MARKET PREVIEW: FTSE 100 seen higher after Fed comments
Financial bookmakers are expecting UK stocks to open higher after the Federal Reserve indicated no changes to its monetary policy in yesterday’s interest rate announcement. The FTSE 100 is set to open at 5,979, up 23 points (0.4 percent) from Tuesday’s close.
Following Tuesday’s policy meeting, the Federal Reserve said economic conditions in the US were improving and projected further gradual decline in the unemployment rate, which currently stands at three year lows.
The central bank again failed to mention another round of quantitative easing, but restated its intention to keep interest rates at near zero through 2014.
“We now have a clearer understanding of how the Fed is positioned,” said chief market strategist at IG Group Chris Weston.
“Whilst it upgraded certain wording to reflect the economic improvements - suggesting it sees ‘moderate’ rather than ‘modest’ economic growth - it still acknowledged that there are ’strains in the global financial markets’ and it is likely to keep rates low until late 2014.”
Today’s macroeconomic calendar includes US import and export indexes for February and a weekly inventories report from the Department of Energy.
Across the Atlantic, the Dow Jones Industrial Average (DJIA) rose 218 points (1.7 percent) to end the session at 13,177, the highest level since 2007. The broader S&P 500 index tacked on 25 points (1.8 percent) to close at 1,396.
Stocks in Japan took their cues from US markets with the benchmark Nikkei 225 index rallying 151 points (1.55 percent) reach 10,050. However, China’s Shanghai Composite Index slipped 43 points (1.8 percent) to 2,412.