London pre-open: Stocks to edge down after Fed, ahead of BoE

London stocks were set to edge lower at the open on Thursday as investors mulled the latest policy announcement from the US Federal Reserve and looked ahead to a decision from the Bank of England.

The FTSE 100 was called to open nine points lower at 7,621, after the Fed kept rates on hold overnight and poured cold water on the prospect of a rate cut in March.

CMC Markets analyst Michael Hewson said: "US markets also ended what was a strong month very much on a downswing, with the S&P500 posting its biggest one day fall since September, after the Federal Reserve kept rates unchanged, but in the statement came out less dovish than had been expected, with Fed chair Jay Powell leaning against the idea of a March rate cut during the ensuing press conference.

"As far as the statement was concerned, the reference to possible additional rate hikes was removed, while in its guidance the central bank stated that it does not expect it will be appropriate to cut rates until there is greater confidence inflation is moving sustainably towards 2%.

"The tone of this line in the guidance leant very much against the prospect of a March rate cut, a line that Powell kept very close to."

The BoE announcement is due at midday, with no change expected to rates.

Hewson said the main question will be around whether "resident hawks" decide to vote with the majority for no change and temper their hawkishness.

"Like the Fed last night, the main debate now remains on when we start to see rate cuts and not if," he said.

In corporate news, Shell reported a 93% fall in income attributed to shareholders in its fourth quarter, to £474m, as well as a 54% fall for the full year to £19.36bn.

The oil giant put the decline down to higher LNG trading and optimisation margins, favourable deferred tax movements, and higher production, offset by lower refining margins, lower margins from crude and oil products trading and optimisation, and higher operating expenses. Adjusted earnings for the year were 19% weaker at £68.54bn.

BT Group reiterated annual guidance as it reported flat adjusted earnings for the third quarter and a rise in revenues driven by higher prices.

The telecoms provider said adjusted core earnings for the three months to December 31 rose 1% to £2.03bn. Revenue was up 3% to £5.3bn.

On a nine-month basis adjusted revenue came in at £15.8bn, up 3% due to price increases and fibre-enabled product sales at its Openreach broadband unit and increased service revenue in its consumer division.

Africa-focused telecoms group Airtel Africa said it intends to launch a share buyback worth up to $100m after a strong underlying performance in the third quarter, though currency movements weighed heavily on growth.

Revenues at constant currency were up 21% year-on-year in the three months to 31 December, but reported revenues fell by 8.3%, mainly due to the devaluation of the Nigerian naira.