Thursday, 20th December: The rate hike by the Fed had in instant reaction on stock markets in the US yesterday, and an equally forceful impact on the FTSE 100 this morning, which opened 1.4% lower at 6,671, reversing yesterday’s gains.
The dollar fell to a one-month low on Thursday morning to 96.258 against rivals due to news from the Fed that they would have fewer rate rises in 2019 and 2020 in comparison to this year, and due to the news, which suggested a cautious outlook on the US economy.
In the UK however, the BoE unanimously decided to leave UK interest rates as they are at 0.75%, largely due to the uncertainty of what Brexit will bring, and the negative impact it will have on UK companies looking to borrow money.
Greencore was at the top of the FTSE 250 following the tender offer announcement, which priced them at a 17.5% premium to yesterday’s closing price at £1.95 per ordinary share. The news allowed the stock to rise by more than 7.0% in the afternoon to 178p and allowed them to escape being piled in with the stocks at the bottom end of the index which were suffering from political news.
The FTSE 100 didn’t manage to undo the damage done from the rate hike in the US, as it closed 0.80% lower at 6,712.