London open: Stocks rise ahead of FOMC interest rate decision

London stocks advanced ahead of UK employment data and the Federal Reserve’s decision on interest rates.

Data from the Office for National Statistics at 0930 GMT is expected to show UK employers added 150,000 jobs in the three months to October. In the same period the unemployment rate held at 5.3%, according to analysts’ estimates.

Average weekly earnings in the quarter to October are forecast to rise 2.5% while jobless claims in November are projected to increase by 800.

The main event, however, comes after the UK market closes with the Fed’s policy announcement. The US central bank is widely expected to raise interest rates for the first time in nearly a decade by 25 basis points.

“The question of when the Fed will eventually raise interest rates has been discussed in great depth for the majority of this year and even now, while the markets are all but convinced it will happen today, people are very split on whether it should in fact happen,” said Craig Erlam, senior market analyst at Oanda.

“The main argument against a rate hike has come from a lack of inflation in the US and with the growing divergence in monetary policies with other central banks, there is a good chance that this could remain low over the next year or so.”

However, the Fed is looking to introduce gradual hikes in interest rates to soften the blow if inflation picks up rapidly, Erlam added, saying he thinks this would be “a smart approach”.

Elsewhere, Eurozone service activity growth eased in December, according to Markit’s preliminary estimate. The purchasing managers’ index fell to 53.9 this month from 54.2 in November, missing forecasts of 54. A reading above 50 signals expansion while a level below that indicates a contraction.

In company news, Astrazeneca rallied on news it will buy the core respiratory business of Takeda Pharmaceutical Company for $575m (£382m).

SuperGroup surged after reporting strong first half trading with positive sales growth.

Rolls Royce jumped after splitting out its divisions and reshuffling its senior management team, in what it said is the first step in a “wide-ranging” restructuring programme.

Anglo American declined after Societe Generale downgraded the stock to ‘sell’ from ‘hold’ and slashed the price target to 250p from 530p, saying things could get worse before they get better.

Meanwhile, oil prices headed south with Brent crude down 1.8% to $37.75 per barrel and West Texas Intermediate down 1.4% to $36.81 per barrel at 0912 GMT.

Market Movers

FTSE 100 (UKX) 6,028.16 0.17%
FTSE 250 (MCX) 17,010.92 0.07%
techMARK (TASX) 3,136.75 0.13%

FTSE 100 - Risers

Pearson (PSON) 736.00p 4.10%
Shire Plc (SHP) 4,278.00p 2.30%
Dixons Carphone (DC.) 486.00p 1.95%
Rolls-Royce Holdings (RR.) 550.50p 1.94%
BP (BP.) 342.35p 1.38%
Ashtead Group (AHT) 1,113.00p 1.18%
Admiral Group (ADM) 1,671.00p 1.09%
Vodafone Group (VOD) 211.50p 0.95%
AstraZeneca (AZN) 4,429.50p 0.88%
GlaxoSmithKline (GSK) 1,319.50p 0.84%

FTSE 100 - Fallers

Tesco (TSCO) 145.35p -2.65%
Anglo American (AAL) 264.20p -2.55%
Morrison (Wm) Supermarkets (MRW) 144.70p -1.63%
ARM Holdings (ARM) 1,035.00p -1.62%
Marks & Spencer Group (MKS) 455.20p -1.60%
Sainsbury (J) (SBRY) 245.40p -1.56%
Meggitt (MGGT) 357.20p -1.33%
Mondi (MNDI) 1,312.00p -1.06%
Glencore (GLEN) 81.51p -1.04%
SSE (SSE) 1,436.00p -0.97%

FTSE 250 - Risers

Supergroup (SGP) 1,707.00p 12.60%
Acacia Mining (ACA) 169.10p 7.09%
Aldermore Group (ALD) 214.90p 4.57%
Bwin.party Digital Entertainment (BPTY) 121.00p 3.68%
OneSavings Bank (OSB) 349.60p 2.82%
Fidessa Group (FDSA) 1,979.00p 2.54%
Redrow (RDW) 454.40p 2.18%
esure Group (ESUR) 243.70p 1.97%
Domino's Pizza Group (DOM) 987.50p 1.91%
Moneysupermarket.com Group (MONY) 351.20p 1.86%

FTSE 250 - Fallers

Kaz Minerals (KAZ) 87.20p -5.98%
Vedanta Resources (VED) 275.10p -4.64%
Premier Oil (PMO) 46.89p -3.70%
BTG (BTG) 652.50p -2.17%
Aveva Group (AVV) 1,520.00p -1.94%
Debenhams (DEB) 74.50p -1.91%
Drax Group (DRX) 207.00p -1.80%
Brown (N.) Group (BWNG) 315.70p -1.68%
Diploma (DPLM) 718.50p -1.58%
Ocado Group (OCDO) 326.40p -1.51%