London pre-open: Fed casts a shadow

23rd Jun 2011 07:34

The Federal Reserve's more cautious stance on the growth prospects of the US economy is having a knock-on effect in London, where stocks are expected to open lower.The Fed is now projecting growth of 2.7% to 2.9% for the US economy this year, having previously indicated it expected growth of between 3.1% to 3.3%. The pick-up in the economy is taking longer to gather momentum, the Federal Open Market Committee conceded, though it still thinks the pace of recovery is likely to accelerate over the coming quarters.City traders predict the Footsie will open around 30 points lower than yesterday's close of 5,773.Recycled packaging firm DS Smith overcame a sharp rise in input costs to grow pre-tax profits by 86% last year. Profit before tax in the year to 30 April rose to £102.2m from £55.0m the year before, on sales that rose 19.5% to £2,474.5m from £2,070.6m. With the effects of the recent acquisition of Otor stripped out, sales rose 10.0% year-on-year.Train and bus operator Go-Ahead expects to post a full-year profit ahead of expectations as high petrol prices and tough economic conditions prompt drivers to abandon their cars in favour of public transport.Currys and PC World owner Dixons saw underlying profit before tax dip to £85.3m in the year to end-April from £90.0m the year before. The group said it is increasing market share across most of its markets and sectors, especially in the UK and the Nordic countries.--jh