FTSE 100 watch: Footsie subdued as Fed hikes rate

on Dec 15, 2016

The UK benchmark index has fallen marginally into the red in today’s session, pressured by a retreat in precious metals miners which have tracked the gold price lower following the US Federal Reserve’s decision to hike interest rates. In individual blue-chip movers, shares in Centrica (LON:CNA) have spiked to the top of the FTSE 100 leaderboard after the British Gas owner hiked its full-year earnings guidance.

As of 12:29 GMT, the Footsie had shed 0.51 points to stand 0.01 percent lower at 6,948.68. Sentiment has been subdued today after the US Federal Reserve hiked interest rates by 25 basis points last night and signalled an accelerated pace of increases next year. The move has pressured shares in precious metals miners Fresnillo (LON:FRES) and Randgold Resources (LON:RRS), which have tracked the gold price lower following a spike in the US dollar. Fresnillo’s share price is currently 9.75 percent worse off at 1,065.00p, while shares in Randgold are changing hands 8.41 percent in the red at 5,440.34p.

London-listed banks meanwhile have gained ground today, with Royal Bank of Scotland Group (LON:RBS) leading the sector higher, having added 2.99 percent to stand at 223.90p.
“Rising interest rates are generally quite good for banks, depending on their specific situation, but in general they are sitting on large deposit bases and they can make a bigger spread as interest rates go up,” Simon Gergel, CIO of UK Equities at Allianz, told Reuters.
In individual blue-chip risers, Centrica’s share price has spiked 4.93 percent to 229.70p after the British Gas owner lifted its full-year earnings forecast, benefitting from better-than-expected cost savings as it continues to battle the lower oil price environment.
**The FTSE 100 index stood flat at 6,948.85 points as of 13:40 GMT on Thursday, December 15, 2016.**

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