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London stocks were set to rise sharply at the open on Tuesday following a flat close in the previous session, as attention turned to the Federal Reserve's upcoming two-day policy meeting.
The FTSE 100 was expected to open around 55 points higher.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, commented on the heightened market anticipation surrounding the Federal Reserve's decision. She noted, "Either the Federal Reserve doves are getting ahead of themselves, or there could be a major disappointment when the Fed announces its policy tomorrow. Alternatively, the Fed could align with market expectations to avoid further panic."
Ozkardeskaya added that the chances of a 50 basis point cut were now seen at around 70%. She pointed out that the US 2-year Treasury yield had fallen below 3.53%, while the 10-year yield hovered around 3.62%. The US dollar index was also under pressure amid growing bets for a 50 basis point cut. She stated that uncertainty remained over the Fed's next move, suggesting that a 25 basis point cut might be more appropriate given the current economic data. However, she also acknowledged the possibility of a larger cut, especially with some political pressure pushing for a 75 basis point reduction.
In corporate news, Kingfisher (LSE:KGF), the owner of B&Q, raised the lower end of its full-year profit expectations following its interim results, which aligned with forecasts. The company now anticipates adjusted pre-tax profit of £510-550 million, up from a previous range of £490-550 million. For the six months ending July 31, pre-tax profit increased by 2.3% to £324 million.
Meanwhile, Japan’s health ministry has accepted for review a new drug application for GSK’s (LSE:GSK) Blenrep, a treatment for blood cancer. This marks the third significant regulatory acceptance for the drug, following similar actions by the European Medicines Agency in July and the UK’s Medicines and Healthcare products Regulatory Agency earlier this month.
British American Tobacco (BAT) announced the appointment of Kingsley Wheaton as its chief corporate officer, a newly created position focused on advancing the company's ‘Sustainable Future’ strategy. This role will prioritize reducing tobacco-related harm, fostering transparent communication with regulators, and enhancing sustainability efforts. BAT also introduced other leadership changes, including the appointment of Luciano Comin as chief marketing officer, effective immediately.
