FTSE slips ahead of US Fed meeting
The FTSE 100 dipped slightly this morning as investors awaited the outcome of the US Federal Reserve’s policy meeting for signs about upcoming interest rates.
London’s blue-chip index opened 0.25 per cent down, with mining stocks including Rio Tinto, Anglo American, Evraz and BHP Group falling between 0.5 per cent and 2 per cent.
BT led the index, hiking 4.2 per cent at market open, followed by a 2.3 per cent rise from Rolls Royce.
Retail investment platform Hargreaves Lansdown jumped 1.6 per cent as it expects profit for the year ending 30 June to be “modestly” above analyst estimates.
The FTSE 100 company said January “had been similar to previous lockdown periods with strong dealing volumes, significant engagement from clients and robust net new business and net new client numbers”.
The domestically focused mid-cap FTSE 250 index fell 0.3 per cent, dragged by consumer discretionary and financials stocks.
Outsourcer Capita rose 6.3 per cent after its plan to merge multiple businesses into two core operating divisions and to raise £700m from the sale of non-core assets.
US benchmark Treasury yields ticked up in early London trade, nearing recent 13-month highs as investors awaited the Federal Reserve’s latest policy decision.
The Fed will meet this afternoon to discuss so called “dot plot” plans to bring forward their expectations for rate hikes due to an improving US economy.
“The Fed meeting is likely to be the main focus of today’s session,” said David Madden, market analyst at CMC Markets.
“The US central bank is operating an extremely loose monetary policy as a way of providing support to the economy. In recent weeks, we have seen evidence the country is rebounding, unemployment is falling, while services and manufacturing levels are robust. It is encouraging that the economy is turning around but the prospect of higher growth also comes with the prospect of higher inflation.”