London pre-open: Stocks seen a little higher ahead of Budget, FOMC

The FTSE 100 is seen starting 22 points firmer than Tuesday’s close at 6,162.

The Budget statement is at 1230 GMT, while the FOMC rate announcement is due after the European close, at 1800 GMT.

Investors will also eye the release of UK claimant count and the unemployment rate at 0930 GMT.

“Before today’s FOMC meeting we have the small matter of the latest UK unemployment and wages data, as well as the UK budget, with the pound coming under renewed pressure yesterday on the back of a survey which showed that the Brexit “leave” campaign was slightly ahead in the polls,” said Michael Hewson, chief market analyst at CMC Markets.

“Despite recent negative headlines about job losses in the manufacturing sector there hasn’t as yet been any evidence of this being reflected in the unemployment data, though that could well change in the near term. Expectations are for the January ILO unemployment rate to come in unchanged at 5.1%, while average earnings are expected to show a rise of 2%, still well above the rate of inflation.”

LSE and Deutsche Boerse agree on merger

The London Stock Exchange and Deutsche Boerse have agreed on a merger.

Under the terms of the merger, LSEG shareholders will be entitled to receive 0.4421 shares in a new holding company UK TopCo in exchange for each LSEG share and Deutsche Boerse shareholders will be entitled to receive one UK TopCo share in exchange for each DB share.

Assuming 100% acceptance of the Deutsche Boerse offer, the merger will result in LSEG shareholders owning 45.6% of UK TopCo and DB shareholders owning 54.4% of UK TopCo on a fully diluted basis.

The two companies said total recurring cost synergies of €450m a year are equivalent to approximately 20% of the combined group's 2015 adjusted operating costs of approximately €2.2bn.

Sales declined 3% to £1.37bn in the first half at Smiths Group as its medical and detection arms mostly offset the weakness engineering arm John Crane endured in oil and gas markets.

Saying expectations for the full year remained unchanged, the company lifted the half-time dividend 2% to 13.25p as pre-tax profits declined to £189m, with basic earnings per share down by the same degree to 35.2p.

Drug group Hikma Pharmaceuticals reported revenue of $1.44bn (£1.02bn) in its final results for 2015 on Wednesday, down 3% on what was an exceptionally strong 2014.

Its gross margin remained in line with 2014, at 56.8%, reflecting Hikma's cost control efforts across the business. A core operating profit of $409m was a 4% dip on 2014, or a 4% rise in constant currency.

The FTSE 100 group's board proposed a final dividend of 21 cents per share, making the total dividend of 32 cents per share in line with 2014. Hikma indicated expectations of $2bn-$2.1bn in revenue for the current year.