London pre-open: Subdued start expected as UK Budget and Fed meeting loom

UK stock markets are set for a quiet start on Wednesday morning as investors await two key risk events - the UK Budget statement and the Federal Reserve's latest policy decision.

City sources predict the FTSE 100 will open more or less flat on Tuesday's close of 6,837.61.

"The UK Budget and the FOMC are all anyone in the markets will want to talk about today as the two announcements dominate in terms of economic announcements," said analyst James Hughes from Etoro.

The market reaction to the Budget, due at 12:30, is expected to be only small, though it will give a chance to see where the Conservatives are placed ahead of the General Election in May.

As such, the Fed meeting (18:00) will likely be in more focus given recent speculation that policymakers will drop the term 'patient' when referring to the first rate hike.

"We expect the key sentence that the Fed can afford to be 'patient' in normalising monetary policy to be removed from the statement. This will not signal an imminent hike but underscore that a rate hike is now on the agenda but timing will be data dependent," said analysts at Danske Bank.

Stocks to watch

Oil and gas outfit BG Group has announced first oil from its part-owned Knarr field in the North Sea offshore Norway. Knarr, operated and 45%-owned by the FTSE 100 group, is estimated to contain around 80m barrels of oil equivalent and have a production life of at least 10 years.

Galliford Try has won a place as one of several companies on a £3.9bn public sector framework contract for the south of England. The FTSE 250 housebuilding and construction group has been picked as one of six contractors who can win jobs across all three parts of the Southern Construction Framework.

IMI has announced it will appoint Lord Smith of Kelvin as its new chairman following Roberto Quarta’s decision to step down. The shuffle will come into effect after the company’s annual general meeting, which takes place 7 May 2015.

Real estate giant British Land is pumping £50m into Meadowhall to refurbish the Yorkshire shopping centre as the retail destination celebrates its 25th birthday this year. The refurbishment, set to start in autumn 2015 and finish by the end of 2017, will create distinct districts within the centre, the company said.