London pre-open: Stocks seen higher as investors eye Fed, manufacturing data

London stocks were set for a firmer open on Wednesday, shrugging off a downbeat session in the US as investors awaited the latest rate announcement from the Federal Reserve and some key manufacturing data.

The FTSE 100 was expected to open 35 points higher than Tuesday’s close at 7,134.

Markit’s UK manufacturing purchasing managers’ index is at 0930 GMT. In the US, the ADP employment report is at 1315 GMT, while Markit’s manufacturing PMI is at 1445 GMT and ISM manufacturing is at 1500 GMT.

CMC Markets’ Michael Hewson said: “Today’s FOMC meeting, the first one of 2017 isn’t expected to produce any surprises despite recent comments from several US policymakers that raised the prospect that we could well see three rate rises this year, with the first potentially coming as soon as March. Fed officials are likely to want to be able to assess the effects of the move in December first.”

As far as the UK manufacturing data is concerned, Hewson said it is is expected to show a slight moderation to 55.9 from 56.1 as the cheaper pound continues to boost exports.

“The most recent CBI survey last week pointed to a decent January for manufacturing, despite pressure from rising prices, so the expectation is that today’s Markit numbers should reaffirm that.”

In corporate news, Mondi chief executive David Hathorn will retire from the paper and packaging company in July, with longtime fellow board member Peter Oswald promoted to replace him.

Oswald has been CEO of the Europe & International division since 2008 and worked for the company since 1992.

TalkTalk chief executive Dido Harding is to resign after seven years at the helm and Charles Dunstone will become executive chairman after stepping down as chairman of Dixons Carphone, from 1 May.

From 30 April, Lord Livingston will become the new chairman of Dixons Carphone after Sir Charles, who will remain a senior adviser to the company, leaves.

BT’s Openreach has appointed Sir Brendan Barber and Edward Astle as independent members of its newly formed board, created as part of an Ofcom-guided strategy to improve autonomy and independence at the telecoms infrastructure firm.

The company said Barber, former general secretary of the Trades Union Congress and current chair of Acas, and Astle, a former board member of National Grid, attended the inaugural meeting of the Openreach board on Tuesday.

Mike McTighe was appointed independent chairman of Openreach in December 2016, and a fourth independent non-executive was due to be announced imminently with a specific focus on customer service.