FTSE 100 watch: Footsie builds on gains as BOE hikes growth forecast

on Feb 2, 2017
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The UK benchmark index has perked up in today’s session, building on its morning gains, as the Bank of England (BOE) kept rates on hold and boosted its growth forecast for the current year. In individual movers, shares in Reckitt Benckiser (LON:RB) have spiked as the consumer goods group confirmed that it was in tie-up talks with baby formula maker Mead Johnson.

As of 12:26 GMT, the Footsie had added 41.51 points to stand 0.58 percent higher at 7,149.16. The blue-chip index has extended its earlier gains as the BOE held the bank rate at 0.25 percent and increased its central expectation for growth in the current year to two percent, further noting that it expects growth of 1.6 percent in 2018 and 1.7 percent in 2019.
Investors are also digesting a string of company news, including Reckitt Benckiser’s confirmation of media reports that it is in talks to buy Mead Johnson for $16.7 billion, with the potential deal expected to strengthen the UK group’s presence in the US and Asia.

“Reckitt Benckiser makes it a brace of companies whose share prices have defied traditional M&A reaction recently, rising on news of spending big to acquire,” Mike van Dulken, head of research at Accendo Markets, commented in a note, as quoted by Reuters. The consumer goods group’s shares are currently changing hands 3.70 percent higher at 7,083.00p.
Royal Dutch Shell (LON:RDSA) has been another notable Footsie riser despite posting a drop in fourth-quarter earnings, with investors instead focusing on the oil major’s improved cash flow and lower net debt. Shell’s shares have gained 2.07 percent to 2,181.31p so far today.
**The FTSE 100 index was 0.56 percent up at 7,147.15p as of 12:39 GMT on Thursday, February 2, 2017.**

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