© Reuters. FILE PHOTO: British five pound banknotes are seen in this picture illustration taken November 14, 2017. REUTERS/Benoit Tessier/Illustration
By Amal S
(Reuters) -London’s FTSE 100 rose to near two-week highs on Wednesday, aided by gains in financial and mining stocks, while investors across the globe awaited the U.S. Federal Reserve’s policy decision due later in the day.
The blue-chip FTSE 100 climbed 1.4%, with base metal miners and banks leading the gains, while the domestically focused mid-cap index advanced 1.9%.
The Fed is expected to raise rates for the first time in three years later on Wednesday and give guidance on future tightening.
“Focus will be on Fed’s inflation forecast for next year and 2024, as that will provide insights into whether it sees (inflation) on the back of Ukraine crisis as something short or more structural,” said Stuart Cole, head macro economist at Equiti Capital.
Base metal miners jumped 1.9%, lifted by supply concerns and promises of more economic stimulus in top consumer China, while banks, which are likely to benefit in a higher interest environment, rose 1.6%. [MET/L]
“We had a big worry with China on rising COVID cases and lockdowns. Now Chinese authorities have injected a sense of relief into the markets,” Cole added.
With inflation rising to 40-year highs and data showing a drop in UK unemployment rate below pre-pandemic levels, investors are widely expecting the Bank of England to lift interest rates by 25 basis points on Thursday.
Among individual stocks, Avast fell 11.4% to the bottom of the FTSE 100 after Britain’s anti-trust regulator launched an in-depth probe into U.S. cybersecurity firm NortonLifeLock Inc’s $8.6 billion purchase of the company.
IG Group shed 1.6% after the online trading platform forecast full-year revenue to “moderately” exceed expectations, as the Ukraine crisis increases market volatility, but it predicted slower growth on its U.S. platform.
UK’s FTSE 100 jumps ahead of Fed decision as miners, financials advance
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.