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FTSE 100: Markets dip lower ahead of ECB meeting, IG group shares plunge

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London’s FTSE indexes opened lower on Thursday as wariness about the likely path of interest rates resurfaced ahead of the European Central Bank’s (ECB) latest decision.

The FTSE 100 dipped 0.07 per cent to 7,522.91 while the midcap FTSE 250 index, which is more aligned with the health of the UK economy, opened 0.20 per cent lower at 19,132.23.

“The FTSE 100 has drifted lower in early trade as uncertainty reigns about the trajectory of interest rates in Europe,” Susannah Streeter, head of money and markets, Hargreaves Lansdown said.

“As attacks in the Red Sea continue, geopolitical concerns are still bubbling, and there are not many fresh cues to help propel stocks higher in Europe,” she continued.

Markets are looking forward to the latest interest rate decision from the ECB later today. The central bank is all but certain to leave rates on hold, but traders will scrutinise any guidance given about the future path of rate cuts.

“Our European economists are not expecting a change in messaging, and they expect President Lagarde to repeat that it’s too soon for the ECB to lower its guard on inflation,” Deutsche Bank’s Jim Reid noted.

“That said, investors still see a 64 per cent chance of a cut by the April meeting, so it’ll be interesting to see if there’s any weight given to the idea they could cut that soon,” he continued.

In London, St James’s Place slumped to the bottom of the FTSE 100.

The money manager brought in £5.1bn in inflows throughout 2023, but this was well down on the £9.8bn it attracted in 2022.

“While the need for trusted face-to-face financial advice remains as strong as ever, client capacity and confidence to commit to long-term investment have been impacted by the economic environment and short-term alternatives in the form of cash deposit and savings rates,” boss Mark Fitzpatrick said.

On the FTSE 250 chemicals firm Elementis jumped over eight per cent.

Stories emerged yesterday that the firm was a target for KPS Capital Partners, a New York-based private equity firm.

Shares in IG Group meanwhile lost over nine per cent.

In a trading statement out this morning, the firm reported that revenue fell nine per cent on the same period last year as market volatility had been “materially lower” than in the first half of last year.

Acting chief executive Charlie Rozes said: “It’s encouraging to see the benefits of our diversification strategy paying off, despite a mixed trading backdrop for our clients, driven by persistently low levels of market volatility in Q1 and Q2. While some of our businesses saw revenue weakness, others achieved strong results in the period.”

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