London pre-open: Flat start expected ahead of Fed decision

31st Jul 2013 07:30

Markets are expected to open broadly flat on Wednesday as investors adopt a cautious approach ahead of the money policy decision at the Federal Reserve.City sources predict the FTSE 100 will open down six points from yesterday's close of 6,571. All eyes will be on the Federal Open Market Committee as its two-day meeting comes to a close this evening. While few actually think that the Fed will begin to scale back its quantitative easing programme this month - analysts are widely expects the 'tapering' to start in September - traders will be on edge of their seats, looking out for hints of a timeframe for the withdrawal of stimulus.Market Analyst Craig Erlam from Alpari said it's always difficult to try and guess what the Fed is going to do: "Even when correct, markets can be so volatile around the decision and the release of the statement, that most forms of technical analysis go out of the window and it can be very difficult to profit from it."That's why we always tend to see similar scenarios to what we have this morning, with markets opening largely flat."Also in focus today will be a raft of economic data (not to mention corporate earnings), including German unemployment figures, the Eurozone consumer price index, US second-quarter growth estimates and the Chicago purchasing managers' index. Stocks to watch Tullow Oil reported a 15% jump in pre-tax profit to $1.3bn in the first half on the back of an increase in production. Production for the six months to the end of June climbed 14% to 88,600 barrels of oil equivalent per day (boepd), driven by exploration and appraisal success in Kenya.South America-focused mining group Antofagasta saw copper output fall from the first to the second quarter due to lower production from its Esperanza project in Chile where the plant underwent scheduled maintenance.Beverages group Diageo lifted its final dividend by 9.0% after seeing solid growth in both sales and profits in the year to June 30th. "We have delivered 5.0% net sales growth reflecting the strength of our US spirits business and continued double digit growth in the emerging markets, despite weakness in some markets," said Chief Executive Ivan Menezes.BC