London pre-open: Strong gains expected as eyes turn to Fed meeting

16th Sep 2013 07:21

Markets are expected to open with strong gains on Monday morning as eyes begin to turn to the Federal Reserve ahead of its all-important policy meeting this week.City sources predict the FTSE 100 will open up 70 points from Friday's close of 6,583.8.The Federal Open Market Committee's two-day meeting is due to come to a close on Wednesday and will likely be one of the most closely-watched policy decisions in recent years, given rising expectations that the Fed will begin to scale back its stimulus programme."The ability of the economy to show sufficient signs of improvement within the jobs markets has been a core driver of expectations and the trends appear to point towards the economy being just about accommodative to such a move," said Market Analyst Craig Erlam from Alpari.Asian markets performed well overnight after former Treasury Secretary Larry Summers pulled out of the running to replace Ben Bernanke as Fed Chairman when he steps down in January. The removal of Summers - widely viewed as a hawkish candidate in the running for the position - is expected to drive a positive reaction on markets on Monday on the back of hopes that current Fed Vice Chair and well-known dove Janet Yellen may now by the firm favourite.Meanwhile, concerns over a potential military attack on Syria receded over the weekend after the US and Russia agreed that Bashar al-Assad's regime must hand over details of its stockpile within a week; the weapons will then be removed and destroyed before mid-2014."With the prospects of an imminent military conflagration on Syria diminishing into the distance after the weekend agreement between the US and Russia on Syria's chemical weapons, the markets would appear to have one less thing to worry about as markets begin a new week, with all eyes on this week's Federal Reserve meeting, and whether or not we will see the beginning of the long anticipated tapering programme", said Senior Market Analyst Michael Hewson from CMC Markets.Stocks to watchOil and gas services provider Petrofac is to operate and manage two training facilities for Malaysian oil major PETRONAS in a contract worth $120m. The company is currently constructing two upstream plant training facilities and a downstream facility to support PETRONAS' workforce capability enhancement programme. The two upstream facilities will be managed by Petrofac for the next five years and will see 500 delegates trained each year. There is the option to extend the agreement for a further two years.Petra Diamonds swung to an annual profit driven by a rise in revenue and production along with tight cost control and operational expansion. Net profit after tax came to $27.9m from the prior year's loss of $2.1m as revenue jumped 27% to $402.7m from $316.9m.AIM listed distributor and operator of point-of-use drinking water purification and dispensing systems, Waterlogic saw a strong increase in profits in the first half of 2012. Adjusted earnings before interest taxes and amortisation (EBITA) increased to $7.6m compared to $4.8m in the same half of 2012.BC