FTSE 100 makes small gains ahead of Fed decision
It is expected that US interest rates will be held steady.
The FTSE 100 made meagre gains on Thursday as markets across the globe found trading sluggish ahead of the US Federal Reserve meeting.
London’s top flight index closed the day up 23.4 points, or 0.33%, at 7,140.68.
The rise came as its European peers stumbled in anticipation of the US Federal Reserve policy meeting, where it is expected that interest rates will be held steady.
David Madden, analyst at CMC Markets, added that a set of gloomy growth forecasts is weighing on sentiment.
“Stock markets are mixed as the bullish sentiment in the wake of the US midterms fades. The European Commission predicts that growth in the eurozone will cool in the next two years.
“The organisation also predicts that the UK economy will see the smallest growth in all of the EU countries in the next two years.
“Uncertainty over Brexit was cited as reason for the downbeat forecast, but the British economy has outperformed many eurozone nations in recent years, so a cooling of growth isn’t a surprise.”
In stocks, Burberry shares were up after the luxury fashion brand said its transformation plan is on track to deliver cost savings of £100 million this year, as it hailed an “exceptional” reception for its new head designer.
Cumulative cost savings reached £80 million, with the group confirming a goal for the full year of £100 million.
Adjusted operating profit fell by 4% on a reported basis but was up 8% at constant currency.
Comparable store sales rose 3% in the first half, as new creative director Riccardo Tisci took the helm.
Shares closed up 48.5p at 1,864.5p.
Sainsbury’s was also in the ascendancy, despite adding to fears over lacklustre consumer spending in the run up to Christmas, as it warned over an uncertain outlook amid “unprecedented times”.
The supermarket giant set the scene for a more difficult festive trading period as signs point to consumer retrenchment in the face of Brexit worries.
It came as Sainsbury’s reported a 40% slump in bottom-line profits to £132 million for the six months to September 22 after a raft of costs, including store restructuring and expenses related to its planned £12 billion merger with Big Four rival Asda.
Nevertheless, shares closed up 4.9p at 324p.
The pound, meanwhile, had a relatively uneventful day, closing down slightly versus the US dollar at 1.311 and flat against the euro at 1.149.
“GBP/USD is lower on the session, and the poor UK housing data contributed to the move. The Royal Institute of Chartered Surveyors house price balance fell to -10 in October – its lowest reading in six years.
“This adds to the series of negative stories surrounding the British property market,” Mr Madden said.
In Europe, Germany’s DAX was down 0.45% while France’s CAC was 0.13% lower.
A barrel of Brent crude was trading at 71.2 US dollars, down 1%.
The biggest risers on the FTSE 100 were Coca Cola HBC up 116p at 2,376p, Astrazeneca up 236p at 6,093p, Marks and Spencer up 11.4p at 312.3p and Micro Focus up 38.5p at 1,294p.
The biggest fallers on the FTSE 100 were BP down 15.3p at 529p, Paddy Power Betfair down 155p at 6,675p, Sage Group down 11.4p at 551.4p and WPP down 16.8p at 873.4p.