London Slightly Up, Awaiting Fed Decision

Ivaylo
20 Sep, 2001
New York City

Traders expect the Fed announcement to keep interest rates unchanged, but to provide a guidance on future policy. The minutes of the last meeting indicated that the Fed would remain ultra vigilant on data. The plunge in energy prices since the last FOMC meeting will no doubt be referred to as it supports growth. Banks were among the strongest performers, while Mining stocks were among the main decliners. The FTSE 100 was up 0.17% by mid-day.

[R]9:30AM The FTSE gains modestly on banks, waits for FOMC decision.[/R]
The FTSE 100 in London was up 9.9 points, or 0.175, at 5,841.7 by mid-day on Wednesday.

Economic news

News that the Bank of England monetary policy committee had voted unanimously to keep rates on hold at 4.75% in September failed to impact the market

Advancers

Banks were among the strongest performers. Standard Life was among the main FTSE gainers, up 2% on a report in The Guardian newspaper that it was preparing for a management shake-up which could include the exit of Finance Director Alison Reed. HBOS rose 1.7% after JP Morgan increased its price target to 1,000 pence from 960 pence. Bradford & Bingley fell 1.4%.

Man Group rose 3.8%, after it reported that the net asset value of Man AHL Diversified Futures rose 1.17% last week. Enterprise Inns rose 1.6 % after Merrill Lynch raised the price target and Corus was up 2.7% after Morgan Stanley upgraded the company to overweight.

Decliners

Mining stocks were among the main decliners, led by Kazakhmys which fell 3.3%, after commodity markets came under pressure from a decline in oil prices. Kazakhmys has a power plant in Karaganda where an explosion in a mine belonging to Mittal. British Energy slid 0.9% on a J.P. Morgan Securities downgrade to neutral from overweight.

Miners also fell. Antofagasta and Xstrata which went ex-dividend, slipped 2.6% and 1.3% respectively. BHP Billiton fell 1.4%, Anglo 1.4% and Rio fell 0.6%. Brambles Industry, down 6.4% after going ex dividend, including a special dividend, and Drax Group down 0.9% on mixed broker comment Partygaming reduced sharp early falls and was off 0.2% after UBS cut it to reduce from neutral. In the telecoms sector, British Telecom fell 0.5% after UBS cut its recommendation to neutral from buy.