London pre-open: Stocks seen muted after Fed; avalanche of earnings in focus
London stocks were set for a muted open on Thursday as investors mull the latest policy announcement from the US Federal Reserve and wade through an avalanche of earnings.
The FTSE 100 was called to open six points lower at 7,010.
CMC Markets analyst Michael Hewson said: "US markets finished the day mixed, with the Nasdaq outperforming after the latest Fed decision moved the bond tapering argument onto Jackson Hole next month, while markets in Asia rebounded strongly on reports that Chinese regulators told firms that Chinese firms would be allowed to list in the US as long as they met listing requirements. The rebound in Asia doesn’t appear to be translating into a rebound in Europe with shares here set to open slightly lower.
"Last night’s Federal Reserve rate meeting saw the US central bank keep monetary policy unchanged, keeping, the level of bond buying at $120bn a month. The Fed did acknowledge that the economy had progress towards the goals need to look at tapering but there was still some way to go. The decision was unanimous."
In corporate news, Lloyds Bank swung to an interim profit before tax of £3.9bn as the company released £837m set aside for bad debts amid the Covid pandemic due to an improved UK economic outlook.
The profit compares with a £602m loss last year at the height of the crisis. Net income rose 2% to £7.6bn while the net interest margin, the difference between savings and lending rates, fell 9 basis points to 2.5%.
BAE Systems increased its dividend and announced a £500m share buyback as the arms and aerospace company reported a 61% increase in first-half profit.
Operating profit for the six months to the end of June rose to £1.3bn from £808m as revenue increased to £9.34bn from £9.18bn. BAE increased its interim dividend by 5% to 9.9p a share and said it would buy back £500m of its shares over the next 12 months.