LONDON (Alliance News) - UK stocks are indicated to open higher Thursday after the US Federal Reserve removed the word "patient" from its guidance but gave no indication of a summer rate hike, which is when some analysts had expected the central bank to make the move.
The Fed said Wednesday that a hike in its benchmark interest rate "remains unlikely" for the central-bank's April 29 meeting in Washington, but said nothing about the following meeting in June. In a statement following its second regular meeting of 2015, the Fed dropped its recent outlook of being "patient in beginning to normalize" monetary policy from its unprecedented near-zero rate, in place for nearly seven years.
The Fed "anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labour market and is reasonably confident that inflation will move back to its 2% objective over the medium term," the statement said.
"The hawks will argue that yesterday's move frees their hand to raise rates when it suits, which is true, but it doesn?t bring the prospect of a rate rise any closer, and it also obscures the fact that the central bank revised down its growth outlook, and slashed its inflation forecasts for this year, to 0.6% to 0.8%, from 1% to 1.6%," says Michael Hewson, chief market analyst at CMC Markets
IG futures point to a higher opening for the FTSE 100 at 6,967.1. The index closed up 1.6% at 6,945.20 on Wednesday.
Wall Street closed strongly Wednesday after the Fed statement, with the DJIA ending up 1.3%, the S&P 500 up 1.2% and the Nasdaq Composite rising 0.9%.
In Asia Thursday, the Japanese Nikkei closed down 0.4%, while the Hang Seng trades up 1.2% and the Shanghai Composite is flat.
In the corporate calendar fashion retailers Next and Ted Baker release full-year results as does high-end real estate adviser Savills, technology company Premier Farnell, and oil producers Ophir Energy and EnQuest. Housebuilder Crest Nicholson issues an interim management statement.
In the economic calendar, the European central bank issues its economic bulletin at 0900 GMT, before it announces the take-up of its targeted long-term refinancing operation at 1015 GMT. In the afternoon the focus is on the US with initial and continuing jobless claims released at 1230 GMT, and the Philadelphia Fed manufacturing survey at 1400 GMT.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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Crest Nicholson (CRST)
Enquest (ENQ)
Next (NXT)
Savills (SVS)