FTSE 100 preview: Index set for positive start ahead of Fed policy decision

on Oct 28, 2015

The FTSE 100 is expected to open higher today as investors look ahead to the conclusions of the US Federal Reserve’s policy meeting and a string of interim updates from blue-chip companies.

The UK’s benchmark index finished on the back foot yesterday after a worse-than-forecast slowdown in third quarter UK economic growth. Recovering from the 51.75-points decline, the Footsie is estimated to add four points this morning, opening at 6,369 points.
In company earnings, lender Lloyds Banking Group (LON:LLOY) and drugmaker GlaxoSmithKline (LON:GSK) are due to release their third-quarter results. Today’s corporate calendar also includes interim trading updates from insurer Standard Life (LON:SL), clothing retailer Next (LON:NXT) and cigarette maker British American Tobacco (LON:BAT). Investors will further digest Barclays’ (LON:BARC) announcement that it had appointed Jes Staley as the bank’s news chief executive officer.
Also in focus today will be the US Federal Reserve, which releases its post-meeting statement at 18:00 GMT. Economists predict the central bank will keep rates unchanged at 0.25 percent amid low inflation and concerns about the risks arising from a slowdown in emerging markets. Ahead of the Fed’s policy announcement, the US will see economic data on weekly mortgage applications and advance goods trade balance published. In the Eurozone, GfK’s forward-looking consumer confidence survey is expected to show sentiment declined in November.
US stocks closed marginally lower yesterday, under some pressure from disappointing data, as investors awaited key earnings reports and today’s Fed statement. The Dow Jones Industrial Average fell 0.24 percent to 17,581.43 points, the S&P 500 declined 0.26 percent, to 2,065.89, while the Nasdaq edged 0.09 percent lower to finish the session at 5,030.15.
Asian stocks slipped in early trading today, but losses were capped by caution ahead of the Fed’s policy decision. By 06:57 BST, the MSCI’s broadest index of Asia-Pacific shares outside Japan had lost 0.53 percent to 528.96 points. Meanwhile, Tokyo’s Nikkei 225 was 0.67 percent higher at 18,903.02, bucking the broader Asian market trend on bargain hunting following the previous day’s fall.

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