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(Alliance News) - Stocks in London are set for a muted open on Wednesday as traders await a US Federal Reserve monetary policy decision after the European close.
The Federal Open Market Committee will conclude its two-day meeting on Wednesday and announce its decision at 1900 BST. This will be followed by a press conference with Fed Chair Jerome Powell at 1930 BST.
"For now, it would appear the Fed is on autopilot through the summer, and that's fine for now with markets appearing to be giving it the benefit of the doubt. It wouldn't take much for this to change if the data starts to consistently surprise to the upside, in turn helping to push yields back up again," said Michael Hewson, chief market analyst at CMC Markets.
In early UK company news, Hipgnosis Songs Fund said it is planning a GBP150 million fundraise. Made.com expects to be worth GBP775 million on its London Stock Exchange debut, and fellow sofa seller ScS resumed dividend payments on the back of a brightened outlook.
IG says futures indicate the FTSE 100 index of large-caps to open up 13.32 points, or 0.2%, at 7,185.80 on Wednesday. The FTSE 100 closed up 25.80 points, or 0.4%, at 7,172.48 on Tuesday.
The quiet start in London follows a subdued session in Wall Street overnight. The Dow Jones Industrial Average closed down 0.3%, the S&P 500 down 0.2%, and the Nasdaq Composite down 0.7%.
"It wasn't a night to write home about overnight as investors adjusted positioning as they circled in the holding pattern ahead of tonight's FOMC decisions," commented Jeffery Halley, senior market analyst at Oanda.
In Asia on Wednesday, the Japanese Nikkei 225 index ended down 0.5%. In China, the Shanghai Composite was down 0.9%, while the Hang Seng index in Hong Kong was 0.5% lower. The S&P/ASX 200 in Sydney closed up 0.1%.
The dollar was stable ahead of Wednesday's US interest rate decision.
Sterling was quoted at USD1.4091 early Wednesday, firm on USD1.4088 at the London equities close on Tuesday as figures showed UK annual consumer price growth topped the Bank of England's 2% target for the first time in nearly two years.
The Office for National Statistics said the UK consumer price index jumped 2.1% on an annual basis in May, accelerating from 1.5% growth in April.
May's annual inflation print was the highest reading since the same 2.1% growth rate was registered in July 2019. Consumer price growth has remained below 2% ever since then. The Bank of England targets a 2% inflation rate.
The euro traded at USD1.2132, also firm on USD1.2127 late Tuesday.
Against the yen, the greenback was steady at JPY110.10 versus JPY110.08 as Japan's trade deficit was reduced in May from a year before. The country's trade deficit was chopped to JPY187.15 billion, about USD1.70 billion, in May, from JPY856.75 billion in May 2020.
Separate data, from the Cabinet Office, showed Japan's machinery orders grew in in April, though at a slower pace than expected. Machinery orders were 18% higher monthly, recovering some of March's lost ground when they had plunged 30% from February. Excluding volatile orders, they rose 0.6% in April, missing consensus forecasts of 2.7% growth.
Gold was quoted at USD1,860.79 an ounce early Wednesday, flat compared to USD1,860.80 on Tuesday. Brent oil was trading at USD74.57 a barrel, higher than USD73.70 late Tuesday.
In early UK company news, Hipgnosis Songs Fund unveiled plans for a placing to snap up a "substantial" pipeline of songs.
The music investment company is looking to raise GBP150 million via a share placing priced at 121p per share. The price represents a discount of 2.4% to Tuesday's closing price.
Hipgnosis expects to use the funds to buy a "substantial" pipeline of songs identified by its investment adviser. The pipeline contains "some of the most influential and successful songs of all time", it asserted.
"This raise gives our public markets investors, historic and new, the only chance for the next 12 months to get access to Hipgnosis' existing portfolio as well as a pipeline comprising some of the most important and successful songs of all time, at valuations that are highly attractive considering the continued explosive growth of streaming that will magnify future revenues considerably," said Merck Mercuriadis, founder of Hipgnosis as well as of The Family (Music), its investment adviser.
Online furniture retailer Made.com said it expects to have a market capitalisation of GBP775.3 million when it begins trading on London's Main Market on Wednesday.
The IPO price was set at 200p per share. The offer comprises of 50.0 million new shares to be issued by the firm, raising GBP100 million, and 46.9 million existing shares, meaning a total offer size of GBP193.8 million. Made.com will have 387.7 million shares on admission.
"A listing in London, where the business was founded, will enable us to accelerate our growth as we lead the development of the online furniture and homewares market as it moves online, both in the UK and internationally," said Chief Executive Philippe Chainieux.
Conditional dealings in Made.com shares will commence on Wednesday and unconditional dealings will follow on Monday. Made.com expects to be eligible for inclusion in FTSE indices.
Already listed peer ScS Group boosted its outlook and resumed payouts following a strong year-to-date performance.
Like-for-like order intake in the 46 weeks to June 12 was up 11% year-on-year. As the upholstered furniture and floorings retailer's stores reopened in April, it saw like-for-like orders explode in the period stretching from April 4 to June 12, up nearly five-fold - also noting that stores were shut for the majority of the same period a year ago.
As a result of strong trading, ScS now expects its full-year performance to top market forecasts. Further, it said it now has the confidence to recommence dividends, starting with an interim payout of 3.0p per share.
"The group has a robust balance sheet and the re-introduction of dividends today reflects the board's confidence in the business going forward. As such, and given the strength of the current order book, the board's outlook for FY22 is substantially better than current market forecasts," it said.
By Lucy Heming; lucyheming@alliancenews.com
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