London open: Stocks gain but traders nervous ahead of Fed meeting

17th Jun 2013 08:23

Stocks registered decent gains in early trading on Monday though upside is expected to be limited throughout the day as traders nervously await a policy meeting at the Federal Reserve in a few days' time.Both the economic and corporate earnings schedules for today are looking pretty light, so the main focus will remain on the Fed amid ongoing uncertainty regarding the central bank's 'exit strategy' from monetary stimulus.Global markets have been extremely choppy over the last month since Fed Chairman Ben Bernanke suggested that the bank could begin 'taper' its quantitative easing (QE) programme if the economic recovery picks up. Since his comments on May 22nd, the FTSE 100 had dropped by around 7.3% by Friday's close.However, as Market Strategist Ishaq Siddiqi from ETX Capital explained this morning, mixed economic data since the start of June has given investors "little clues over the Fed's stance on stimulus measures on Wednesday, leading to an increase in volatility".Confusing things further was the International Monetary Fund (IMF) on Friday which slashed its forecast for US economic growth from 3.0% to 2.7% for 2014. The Fund however still expects a 1.9% expansion this year.Siddiqi said that markets are hoping for a dovish tone from Bernanke at the press conference following the meeting this week: "Traders are looking for further clarity on when the Fed will look to unwind asset purchases and are hopeful that the central bank will remain committed to ultra-low interest rates after QE is reduced."Reckitt gains after broker commentsConsumer products giant Reckitt Benckiser was a high riser this morning after Citigroup reiterated its 'buy' rating for the stock, saying that the shares are cheap. While the broker said it was a buyer of the company for the recovery of its core business, it also said that the pharmaceuticals division is "undervalued by the market".Meanwhile, Morgan Stanley kept an 'equal weight' rating for Reckitt this morning but said that the group's growth outlook supports its premium valuation above its five-year average.In contrast, Nomura has downgraded its rating for food ingredients and retail group Associated British Foods from 'neutral' to 'reduce', causing shares to fall early on. The broker said that the stock is too expensive now that the profit boom for Sugar and Primark over the past two years is no longer supported.Oilfield services group Petrofac was in the red this morning on negative read-across from Italy after a profit warning from sector peer Saipem. The Milan-based firm warned of rising costs for projects in Algeria.Banking stocks were under the weather this morning with Barclays among the worst performers on the FTSE 100 early on. RBS and Standard Chartered were also lower.FTSE 100 - RisersResolution Ltd. (RSL) 281.00p +2.14%Reckitt Benckiser Group (RB.) 4,662.00p +1.81%Vodafone Group (VOD) 183.05p +1.67%Sainsbury (J) (SBRY) 375.80p +1.62%Experian (EXPN) 1,165.00p +1.57%Burberry Group (BRBY) 1,390.00p +1.46%Shire Plc (SHP) 2,109.00p +1.30%BG Group (BG.) 1,204.50p +1.22%Glencore Xstrata (GLEN) 319.70p +1.20%Johnson Matthey (JMAT) 2,634.00p +1.19%FTSE 100 - FallersPetrofac Ltd. (PFC) 1,283.00p -3.10%ARM Holdings (ARM) 848.00p -1.62%Associated British Foods (ABF) 1,765.00p -0.95%Barclays (BARC) 295.60p -0.71%Evraz (EVR) 120.00p -0.66%Randgold Resources Ltd. (RRS) 4,850.00p -0.64%Tullow Oil (TLW) 1,043.00p -0.48%WPP (WPP) 1,115.00p -0.45%Royal Bank of Scotland Group (RBS) 314.80p -0.38%Fresnillo (FRES) 1,097.00p -0.36%FTSE 250 - RisersNew World Resources A Shares (NWR) 94.95p +4.63%Morgan Advance Materials (MGAM) 273.70p +2.89%Thomas Cook Group (TCG) 117.80p +2.43%Anite (AIE) 138.10p +2.37%COLT Group SA (COLT) 102.80p +2.29%Invensys (ISYS) 414.70p +2.29%Computacenter (CCC) 448.90p +2.19%Intermediate Capital Group (ICP) 434.70p +2.04%WH Smith (SMWH) 730.00p +1.96%Rank Group (RNK) 152.90p +1.93%FTSE 250 - FallersFidelity China Special Situations (FCSS) 83.90p -2.33%Dialight (DIA) 1,186.00p -1.98%FirstGroup (FGP) 91.85p -1.97%Home Retail Group (HOME) 130.70p -1.58%Perform Group (PER) 567.50p -1.39%Imagination Technologies Group (IMG) 311.20p -1.33%Hochschild Mining (HOC) 209.50p -1.18%African Barrick Gold (ABG) 134.30p -0.89%Tullett Prebon (TLPR) 291.00p -0.58%Euromoney Institutional Investor (ERM) 979.50p -0.46%