UPDATE 3-FTSE 100 firms as oil majors gain, BoE growth target cut feeds stimulus hopes

  • Reuters
  • Stock Market News
UPDATE 3-FTSE 100 firms as oil majors gain, BoE growth target cut feeds stimulus hopes
Credit: © Reuters.

* FTSE 100 up 0.3%, FTSE 250 up 0.7%

* Gold touching multi-year highs lifts Fresnillo

* Carnival (NYSE: CCL ) slumps after forecast cut

* BCA jumps after takeover interest

* Poor results and forecast hit Dixons Carphone

(Adds news item, updates with closing prices)

By Muvija M and Yadarisa Shabong

June 20 (Reuters) - London's FTSE 100 rebounded on growing hopes of more central bank stimulus after the Bank of England cut its growth forecast and the U.S. Federal Reserve flagged interest rate cuts, though cruise operator Carnival slid after lowering its profit target.

The FTSE 100 index .FTSE rose 0.3% with BP BP.L and Shell RDSa.L both up more than 1% as Middle East tensions drove oil prices higher. O/R

The more domestically focused midcap index .FTMC outperformed, rising 0.7% to its highest in nearly a month. It was led higher by a 22% surge in car auction firm BCA Marketplace BCA.L after it received a nearly 2 billion pound takeover bid from private equity firm TDR Capital.

The pound trimmed gains after the BoE cut its second-quarter growth forecast to zero and highlighted risks from global trade tensions and growing fears of a no-deal Brexit.

But exporter stocks still took a hit as sterling held on to some earlier gains. Reckitt Benckiser RB.L , HSBC HSBA.L and AstraZeneca AZN.L all edged lower.

The BoE statement lifted hopes of more stimulus, after the Fed's statement late on Wednesday raised expectations that a decade-long global rally in stock markets may not quite have run out of steam.

"With the U.S. Federal Reserve now striking a more dovish pose as it also sees rising downside risks in the global economy, we shouldn't entirely rule out the possibility the next interest rate move may be downwards," Hargreaves Lansdown (LON: HRGV ) analyst Laith Khalaf said.

Precious metals miner Fresnillo FRES.L led gains with a 5.5% rise, having earlier jumped as much as 7%, as gold prices hit their highest in more than five years after the statement. Airways owner IAG ICAG.L and easyJet EZJ.L were up nearly 3%, recovering from steep falls in the last session when HSBC cut its rating on the stocks.

But London-listed shares in Carnival CCL.L slumped 12% on their worst day in roughly 7-1/2-years as the cruise operator cut its profit forecast due to the Trump administration's sudden ban on cruises to Cuba. Pizza Group Plc DOM.L jumped 11% after a media report that the company is expected to appoint internal candidate Andrew Rennie as its new CEO. Carphone DC.L recouped some losses to be down 5.1% after earlier touching a decade-low, as it reported a slump in full-year profit and pointed to worse to come as it struggles in a fierce mobile phone retail market.

In contrast, homewares retailer Dunelm DNLM.L jumped 8.5% to a three-year high after it raised its earnings forecast for the second time in just over two months, while clothing retailer N Brown Group BWNG.L advanced 3% on results.

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