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LONDON (Alliance News) - UK stocks are set to open flat Thursday after the US Federal Reserve refused to commit to a September rate hike and ahead of another busy day in the corporate calendar with 14 of the FTSE 100 companies scheduled to release updates.
The Federal Reserve noted the strengthening US economy while leaving its benchmark interest rate unchanged Wednesday, setting the stage for a possible tightening of monetary policy in late 2015.
"The labour market continued to improve with solid job gains and declining unemployment," the US central bank said after a two-day meeting of its monetary policy committee.
Fed Chair Janet Yellen and other board members in recent months have publicly stated their expectations for a rate hike before the end of the year if the economy continues to show improvements and currently low inflation rises to a more normal level approaching 2%. Most Wall Street economists expect the Fed to begin tightening monetary policy at one of its next meetings - on September 17 or October 28.
The Fed said it "anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labour market and is reasonably confident that inflation will move back to its 2% objective over the medium term," repeating its past statements nearly word-for-word.
Wall Street closed higher Wednesday after the Fed statement. The DJIA and the S&P 500 both ended up 0.7% and the Nasdaq Composite closed up 0.4%.
IG says futures indicate the FTSE 100 a touch higher at 6,636.2. The index closed up 1.2% at 6,631.00 on Wednesday amid a flurry of corporate updates.
In Asia Thursday, the Japanese Nikkei is up 1.1%, the Hang Seng trades up 0.1% and the Shanghai Composite is up 0.6%.
Industrial production in Japan climbed a seasonally adjusted 0.8% in June, the Ministry of Economy, Trade and Industry said. That beat expectations for an increase of 0.3% following the 2.1% contraction in May.
In the UK corporate calendar, there are half-year results from FTSE 100-listed AstraZeneca, Royal Dutch Shell, Centrica, Intercontinental Hotels Group, Schroders, BAE Systems, Rolls Royce Holdings, Royal Bank of Scotland Group, Smith & Nephew, Diageo, Intu Properties and Merlin Entertainments. There are also updates from a host of FTSE 250-contituents including Henderson Group, Inchcape and Laird. BT Group releases first quarter results and Babcock International Group releases a trading update.
In the economic calendar, there are German unemployment data at 0855 BST. The European Central Bank will publish its economic bulletin at 0900 BST, before European business sentiment survey results at 1000 BST. In the afternoon are German inflation data at 1300 BST followed by US second quarter GDP at 1330 BST.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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