LONDON (Alliance News) - UK stocks are set to open lower Thursday ahead of a meeting of Eurozone finance ministers to discuss Greece's debt crisis, while the US Federal Reserve gave a mixed policy announcement late Wednesday.
Despite a modest improvement in the US economic outlook, the Federal Reserve on Wednesday offered no explicit guidance indicating that it will soon raise US interest rates from zero.
Many market watchers thought the Fed would lay further groundwork for a rate hike as soon as September, but policy makers remained reluctant to tip their hand, even though US economic activity seems to be picking up after a second consecutive rough winter.
Only 2 of 17 Fed officials want to wait until 2016 to hike, but the decision to hold off for now was unanimous. A September rate hike is by no means off the table, as the Fed's "dot plot" graphic confirms most members want to see two modest rate hikes before year's end.
"These 'dot plots' unfortunately have never been a reliable guide to the glide path of rates in recent years, and it could be argued as to being the equivalent of licking your finger and putting it in the air to test the wind direction," says Michael Hewson, chief market analyst at CMC Markets.
The so-called dot path shows the FOMC members' expectations for future interest rates.
The Fed also cut its forecast for GDP this year to 1.8% to 2%, down from 2.3% to 2.7%, reflecting the brutal winter weather. The economy has "expanded moderately" since the winter contraction, but analysts say the Fed is keeping a close eye on developments in Europe, where a Greek default could de-stabilize the euro area.
IG says futures indicate the FTSE 100 to open lower at 6,658.4. The index closed down 0.4% at 6,680.55 on Wednesday with the backdrop of the Greek financial crisis continuing to put investors on edge.
Eurozone finance ministers are set to meet in Luxembourg on Thursday, but lawmakers and officials suggest any breakthrough is unlikely that could unlock an EUR7.2 billion aid tranche for Greece.
Eurogroup chief Jeroen Dijsselbloem, stressed that his fellow finance ministers would not be prepared to make much in the way of concessions: "If we conclude a deal that undermines the credibility of the eurozone, then that will explode in front of our eyes."
On Wall Street Wednesday, the DJIA, the S&P 500 and the Nasdaq Composite all closed up 0.2%.
In Asia Thursday, the Japanese Nikkei closed down 1.1%, the Hang Seng trades flat and the Shanghai Composite is down 1.2%.
Poundland Group reported a rise in profit in its recently-ended financial year as sales broke through the GBP1 billion mark for the first time and it continues expanding its store estate in the UK, Ireland and Spain.
The discount retailer reported a pretax profit in the year to March 29 of GBP36.2 million, a rise of more than half the GBP21.5 million made the year before. Revenue was GBP1.1 billion, up 12% on the GBP997.8 million reported the prior year, which it said was driven by contributions from both its store-opening programme and like-for-like sales growth.
In the corporate calendar there have been full-year results from European electrical goods retailer Darty, home shopping and education supplies company Findel, bathroom supplies company Norcros, investment firm Charles Stanley and Liontrust Asset Management. Electronics components distributor Premier Farnell releases an interim management statement.
In the economic calendar, there are UK retail sales at 0930 BST, eurozone first quarter labour cost data at 1000 BST and the latest uptake in the European Central Bank's long-term refinancing operation at 1015 BST. In the afternoon there are US initial and continuing jobless claims at 1330 BST and US inflation data at 1430 BST.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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