London pre-open: Stocks seen up as investors eye Fed policy announcement
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London stocks were set to edge higher in early trade on Wednesday following a positive close on Wall Street, as investors eyed the latest policy announcement from the Federal Reserve.
The FTSE 100 was called to open up around eight points.
Kathleen Brooks, research director at XTB, said: "The focus for financial markets will shift from US tech stocks to the FOMC meeting on Wednesday evening, when the Fed will announce its latest policy at 1900 GMT.
"This will be followed by a press conference, there will be no summary of economic projections or Dot Plot at this meeting.
"The market is pricing in virtually no chance of a rate cut at this meeting, and there is only a 45% of a single rate cut by the June meeting, according to the CME FedWatch tool. The market is expecting less than two rate cuts from the Fed this year, with interest rate expectations for 2025 mostly unchanged since the start of 2025.
"US interest rate expectations have been remarkably stable even though other central banks have seen bets on interest rate cuts increase in recent months."
In corporate news, manufacturing firm Dowlais said it agreed terms on a cash and share takeover by American Axle & Manufacturing.
AAM is offering 0.0863 new AAM shares plus 542p a share in cash and a further 2.8 pence in the form of a final cash dividend to be paid on completion.
Elsewhere, WH Smith reported a 4% jump in group revenue for the 21 weeks to 25 January as it hailed strong momentum in the travel business, but posted a drop in high street sales.
Chief executive Carl Cowling said: "The group has had a good start to the financial year, and we continue to see strong momentum across our core travel business.
"Our UK travel business has delivered another excellent performance across all channels, as we continue to make good progress with the rollout of our one-stop-shop for travel essentials format."