LONDON MARKETS: FTSE 100 On Track For A Loss, Pound Drops As BOE Flags Growth Concerns

By Carla Mozee and Victor Reklaitis, MarketWatch

Pound drops after 'Super Thursday' data releases

U.K. stocks fell Thursday as the pound dropped, after the Bank of England gave a downcast outlook for the British economy, saying weakness in emerging markets will drag on growth and inflation prospects.

The FTSE 100 was down 0.4% to 6,389.50. Meanwhile, the pound was shoved 0.9% lower.

A loss on Thursday would break a three-day run of wins for the FTSE 100. But the blue-chip index has pared losses after the BOE news, which signaled the central bank could be less aggressive about raising interest rates than expected. The London benchmark even briefly traded in positive territory.

"Today's Bank of England interest rate announcement was more dovish than markets were expecting," said Jamie Brownlee, director at Citigate Dew Rogerson, in emailed comments. He added that "a signal has been provided that the market's expectations for future rate rises are too far away."

The BOE's signals were viewed as surprising investors (http://www.marketwatch.com/story/bank-of-england-pushes-out-timing-of-rate-rise-2015-11-05), many of whom were expecting the central bank to indicate that it believed markets had gone too far in pushing back expectations of when rates are likely to rise in Britain.

Lukman Otunuga, research analyst at FXTM, said in a note that "expectations of the BoE acting have heavily diminished and the effects of this Super Thursday surprise will continue to drag this month."

Individual movers: Randgold Resources Ltd. (RRS.LN) shares were down 3.7% as the gold producer's third-quarter profit fell (http://www.marketwatch.com/story/randgold-profit-falls-despite-record-gold-output-2015-11-05). Record gold output failed to offset the negative effect of lower gold prices and higher cash costs.

Commodities producer and trader Glencore PLC (GLEN.LN) lost 2%. It gave up early gains that came following a ratings upgrade to buy from hold at Deutsche Bank. The shares on Wednesday rose 5.4% as Glencore said it expected to cut more debt (http://www.marketwatch.com/story/glencore-cuts-debt-target-says-trading-is-on-track-2015-11-04) than previously expected.

Wm. Morrison Supermarkets PLC (MRW.LN) shed 4.9% after the retailer posted a 2.6% decline third-quarter sales (http://www.marketwatch.com/story/wm-morrison-sales-fall-26-amid-price-cuts-2015-11-05).

'Super Thursday': Investors received three major updates from the BOE: its latest rate decision for the U.K., minutes from the policy-setting meeting and the Quarterly Inflation Report.

The central bank, as expected, kept its key interest rate at a record low of 0.5%.

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November 05, 2015 10:26 ET (15:26 GMT)

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