LONDON MARKET EARLY CALL: Stocks called lower after Fed and before BoE

(Alliance News) - Stock prices in London are set to open lower on Thursday, after the US Federal Reserve lifted interest rates as expected and ahead of three more central bank decisions.

IG says futures indicate the FTSE 100 index of large-caps to open 12.13 points, or 0.2%, lower at 7,483.80 on Thursday. The FTSE 100 closed down 6.96 points, or 0.1%, at 7,495.93 on Wednesday.

The Fed lifted interest rates by 50 basis points, as widely expected, but also forecast that interest rates would peak at a higher level than previously expected.

The Federal Open Market Committee lifted the target range for the federal funds rate to 4.25% to 4.50% - the highest since 2007 - from the previous range of 3.75% to 4.00%.

"Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures," the Fed explained.

"The committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time."

In the US on Wednesday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.4%, the S&P 500 down 0.6% and the Nasdaq Composite down 0.8%.

The Swiss National Bank will kick off Thursday's busy day for central bank decisions at 0830 GMT, before the Bank of England announces its interest rate decision at midday, followed shortly afterward by the European Central Bank.

Sterling was quoted at USD1.2395 early Thursday, lower than USD1.2410 at the London equities close on Wednesday, which was before the Fed decision. The euro traded at USD1.0656, a touch lower than USD1.0660. Against the yen, the dollar move was stronger, quoted at JPY135.70, up versus JPY134.82.

In Asia on Thursday, the Nikkei 225 index was down 0.4% in Tokyo. In China, the Shanghai Composite was down 0.3%, while the Hang Seng index in Hong Kong was down 1.4%. The S&P/ASX 200 in Sydney closed down 0.6%.

China's retail sales plunged last month, official data showed, as Covid restrictions and a property market crisis hammered the world's second-largest economy.

The figures highlight the work ahead for the government as it moves away from almost three years of strict containment measures that have whittled growth and sent shudders through supply chains.

November retail sales sank 5.9% year-on-year, marking the second successive contraction, according to data released by the National Bureau of Statistics.

Gold was quoted at USD1,796.29 an ounce early Thursday, sharply lower than USD1,810.74 on Wednesday. Brent oil was trading at USD82.10 a barrel, lower than USD82.51.

In Thursday's corporate calendar for London, there are half-year results from electricals retailer Currys and a trading statement from outsourcer Serco.

In the economic calendar beside the central bank announcements, there's an inflation print for France at 0745 GMT and US unemployment insurance claims at 1330 GMT.

By Heather Rydings, Alliance News senior economics reporter

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