London open: Stocks slightly higher ahead of Fed decision

Stocks are modestly higher in early trading even as investors wait on the US central bank's policy announcement later in the day.

Helping to bolster sentiment, overnight US technology giant Alphabet posted record quarterly profits on the back of strong ad sales, boosting its share price by 5% in pre-market trading.

As for the Fed, no actual changes on policy settings are anticipated, but some economists are hoping that policymakers will offer more details on just how long it might be until they start shifting towards reducing bond purchases or so-called 'tapering'.

Nevertheless, any rise in interest rates was not expected to materialise until 2021 - if then.

Against that backdrop, as of 0911 BST the FTSE 100 was up 0.19% or 12.9 points at 6,957.87, while the second-tier index was gaining 0.42% or 94.62 points to 22,519.5.

Jeffrey Halley, Senior Market Analyst, Asia Pacific, OANDA, told clients: "Investors continue to reshuffle exposure ahead of today's US FOMC meeting, with equities trading sideways, the US Dollar rising modestly, and the long end of the US yield curve steepening.

"The scale of the shuffle, though, hints at caution and not panic. Assuming that the FOMC stays resolutely "on message," I expect buy everything business as usual to return shortly thereafter."

No major economic reports are scheduled for release in the UK.

A reading on GfK's German consumer confidence index for May underwhelmed analysts, coming in at -8.8 which was down from -6.1 in April and below forecasts for an improvement -4.2.

In France, INSEE reported that its confidence index as unchanged in April from the month before at 94.0 (consensus: 93.0).

Pantheon Macroeconomics's Claus Vistesen labeled the reading on the French index as "decent, but still far away from pre-virus levels".

LSE Group reports "good" trading, Lloyds reverses credit provisions

London Stock Exchange Group said it had a good first quarter as it reported a 4% increase in its favoured profit measure driven by growth in data and analytics and capital markets transactions. Gross profit excluding currency fluctuations and a deferred revenue adjustment rose 4% to £1.54bn in the three months to the end of March from a year earlier as total income excluding recoveries rose 3.9% to £1.68bn. Reported gross profit fell 0.5% and reported income fell 1.2%. All the figures exclude the acquisition of Refinitiv in January.

Lloyds Bank reported better than expected first quarter profits after releasing £459m set aside for potential Covid-related bad loans, reflecting an improved economic outlook, in the last set of results for outgoing chief executive António Horta-Osório. The bank said pre-tax profits came in at £1.9bn compared with £74m a year ago and against analysts forecasts of £1.1bn. Results were helped by a net impairment credit of £323m in the quarter, as Lloyds released £459m previously set aside to deal with the coronavirus pandemic.

British American Tobacco said it was confident about hitting its 2021 targets after a good start to the year for the cigarette and smoking alternatives company. The FTSE 100 company said its new categories business had strong growth in new customers, sales volumes and market share so far in 2021. In a statement for its annual general meeting BAT said it was confident the division would achieve its target of £5bn revenue by 2025. Combustible tobacco products, including cigarettes, had good revenue growth with strong pricing partly offset by geographic mix as emerging markets recover from Covid-19.

Reckitt Benckiser reported group like-for-like net revenue growth of 4.1% to £3.51bn in its first quarter on Wednesday, with like-for-like growth in its hygiene division standing at 28.5%. The FTSE 100 consumer products giant said its health operations saw a like-for-like decline of 13%, meanwhile, as its nutrition unit turned in a like-for-like decline of 7.4%. It left its outlook for 2021 unchanged, with the board saying the company remained on track with its medium-term goals.

Advertising giant WPP posted organic first quarter sales growth on a comparable basis of 3.1%, easily outpacing analysts' estimates for a dip of 0.37%. First quarter revenues on the other hand printed a tad below forecasts, coming in at £2.9bn (consensus: £2.98bn).

Homebuilder Persimmon said on Wednesday that its year-to-date forward sales position had improved 23% year-on-year to £3.0bn, despite the impacts of the Covid-19 pandemic. That compared to roughly £2.4bn at the same time a year ago. The FTSE 100-listed group's average selling price for homes sold to private owner-occupiers in the forward order book came to £252,000, up from £244,500 twelve months earlier, with Persimmon stating customer inquiry levels remained "encouraging" throughout the year-to-date as its average private sales rate came in "well ahead" of 2020.

Market Movers

FTSE 100 (UKX) 6,968.06 0.33%
FTSE 250 (MCX) 22,536.94 0.46%
techMARK (TASX) 4,348.58 0.21%

FTSE 100 - Risers

Lloyds Banking Group (LLOY) 45.00p 3.27%
WPP (WPP) 977.40p 2.78%
Persimmon (PSN) 3,226.00p 2.51%
Barratt Developments (BDEV) 787.20p 2.31%
Berkeley Group Holdings (The) (BKG) 4,662.00p 1.92%
Legal & General Group (LGEN) 276.60p 1.65%
Associated British Foods (ABF) 2,341.00p 1.65%
NATWEST GROUP PLC ORD 100P (NWG) 204.30p 1.59%
M&G (MNG) 214.70p 1.56%
BP (BP.) 299.70p 1.49%

FTSE 100 - Fallers

Sainsbury (J) (SBRY) 235.80p -2.60%
Fresnillo (FRES) 865.20p -2.41%
Reckitt Benckiser Group (RKT) 6,462.00p -1.88%
Hikma Pharmaceuticals (HIK) 2,298.00p -0.99%
Flutter Entertainment (CDI) (FLTR) 15,490.00p -0.99%
Croda International (CRDA) 6,800.00p -0.93%
Smith (DS) (SMDS) 411.70p -0.89%
Spirax-Sarco Engineering (SPX) 12,100.00p -0.82%
Melrose Industries (MRO) 166.25p -0.69%
Admiral Group (ADM) 3,149.00p -0.66%

FTSE 250 - Risers

Grafton Group Ut (CDI) (GFTU) 1,180.00p 8.46%
888 Holdings (888) 450.80p 4.64%
ITV (ITV) 120.30p 3.22%
Frasers Group (FRAS) 516.50p 2.89%
TUI AG Reg Shs (DI) (TUI) 445.00p 2.70%
ICG Enterprise Trust (ICGT) 1,124.00p 2.55%
Vistry Group (VTY) 1,267.00p 2.47%
Hammerson (HMSO) 39.90p 2.31%
Crest Nicholson Holdings (CRST) 421.20p 2.13%
Virgin Money UK (VMUK) 199.65p 2.04%

FTSE 250 - Fallers

Travis Perkins (TPK) 1,471.50p -8.57%
Dixons Carphone (DC.) 150.00p -4.64%
Rank Group (RNK) 188.60p -2.28%
Hochschild Mining (HOC) 193.60p -2.07%
Sirius Real Estate Ltd. (SRE) 97.30p -2.01%
AJ Bell (AJB) 428.40p -1.65%
Aston Martin Lagonda Global Holdings (AML) 1,986.50p -1.46%
Centamin (DI) (CEY) 111.60p -1.41%
NCC Group (NCC) 271.50p -1.27%
Plus500 Ltd (DI) (PLUS) 1,459.50p -1.25%