London pre-open: Stocks to rally ahead of Fed meeting

London stocks were set to jump at the open on Tuesday following a flat close in the previous session, as investors eyed the start of the Federal Reserve’s two-day policy meeting.

The FTSE 100 was called to open around 55 points higher.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Either the Federal Reserve doves are going seriously ahead of themselves, or there will be a big disappointment when the Fed will announce its policy decision tomorrow. Or... the Fed will align with the market and give investors want they want, to avoid creating further panic.

"The expectation of a 50bp is now assessed nearly 70% chance. The US 2-year further dived below the 3.53% level yesterday, the 10-year yield is hanging around 3.62% this morning and the US dollar index remains under a decent selling pressure, much intimidated by the rising bets for a 50bp cut from the Fed tomorrow.

"The reality is that, no one knows what the Fed will do right now. I still firmly believe that a 25bp cut would be the best option due to unalarming economic figures of the moment. It’s better to start slow and accelerate if needed. But I am also increasingly confused and think that the disappointment would be so massive that the Fed may - maybe - not dare giving the market just 25bp cut. And we also start hearing that some Democrats are putting fuel to the fire asking for a 75bp cut. So, it is in this atmosphere of high confusion that the Fed will start its two-day meeting today."

In corporate news, B&Q owner Kingfisher lifted the lower end of full-year profit guidance as it posted interim results in line with expectations.

The company said it now expected adjusted pre-tax profit of £510-550m, up from £490-550m. Pre-tax profit for the six months to July 31 rose 2.3% to £324m.

Japan’s health ministry has accepted for review a new drug application for GSK’s Blenrep blood cancer treatment, marking the third major regulatory filing acceptance for the drug.

This follows marketing authorisation application acceptance by the European Medicines Agency in July and by the Medicines and Healthcare products Regulatory Agency in the UK earlier this month.

British American Tobacco announced the appointment of Kingsley Wheaton as its chief corporate officer - a newly-created role responsible for advancing the company's ‘Sustainable Future’ strategy.

The FTSE 100 firm said the role would focus on tobacco harm reduction, transparent dialogue with regulators, and strengthening its sustainability credentials.

Alongside Wheaton’s promotion, BAT also announced several other leadership changes, including Luciano Comin as chief marketing officer, effective immediately.