LONDON (Alliance News) - London share prices are set to open higher Wednesday, with the market mainly focused on the conclusion of the US Federal Reserve meeting late in the day, but before that, investors will keep an eye on the presentation of the UK government budget and publication of Bank of England minutes.
IG futures indicate the FTSE 100 to open 5 points higher at 6,842.1. The index closed Tuesday up 0.5% at 6,837.61 for a second consecutive day. Even though stock indices in Europe and the US retraced some of the strong gains made on Monday, London's blue-chip index was supported by oil-related stocks and miners after months of under-performance, with oil prices still remaining under pressure.
The Bank of England releases the minutes from its most recent monetary policy committee meeting at 0930 GMT, while Chancellor of the Exchequer George Osborne is set to present the UK's government budget at 1230 GMT. He is expected to announce further measures to help investment in the North Sea and a further shakeup of the annuities market in his speech to Parliament.
Craig Erlam, senior analyst at Oanda, believes that, while in recent years the annual budget hasn't really been viewed as much of an event for the financial markets, "this budget is a little different as it comes only weeks before the general election - the tightest we?ve seen in years ? the outcome of which could have profound implications for both the UK and Europe."
"A Conservative win would bring with it the uncertainties of a referendum on EU membership in the next couple of years, something UK exporters will be quite worried about," Erlam adds.
The Fed's Open Market Committee meeting ends at 1800 GMT, with a press conference by Chair Janet Yellen starting at 1830 GMT. Focus will be on whether the FOMC removes its language about being "patient" before raising interest rates.
"In effect, the removal of the word would effectively signal an imminent rate hike, potentially as early as June. If that happens, I think investors will panic as it would signal the beginning of the end of this low-yield environment, in the US at least," says Erlam.
Wall Street ended mixed Tuesday. The DJIA closed down 0.7%, the S&P 500 ended down 0.3% and the Nasdaq Composite outperformed, up 0.2%.
Brent crude is quoted at around USD53.05 a barrel Wednesday, and US benchmark West Texas Intermediate is quoted at USD42.58 a barrel. Gold is quoted early Wednesday at USD1,147.83 an ounce.
In Asia on Wednesday, the Japanese Nikkei 225 closed up 0.6%.
Japan posted a merchandise trade deficit of JPY424.598 billion in February, the Ministry of Finance said on Wednesday, marking an annual improvement of 47%. The headline figure beat expectations for a shortfall of JPY986.6 billion following the JPY1.179 trillion yen deficit in January.
Meanwhile, the Hang Seng trades up 1.2% and the Shanghai Composite is trading up 2.0%.
BG Group early Wednesday said it has produced its first oil from the Knarr field in the North Sea offshore Norway. The oil and gas producer said the Petrojarl Knarr floating production, storage and offloading vessel had started production from the Knarr oil field in the North Sea, offshore Norway. The vessel has a production capacity of 63,000 barrels of oil equivalent per day and a storage capacity of 800,000 barrels.
BG Group is the operator of the field with a 45% working interest. Partners comprise Idemitsu Petroleum Norge, with a 25% interest, Wintershall Norge with a 20% interest and DEA Norge AS with a 10% interest.
Pharmaceutical giant AstraZeneca Wednesday said it had received positive top-line results from Phase III studies into investigative drug PT003 for the treatment of Chronic Obstructive Pulmonary Disease.
The two 24-week studies looked at whether the treatment improved lung function in patients with the disease. PT003 is a twice-daily fixed-dose combination of glycopyrronium, a long-acting muscarinic antagonist, and formoterol fumarate, a long-acting beta-2 agonist. The treatment is delivered using a pressurised metered dose inhaler developed by Pearl Therapeutics, which was acquired by AstraZeneca in 2013.
The partners in the Horse Hill well in southern England reported finding additional net oil pay.
Also in the economic calendar Wednesday, the UK ILO unemployment rate is due at 0930 GMT, while eurozone trade balance is at 1000 GMT. In the US, EIA crude oil stocks change is at 1430 GMT.
In the corporate calendar Wednesday, Phoenix Group Holdings, Hochschild Mining, Bioquell, UTV Media, Cape and Burford Capital released full-year results. Smiths Group published half-year results, while Imagination Technologies Group issued a trading statement.
By Daniel Ruiz; danielruiz@alliancenews.com
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