London pre-open: Stocks seen higher; FOMC in focus

London stocks were expected to open higher on Wednesday ahead of the Federal Reserve rate announcement and as Asian markets got a boost from rising stimulus expectations.

The FTSE 100 was set to open 16 points higher than Tuesday’s close at 6,740.

CMC Markets’ Michael Hewson said; “Europe’s markets look set to open higher this morning on reports from Japanese media that a new stimulus package of measures from the Japanese government could well amount to over 25trn yen, and could be announced today. It should be noted that this has come 24 hours after Japanese markets sold off on reports that any package could well fall short of expectations, after comments from finance minister Taro Aso earlier this week.”

On the macroeconomic calendar, the first release of second-quarter UK GDP is at 0930 BST.

“It almost seems like an irrelevance to talk about the first snapshot of UK Q2 GDP given recent events as a result of the Brexit vote just over a month ago, but this could be as good as it gets for a while for the UK as we get our first look at these numbers today,” Hewson said.

In the US, durable goods orders are at 1330 BST and pending home sales are at 1500 BST, while the Fed’s rate announcement is at 1900 BST.

In corporate news, services group Capita said the UK decision to leave the European Union had increased uncertainty, particularly in the financial services sector, and it was “continuing to experience some delays in decision making in the short term”.

However, it added that it expected this to be “more than offset in the medium-term by incremental opportunities that arise as clients respond to the impacts of the UK leaving the EU”.

Capita made first half pre-tax profits of £186.1m from £146m last year boosted by contract expansion and growth from trading businesses.

ITV lifted external revenue 11% to £1.5bn in the first half of the year, driven by non-advertising revenue as it cautioned that net ad revenue (NAR) is likely to be down around 1% in the first nine months of the year.

But with strong growth from its production and online arms, cash flow was healthy enough to increase the interim dividend 26% to 2.4p