By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- U.K.'s FTSE index dropped on Wednesday,
with mining firms leading the way south, as investors waited for
the quarterly inflation report from the Bank of England and whether
the central bank will reveal a framework for forward guidance.
The benchmark lost 0.5% to 6,573.93, building on a 0.2% loss
from Tuesday.
The major focal point in London in Wednesday's trade was the
first inflation report from the Bank of England with Governor Mark
Carney at the helm. Market participants were eagerly awaiting news
on if or how the central bank will deploy forward guidance.
"Carney is widely tipped to announce some form of forward
guidance alongside the inflation report but what form this guidance
takes remains uncertain," analysts at Deutsche Bank said in a
note.
"DB expects 'loose-form' guidance from the bank, rather than an
explicit time or data-based 'pre-commitment'. An example of
something that they could say in a statement would be: 'The Bank
intends to keep interest rates at their current level or below for
a prolonged period (ECB-esque), and at least until the level of
economic output has well surpassed its previous peak,'" they
said.
The pound (GBPUSD) was also lower ahead of the report, trading
at $1.5302.
Among notable movers on the stock markets, shares of TUI Travel
PLC slid 5.1% after the travel agency reported an operating loss
for the nine-month period to June 30.
Shares of Randgold Resources Ltd. (GOLD) shaved off 3.5% after
the gold miner reported second-quarter profit below expectations.
Other miners were also lower as most metals prices declined.
Heavyweight Rio Tinto PLC (RIO) dropped 1.8% and BHP Billiton PLC
(BHP) fell 0.8%.
On a more upbeat note, shares of Old Mutual PLC jumped 4.2%
after the insurance firm reported a rise in first-half pretax
profit and funds under management.
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