London pre-open: Stocks seen lower as Fed, BoJ stand pat; BoE in focus
London stocks were seen opening lower on Thursday, taking their cue from downbeat sessions in the US and Asia after the Federal Reserve and Bank of Japan stood pat on policy.
The FTSE 100 was expected to start 50 points weaker than Wednesday’s close at 5,911.
The Fed left interest rates unchanged at 0.25% to 0.50%, as expected, while Chair Janet Yellen struck a fairly dovish note and conceded the upcoming UK referendum was a factor in the decision.
“The Fed is running into some credibility issues,” said CMC Markets’ Jasper Lawler.
“The wash of hawkish talk from Fed members throughout May has been shown to be inappropriate in the context of the last payrolls report. The June meeting has seen the Fed, again, have to step back. Whilst the median dot plot estimate remains for two rate hikes this year, the shift of five members to just projecting just one, is a dovish development. FOMC participants also lowered their rate hike projections by 30 bp to a median 1.6% by the end of 2017.”
With the Fed and BoJ out of the way, investors in the UK will look to the Bank of England’s latest rate announcement at 1200 BST. The BoE is widely expected to leave interest rates and the asset purchase programme unchanged at 0.5% and £375bn.
In terms of data releases, UK retail sales are at 0930 BST, while in the US, CPI, the Philadelphia Fed survey and initial jobless claims are at 1230 BST.
Design, engineering and project management consultancy WS Atkins reported a 6% rise in revenue in its final results on Thursday, to £1.86bn.
The FTSE 250 firm posted underlying operating profit of £148.2m, up 10.5%, achieving its 8% margin target at the same time.
Underlying profit before tax was ahead of market expectations at £139m, up 14% on the prior year, with underlying diluted earnings per share ahead by 10.5% at 107.3p.
France-based electrical retailer Darty said full year group retail profits rose 24% to €93.1m with revenue up 4.1% to €3.6bn and like-for-like sales up 3.9%.
Adjusted profits before tax jumped 36% to €69.6m and adjusted earnings per share rose to 7.3 cents from 5.8 in 2015.
Darty said in May that its board had recommended shareholders approve a 170p-per-share takeover offer from French retailer Fnac. On that basis it decided not to recommend a final dividend.
Trading has remained subdued at clothing retailer N Brown with revenue down 0.2% in the first quarter, though management are confident of hitting their full year targets.
Chief executive Angela Spindler said a 1.6% decline in product sales was "satisfactory" when viewed against the challenging sector backdrop and was counterbalanced by a 3.4% increase in financial services revenue driven by new credit customers.