London pre-open: Stocks to fall on Fed uncertainty

19th Feb 2015 07:34

UK stocks were expected to track Wall Street lower on Thursday morning after minutes from the latest Federal Reserve meeting showed that policymakers are wary of raising interest rates too soon.City sources predict the FTSE 100 will open 18 points lower than Wednesday's close of 6,898.08.UK markets had closed more or less flat the previous session with investors showing caution after the FTSE 100 closed at a new 15-year high on Tuesday. The index is now within touching distance of its all-time closing high of 6,930.20 reached in December 1999.Minutes from the last Federal Open Market Committee (FOMC) meeting in January showed that "many" members said a premature rate increase could be detrimental for the recovery, while "several" believed a later move could lead to high inflation.Many officials were worried that once the term "patient" is scrapped, markets will assume the Fed is set to move on "an unduly narrow range of dates", which could lead to "undesirably tight" financial conditions"."Our main takeaway from the January FOMC minutes is that concern about downside risk to inflation has risen and, consequently, the bar for raising rates by June is higher than it was in December," said Michael Gapen from Barclays.Minutes from the European Central Bank's own policy meeting will be released on Thursday for the first time in history. The minutes, due out at 12:30 GMT, will provide detail about the ECB's decision on 22 January to introduce a €1trn quantitative easing package.Stocks to watchWith oil and gas prices plummeting, Centrica has taken dramatic action by slashing its dividend and future payout policy, warning that earnings for next year will be lower than expected too. Although revenue rose 11% to £29.4bn, adjusted operating profits sank 35% to £1.7bn and earnings per share 28% to 19.2p, with the dividend down 21% to 19.2p.High street sportswear retailer Sports Direct said it is confident of increasing profits this year despite a significant slowdown in sales growth in its third quarter. Sales for the 13 weeks to 25 January were up just 2.6% at £771m, compared with 6.5% growth in the first half of its financial year. Chief executive Dave Forsey said that a "weak winter sports season across Europe has proved challenging".SABMiller's chief financial officer Jamie Wilson has submitted his resignation from the company for personal reasons and the current director of group strategy Domenic De Lorenzo will replace him until the someone is chosen to fill the role permanently. He will exit the board immediately and will officially leave the group on 31 March 2015.