London pre-open: Stocks seen higher as Fed stands pat

Stocks in London were expected to open higher on Thursday, taking their cue from positive sessions in the US and Asia after the Federal Reserve stood pat on rates but suggested a hike would come later this year.

The FTSE 100 was called to open 44 points higher than Wednesday's close at 6,878.

On Wednesday the Fed kept interest rates unchanged at between 0.25% and 0.50%, with three members dissenting in favour of an immediate 25 basis points hike. The central bank said the case for a rate increase has strengthened, leaving the door open to a move by the end of the year.

The Federal Open Market Committee said: “The Committee judges that the case for an increase in the federal funds rate has strengthened, but decided, for the time being, to wait for further evidence of continued progress toward its objectives.”

CMC Markets’ Michael Hewson said: “There had been an expectation that whichever way the Fed went on the decision that it wouldn’t be unanimous, but it would appear for now that the dovish camp has won out on this occasion, however a December rise remains very much on the table, in an almost identical replay of last year, when the Fed also baulked in September only to subsequently act in December.”

On the data front, CBI industrial trends are at 1100 BST. In the US, initial jobless claims are at 1330 BST, with leading indicators, existing home sales and consumer confidence at 1500 BST.

In corporate news, Micro Focus confirmed full year revenue is still likely to be no better than flat compared to last year's.

In an announcement ahead of its annual shareholder meeting, the FTSE 100 company said revenue could fall as much as 2% on a constant currency basis after trading in the financial year to date remained consistent with previous management guidance.

Rolls Royce appointed Stephen Daintith of the Daily Mail as chief financial officer from 2017.

He will replace David Smith in the new year, who is leaving Rolls-Royce after three years to pursue other business interests.

Property, residential, construction and services company Kier Group posted its preliminary results for the year to 30 June on Thursday, falling in line with expectations as revenue grew 26% to £4.2bn, or 8% on a like-for-like basis.

The FTSE 250 firm’s underlying profit from operations was £150m - up 44% - which included a full-year contribution from Mouchel, an increased share of property joint venture results, and margin recovery supported by cost efficiencies.

Underlying earnings per share were up 11% at 106.7p, with the board proposing a 17% increase in the full-year dividend to 64.5p.

Pub group Mitchells & Butlers reported a drop in full year sales but a rise in the most recent eight weeks of trading, as it reiterated that full-year margins will be below the previous year.

In a pre-close trading update, the company said total sales in the 51 weeks to 17 September fell by 0.8%, with food sales down 1.4% and drink sales 0.1% lower.

Mitchells said margins will be below last year due to the acceleration of investment in the estate and wage inflation following the introduction of the National Living Wage in the second half.