FTSE 100 lingers in the red ahead of Fed meeting - British Herald
October 6, 2019
Money

FTSE 100 lingers in the red ahead of Fed meeting

– London’s main index see-sawed in early Wednesday trading as investors awaited the outcome of the U.S. Federal Reserve meeting to get a sense of how far policymakers in the world’s largest economy will go to tackle a global slowdown.

By 0746 GMT, the blue-chips were down 0.1%, while the more domestically-focussed midcap bourse added 0.1%. 

The Federal Reserve is set to conclude its latest policy meeting later in the session, with expectations that it will cut interest rates for the second time this year as it looks to cushion the economy from an ongoing trade war with China.

“The question facing the market is how many more (rate cuts) there are to come,” Markets.com analyst Neil Wilson wrote. “Are we at the end of the mid-cycle adjustment, or the early stages of a full-blown easing path? Will we get yet another flip-flop?” 

“Traders are increasingly less confident in the number of cuts the FOMC will carry out this year.”

This week has brought in more uncertainty to market participants and analysts who witnessed a more than 10% surge in crude prices after attacks on Saudi oil facilities shut 5% of global oil output.

The FTSE 100 is set to close this week in the red, after three consecutive weeks of gains.

On Wednesday, industrials weighed the most on the index, with losses in contractor BAE Systemsmand engine maker Rolls Royce after the British government ordered an investigation into the $5 billion buyout of defence company Cobham by a U.S. private equity firm. 

Cobham gave up 1% on the midcap bourse. 

Home improvement retailer Kingfisher gave up 2% after posting a fall in underlying earnings due to weak performance at its French business. 

Luxury brand Burberry, which has significantly outshone its European peers that have come under pressure due to the Hong Kong protests, climbed 1% after UBS analysts hiked price target while it downgraded the sector. 

Sirius Minerals lost another 10% on the midcap index after plunging over 50% on Tuesday when it cancelled a $500 million bond sale and delayed a project to mine for fertiliser under a national park in northern England. 

Another significant FTSE 250 faller was Metro Bank that slipped 5% after it flagged in a prospectus on Tuesday that it may incur significant expense relating to the resolution of an accounting error it disclosed earlier this year.

Small-cap Pendragon fell 9% to a more than seven-year low after it cancelled annual dividend and issued a weak annual forecast as deep price cuts to offload used car inventory pushed it to a first-half loss.

(Content & Photos Syndicated Via Reuters)

(Reporting by Muvija M in Bengaluru; Editing by Andrew Heavens)

Related Posts