London to open higher on US rate cut talk

(Corrects figures for the FTSE 100.)

(Alliance News) - Stocks in London are set to open higher on Wednesday, after US Federal Reserve Chair Jerome Powell said the US central bank has made "quite a bit of progress" in its fight against stubborn inflation.

Eyes are also on Thursday's UK election, which is expected to see Labour make gains.

IG says futures indicate the FTSE 100 to open up 29.6 points, or 0.4%, at 8,150.80 on Wednesday. The index of London large-caps closed down 45.56 points, 0.6%, at 8,121.20 on Tuesday.

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

The US Federal Reserve has made "quite a bit of progress" in its fight against rising prices and could hit its inflation target as soon as next year, Fed chair Jerome Powell said.

"We've made quite a bit of progress in bringing inflation back down to our target, while the labor market has remained strong and growth has continued," Powell told an event in Sintra, Portugal, which was streamed online.

He added that it was possible the Fed could hit its two percent target "maybe late next year," or in 2026. "The main thing is, we're making real progress," he said.

In London, it is just a day before Brits head to polling stations up and down the country.

The UK Labour party is 99% "certain" to secure more seats in Thursday's general election than when it won a landslide victory in 1997, a major new poll said.

The centre-left opposition party – out of power since 2010 – is predicted to claim 484 out of a total of 650 seats in what would be an unprecedented victory in modern British history, pollster Survation said.

Meanwhile, the right-wing ruling Conservatives and the centrist Liberal Democrats are in a close race to come a distant second and form the country's official opposition, it added.

Sterling was quoted at USD1.2681 early Wednesday, higher than USD1.2678 at the London equities close on Tuesday.

The euro traded at USD1.0738 early Wednesday, [higher than USD1.0735 late Tuesday. Against the yen, the dollar was quoted at JPY161.78, up versus JPY161.54.

In Asia on Wednesday, the Nikkei 225 index in Tokyo was up 1.3%. In China, the Shanghai Composite was down 0.4%, while the Hang Seng index in Hong Kong was up 1.1%. The S&P/ASX 200 in Sydney closed up 0.2%.

Gold was quoted at USD2,334.90 an ounce early Wednesday, higher than USD2,327.03 on Tuesday.

Brent oil was trading at USD86.65 a barrel early Wednesday, lower than USD86.99 late Tuesday.

In Wednesday's corporate calendar, there is a trading statement from Topps Tiles, as well as full year results due out from ActiveOps and Baltic Classifieds Group.

In the economic calendar on Wednesday, there is a slew of PMI data.

There is also the US initial jobless claims, as financial markets look to shut on Thursday 4, marking independence day.

By Sophie Rose, Alliance News senior reporter

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