, jumping by 8%. The telecommunications giant reported steady year-on-year revenue, edging up to £10.41 billion from £10.37 billion in the first half of the year. More notably, pre-tax profits recorded a substantial jump of 29%, surging from £831 million to £1.08 billion. CEO Philip Jansen expressed confidence, stating, “Our first-half performance affirms our financial outlook for FY24, with normalized free cash flow now expected towards the upper end of the guidance range.”

Sainsbury’s also saw a significant uptick in its share price, rising by 4.5%. The grocer anticipates its underlying pre-tax profit to fall within the upper range of its guidance, ranging from £670 million to £700 million for the financial year. In the 28 weeks ending September 16, the supermarket’s group sales, including value-added tax, increased by 2.9% annually to £18.67 billion, while excluding fuel, they rose by a noteworthy 7.7% to £15.81 billion. Despite a 27% decline in pre-tax profits, dropping to £275 million from £376 million, the underlying basis revealed a more encouraging figure, remaining steady at £340 million.

Meanwhile, Entain, saw a 4.5% decline as it grappled with “continued customer-friendly results” in October, which impacted its sports margins. The sports betting and gaming firm reported a 7% growth in net gaming revenue for the third quarter.

In the energy sector, Shell stood out, gaining 2.0% as it managed to meet market expectations despite a 34% decline in adjusted earnings for the third quarter compared to the previous year. The company’s resilience contrasted with the recent performance of its industry peer, BP, which missed its forecast underlying replacement cost profit by around $700 million.

In the FTSE 250, Trainline soared 8.4% after reporting a robust first half. The company revealed a 23% increase in net ticket sales, reaching £2.65 billion, and a 19% rise in revenue, reaching £197 million. Trainline attributed its success to the near-full recovery of passenger numbers from the Covid-19 pandemic. Despite challenges like industrial action and broader macroeconomic uncertainties, the company expressed optimism, revising its full-year revenue growth expectations to a range of 15% to 20%.