FTSE Trading Sideways As Central Bank Decisions Come In – BoJ Hikes, RBA Holds, Fed & BoE Pending

London's stock market moved with cautious sentiment as the FTSE 100 index saw a slight rise, with eyes on central bank movements across the globe. By 1:30pm on Tuesday, the blue-chip index had rise by 8 points or 0.1% to 7,730.90.

Markets are entrenched in a contemplative mood, digesting Japan's landmark interest rate hike while bracing for upcoming policy announcements from both the US Federal Reserve and the Bank of England. The FTSE spent much of the morning session in the negative, before making a mini push post midday.

Japan's move to raise interest rates for the first time in nearly two decades was a pivot of historical proportions. The Bank of Japan shifted their benchmark rate up from negative territory at -0.1% to a range between zero and 0.1%. This decision marked the end of an extraordinary negative rate policy that had been in place since 2016 to invigorate the Japanese economy. The yen rallied on the announcement, reflecting the market's appetite for the nation's assertive stance on economic growth.

The ripple effects of Japan's decision were observed globally, yet it also came at a time of celebration for the Japanese market, with the Nikkei 225 reflecting strength as the best performing major market over the last year, boasting a remarkable 45% gain. This contrasted with hesitancy in other regions as investors awaited moves by other central banks.

In other financial news, the Reserve Bank of Australia held rates steady (cash rate at 4.35%) , conveying confidence in the current monetary policy paths. Meanwhile, corporate strategies also hit the headlines, as Unilever announced its plan to offload the ice cream division by 2025, along with a significant workforce reduction of 7,500 jobs in a sweeping restructuring plan which saw ULVR rise strongly in the early AM.

Not all the news has been buoyant so far. Crest Nicholson's stock suffered a downturn as the company tackled structural issues, with a forecast that build defects might result in costly rectifications up to £15 million. DFS, the furniture retailer, also trimmed its profit and revenue expectations in response to waning market demand. These concerns were manifest on the stock market with shares dipping following the announcements.

Markets remained cautious as they sought to navigate a maze of central bank policies and corporate announcements in what is so far a bit of see-saw session. With eyes set on the decisions by the Fed and BoE later in the week, it will take something of note to shift sentiment.