The FTSE 100 index closed down by 0.1% on Thursday, shedding 11.14 points to settle at 10,897.27. This dip occurred despite the blue-chip index reaching a new intraday record high of 10,979.60 earlier in the session. The decline was attributed to several factors including a stronger pound sterling, which traded at $1.3439 against the dollar, mixed corporate earnings reports, and the Bank of England's decision to maintain its Bank Rate at 3.75%.
The Bank of England's Monetary Policy Committee voted 6-3 to keep interest rates unchanged, a decision that was largely anticipated by the market. Three members, Megan Greene, Catherine Mann, and Huw Pill, voted for a 25 basis point hike, raising speculation about future rate increases. This decision came after a period where the pound had soared against the dollar, indirectly impacting export-heavy FTSE 100 companies.
Corporate earnings presented a mixed picture. Rolls-Royce surged by 6.0% after significantly raising its full-year profit guidance following a strong first half, with operating profit increasing 17% to $2.42 billion and revenue up 21% to $11.45 billion. Lloyds Banking Group also gained after holding its annual guidance and reporting a 23% jump in half-year profits. In contrast, Rentokil Initial saw its shares plummet by 21% after the pest control firm abandoned its North American margin target and reported weakness in residential lead flow in the region. LSEG also traded lower despite lifting its full-year guidance.
The broader market saw the FTSE 250, the UK mid-cap index, rise by 0.3%, hitting an intraday record high. Despite the FTSE 100's overall dip, the performance was described as resilient in the aftermath of a Wall Street sell-off. The day's trading reflected investors weighing the impact of the central bank's monetary policy alongside a diverse range of company-specific financial updates.
