London midday: FTSE rallies as utilities, gold miners jump; BoE stands pat

(Sharecast News) - London stocks had extended gains by midday on Thursday as the Bank of England left rates on hold as expected, with utilities surging ahead as investors welcomed United Utilities' latest investment plans.

The FTSE 100 was up 1% at 10,313.78 as the BoE left interest rates unchanged at 3.75%, as widely expected, with the Monetary Policy Committee voting by a majority of eight to one to stand pat.

It is the second time it has kept Bank Rate on hold since the outbreak of war in the Middle East, which has sent global energy prices soaring and reignited inflation fears.

Meanwhile, oil prices retreated, with Brent crude down 1.4% at $116.41, having earlier topped $126 a barrel - the highest since 2022 - following a report the US military is due to brief president Donald Trump on potential action against Iran.

Neil Wilson, UK investor strategist at Saxo Markets, put the dip in oil prices down to technical reasons. "I think there was a bit of spiky price action due to the expiry of the June contract and traders pushed it up aggressively on low volume so maybe that is just unwinding a bit," he said.

According to Axios, Trump is rejecting an Iranian proposal to first open the Strait of Hormuz and lift the blockade, and postpone nuclear talks to a later stage. Axios, which cited two sources with knowledge of the matter, said the US Central Command (CENTCOM) will present Trump with plans for possible military action.

Trump reportedly told Axios he is going to keep Iran under a naval blockade until the regime agrees to a deal that addresses US concerns about its nuclear program.

It was understood that CENTCOM has prepared a plan for a "short and powerful" wave of strikes on Iran in hopes of breaking the negotiating deadlock. Axios said that after the strikes, which would likely include infrastructure targets, the US would press the regime to come back to the negotiating table and show more flexibility.

Susannah Streeter, chief investment strategist at Wealth Club, said: "Trump has reportedly rejected Tehran's plan to reopen the Strait of Hormuz and is doubling down on the US naval blockade of Iran's ports. With oil storage limited, Iranian facilities may have to reduce production within days. There had been high hopes that a ceasefire would start to see prices at the pumps retreat, but amid this standoff, it seems that the only way is up for the cost of filling up.

"It's also set to keep freight costs highly elevated, looks set to push packaging costs higher, given plastics are made from petrochemicals and could have a highly damaging effect on global food production. Urea shipments, used for fertiliser, are blocked and costs have rocketed for farmers around the world, who didn't buy stocks in advance. The worry is that all these costs will be passed on through supply chains, pushing up the price of everyday goods, later in the year and into next year."

In equity markets, utilities were the standout performers after water company United Utilities unveiled plans to raise �800m to help fund a wide-ranging, multi-billion pound investment in its infrastructure. Severn Trent, British Gas owner Centrica, National Grid and Pennon also gained.

Russ Mould, investment director at AJ Bell, said: "Plans for a massive flood of investment...has created an unusual level of excitement for a part of the stock market historically seen as pretty boring.

"The plan to support areas like data centres, clean energy and new homes is being taken as a game changer by investors for now, although delivering on this big programme of spending and remaining on time and on budget is the big challenge for the company."

Gold miners Fresnillo, Endeavour and Hochschild all shone as gold prices advanced. Endeavour was also up as it reported record first-quarter adjusted EBITDA and free cash flow and said it was on track to potentially more than double its commitment to minimum shareholder returns.

Persimmon advanced as the housebuilder hailed a good start to the year but also flagged early signs of increased inflationary pressure.

Rolls-Royce rose as it held guidance after making a strong start to the year across all divisions as it moved quickly to mitigate the impact of the Iran war.

Standard Chartered rallied as the bank's first-quarter profits came in ahead of expectations, driven by strong growth in the blue chip's wealth business.

Unilever rose as the consumer goods giant reconfirmed its outlook despite heightened macroeconomic activity, following a robust start to the year.

On the downside, Weir, Greggs, Genuit and Bodycote all fell as they traded without entitlement to the dividend. Weir was also hit by news that long-standing chief executive Jon Stanton is planning to step down.

Whitbread fell as it announced a new five-year plan that will involve the sale and leaseback of �1.5bn of its freehold properties, target �2bn of free cash flow, reduce gross capital expenditure by �1bn and result in the loss of around 3,800 jobs.

DCC slumped after saying it had rejected a 5,800p per share cash takeover proposal from US investment firms Energy Capital Partners and KKR.

Market Movers

FTSE 100 (UKX) 10,313.78 0.99%

FTSE 250 (MCX) 22,321.18 0.54%

techMARK (TASX) 5,841.50 0.49%

FTSE 100 - Risers

United Utilities Group (UU.) 1,466.50p 11.70%

Severn Trent (SVT) 3,289.00p 7.84%

Rolls-Royce Holdings (RR.) 1,166.20p 6.50%

Standard Chartered (STAN) 1,849.60p 3.56%

Fresnillo (FRES) 3,202.00p 3.02%

Antofagasta (ANTO) 3,517.00p 2.57%

Persimmon (PSN) 1,051.50p 2.43%

Centrica (CNA) 211.20p 2.32%

BAE Systems (BA.) 2,039.00p 1.97%

GSK (GSK) 1,937.00p 1.92%

FTSE 100 - Fallers

Smurfit Westrock (DI) (SWR) 2,773.00p -6.06%

Weir Group (WEIR) 2,600.00p -5.64%

Whitbread (WTB) 2,308.00p -3.35%

Flutter Entertainment (DI) (FLTR) 7,928.00p -2.05%

DCC (CDI) (DCC) 5,755.00p -1.87%

Autotrader Group (AUTO) 499.60p -1.81%

Entain (ENT) 546.20p -1.65%

IG Group Holdings (IGG) 1,500.00p -1.61%

ICG (ICG) 1,772.00p -1.34%

Rightmove (RMV) 432.90p -1.25%

FTSE 250 - Risers

Raspberry PI Holdings (RPI) 605.50p 6.35%

Pennon Group (PNN) 549.00p 6.29%

Endeavour Mining (EDV) 4,394.00p 6.23%

Hochschild Mining (HOC) 621.00p 4.89%

AEP Plantations (AEP) 1,904.00p 3.93%

Wizz Air Holdings (WIZZ) 893.00p 3.83%

Pan African Resources (PAF) 140.02p 3.15%

Ceres Power Holdings (CWR) 627.50p 2.74%

PPHE Hotel Group Ltd (PPH) 1,512.00p 2.57%

C&C Group (CDI) (CCR) 117.80p 2.26%

FTSE 250 - Fallers

Greggs (GRG) 1,506.50p -3.15%

Sequoia Economic Infrastructure Income Fund Limited (SEQI) 79.00p -3.07%

Genuit Group (GEN) 253.00p -2.92%

Playtech (PTEC) 363.20p -2.67%

4Imprint Group (FOUR) 3,644.00p -2.30%

Elementis (ELM) 146.00p -2.15%

Bridgepoint Group (Reg S) (BPT) 246.40p -1.91%

Close Brothers Group (CBG) 429.80p -1.69%

WH Smith (SMWH) 502.00p -1.57%

Henderson Far East Income Ltd. (HFEL) 257.00p -1.53%