London open: FTSE nudges lower ahead of Fed announcement

(Sharecast News) - London stocks nudged lower in early trade on Wednesday as investors eyed the latest policy announcement from the US Federal Reserve. At 0825 GMT, the FTSE 100 was down 0.1% at 8,525.80.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Calm has descended on financial markets after the AI upheaval, which triggered a wave of selling, with investors seeing sharp falls as a buying opportunity. Focus is switching to today's key Fed meeting and the direction of interest rates in the US. Rates being kept on hold is seen as a slam dunk prospect but there will be keen interest in chairman Jerome Powell's words about the future path ahead, particularly given recent jitters about the prospects of a rate hike this year, which still right now looks unlikely.

"The FTSE 100 is not set for much movement in early trade, with its tech-light make-up making it more immune to the current volatility and thanks to its defensive characteristics, it's still hanging near recent highs. The pound has strengthened slightly against the dollar, to above $.1.24 which may weigh a little on multinationals with overseas earnings. Brent Crude is trading lower, around $77 a barrel, as Trump's tariff threats are still causing jitters about the prospects for global growth.

"The direction of domestically focused stocks may hinge on sentiment surrounding Chancellor Rachel Reeves' speech later. She's determined to show she's going for growth in a big way and is planning to light a bonfire of red tape when it comes to planning regulation. Decisions on airport expansion, particularly a third runway at Heathrow, will be closely watched and could lift airline stocks, give the extra capacity it could provide."

The US rate announcement is due at 1900 GMT.

In equity markets, Fresnillo shot to the top of the FTSE 100 as the precious metals miner met guidance with silver output in 2024 and marginally beat expectations with gold production, with full-year profits more than doubling as costs fell and commodity prices jumped.

Manufacturing firm Dowlais surged after saying it had agreed terms on a cash and share takeover by American Axle & Manufacturing. AAM is offering 0.0863 new AAM shares plus 542p a share in cash and a further 2.8 pence in the form of a final cash dividend to be paid on completion.

WH Smith rallied after it reported a 4% jump in revenue for the 21 weeks to 25 January as it hailed strong momentum in the travel business, while high street sales dropped as expected.

The retailer confirmed earlier this week that it was considering a possible sale of the high street segment.

On the downside, Raspberry Pi tumbled even as the low-cost computer platform maker said it expected to make annual adjusted core earnings of at least $36m. The shares have gained more than 150% since the IPO so weakness could be down to some profit-taking, traders said.

Pennon slid as it said it was looking to raise about £490m in a rights offering.

Market Movers

FTSE 100 (UKX) 8,525.80 -0.09% FTSE 250 (MCX) 20,613.20 0.12% techMARK (TASX) 4,752.30 -0.22%

FTSE 100 - Risers

Fresnillo (FRES) 672.00p 2.28% Scottish Mortgage Inv Trust (SMT) 1,059.50p 1.68% International Consolidated Airlines Group SA (CDI) (IAG) 327.00p 1.33% Diploma (DPLM) 4,462.00p 1.23% United Utilities Group (UU.) 992.20p 1.22% 3i Group (III) 3,835.00p 1.19% Severn Trent (SVT) 2,508.00p 1.17% Melrose Industries (MRO) 602.80p 1.07% IMI (IMI) 1,963.00p 0.98% Ashtead Group (AHT) 5,254.00p 0.96%

FTSE 100 - Fallers

Diageo (DGE) 2,453.00p -1.68% Unilever (ULVR) 4,588.00p -1.23% Haleon (HLN) 373.30p -1.16% BP (BP.) 414.35p -0.96% Reckitt Benckiser Group (RKT) 5,178.00p -0.84% Coca-Cola HBC AG (CDI) (CCH) 2,796.00p -0.78% Vodafone Group (VOD) 67.84p -0.76% British American Tobacco (BATS) 3,151.00p -0.69% BAE Systems (BA.) 1,243.50p -0.60% Smurfit Westrock (DI) (SWR) 4,321.00p -0.55%

FTSE 250 - Risers

WH Smith (SMWH) 1,267.00p 6.47% CMC Markets (CMCX) 237.00p 4.87% Senior (SNR) 169.00p 2.42% Hays (HAS) 78.05p 1.96% Bank of Georgia Group (BGEO) 4,625.00p 1.87% Allianz Technology Trust (ATT) 436.00p 1.87% BlackRock World Mining Trust (BRWM) 490.00p 1.66% Baillie Gifford US Growth Trust (USA) 268.00p 1.52% Just Group (JUST) 164.00p 1.49% Schroder Oriental Income Fund Ltd. (SOI) 281.00p 1.44%

FTSE 250 - Fallers

Raspberry PI Holdings (RPI) 694.50p -6.15% FirstGroup (FGP) 158.00p -4.82% Discoverie Group (DSCV) 621.00p -4.17% Rathbones Group (RAT) 1,644.00p -2.72% Empiric Student Property (ESP) 81.00p -2.53% Greencoat UK Wind (UKW) 120.30p -2.35% Balfour Beatty (BBY) 440.40p -2.22% Marshalls (MSLH) 245.50p -2.19% Renishaw (RSW) 3,385.00p -2.17% AO World (AO.) 96.20p -2.14%