London open: Markets cautious ahead of policy decisions

7th Feb 2013 08:42

The FTSE 100 index opened slightly higher on Thursday morning, helped by some decent gains by Vodafone, TUI Travel and Compass, but trade was cautious ahead of the monthly policy meetings at the Bank of England (BoE) and European Central Bank (ECB).The BoE decision is expected at midday, with forecasts for no change to the current record-low Bank Rate of 0.5% and the asset purchase programme of £375bn.However, as senior market analyst Michael Hewson from CMC Markets explained this morning, the markets are going to be more interested in what BoE Governor elect Mark Carney has to say during his testimony at 09:45 to the Treasury Select Committee."Given Mr Carney's recent references to nominal GDP targeting, markets will be looking to see if he expands on that theme, and whether he thinks the current policy toolbox of the bank needs expanding. Any hint of a dovish response could well be negative for sterling."It seems more likely that he will try and maintain as neutral a stance as possible with respect to showing his hand on policy, given that he hasn't as yet taken up the reins at the bank and will want to avoid ruffling too many feathers before he even takes up his seat," Hewson said.As for the ECB, President Mario Draghi is also expected to announce at 12:45 that policy makers have decided to hold rates, but the focus will be the following press conference."It's looking more and more likely that the bank will cut interest rates at some point over the coming months, but the consensus appears to be that it won't be today. However, it's difficult to see what will be gained by waiting a few extra months, especially with inflation now at 2.0%," said market analyst Craig Erlam from Alpari.FTSE 100: Vodafone, TUI and Compass gain early onTelecoms group Vodafone rose despite posting a 1.8% drop in revenue for the last three months of 2012, blaming a difficult market conditions in Europe. However, the company said it expects adjusted operating profit in the upper range of £11.1bn to £11.9bn for the 2013 financial year.Travel and leisure firm TUI Travel gained after reporting a narrower operating loss in the first quarter as it saw outperform in the UK and Nordic markets.Contract caterer Compass was a high riser after having a good first quarter with expectations for the full year unchanged as its North America and emerging market performing strongly.Burberry sank early on after the luxury brand named Carol Fairweather, formerly Senior Vice President of Group Finance, as its new CFO.Medical technology group Smith & Nephew edged lower despite beating forecasts in the fourth quarter as it said that margins are expected to fall in 2013.FTSE 250: Ocado and SuperGroup surgeOnline grocer Ocado jumped after reporting a 13% rise in revenue in 2012, helped by rising demand.Trendy fashion brand SuperGroup also jumped after unveiling a 12.3% increase in sales for the holiday season as shoppers stocked up on jackets, knitwear and gifting accessories.FTSE 100 - RisersVodafone Group (VOD) 173.05p +1.58%TUI Travel (TT.) 307.80p +1.38%Amec (AMEC) 1,097.00p +1.11%Severn Trent (SVT) 1,654.00p +1.10%Compass Group (CPG) 773.50p +1.05%CRH (CRH) 1,326.00p +0.84%Aviva (AV.) 355.90p +0.82%Tesco (TSCO) 365.95p +0.76%Experian (EXPN) 1,103.00p +0.73%Royal Dutch Shell 'A' (RDSA) 2,213.00p +0.71%FTSE 100 - FallersBurberry Group (BRBY) 1,376.00p -3.78%Hargreaves Lansdown (HL.) 799.00p -2.20%Eurasian Natural Resources Corp. (ENRC) 369.00p -1.76%IMI (IMI) 1,187.00p -1.00%Aberdeen Asset Management (ADN) 408.00p -0.99%Shire Plc (SHP) 2,120.00p -0.93%GlaxoSmithKline (GSK) 1,435.50p -0.93%Fresnillo (FRES) 1,670.00p -0.83%Associated British Foods (ABF) 1,763.00p -0.73%Vedanta Resources (VED) 1,289.00p -0.69%FTSE 250 - RisersSupergroup (SGP) 700.50p +10.58%Ocado Group (OCDO) 110.40p +6.26%Beazley (BEZ) 202.00p +6.09%Centamin (DI) (CEY) 62.30p +4.53%IP Group (IPO) 130.70p +4.14%Petra Diamonds Ltd.(DI) (PDL) 116.80p +2.55%Amlin (AML) 400.10p +2.07%Homeserve (HSV) 238.20p +1.79%Home Retail Group (HOME) 127.60p +1.51%Wetherspoon (J.D.) (JDW) 522.50p +1.46%FTSE 250 - FallersOphir Energy (OPHR) 476.00p -8.37%Dairy Crest Group (DCG) 412.80p -2.18%ICAP (IAP) 350.90p -1.68%SIG (SHI) 131.70p -1.57%IG Group Holdings (IGG) 490.70p -1.33%AZ Electronic Materials SA (DI) (AZEM) 384.00p -1.29%Genesis Emerging Markets Fund Ltd. (GSS) 597.50p -1.24%London Stock Exchange Group (LSE) 1,248.00p -1.19%St. Modwen Properties (SMP) 252.50p -1.10%Domino Printing Sciences (DNO) 652.00p -1.06%BC