London pre-open: Stocks expected to rise ahead of FOMC meeting

UK stocks were expected to track gains on Wall Street to push higher on Wednesday as investors took an optimistic approach ahead of the Federal Open Market Committee (FOMC) meeting in the States.

City sources predict the FTSE 100 will open around 16 points higher than Tuesday's close of 6,792.24.

The index has traded broadly sideways over the past week as concerns about Chinese economic growth and nervousness ahead of the FOMC meeting and Scottish referendum eroded risk appetite.

UK unemployment data and the minutes from the latest Bank of England policy meeting will also be due out during Wednesday's sesssion.

As for the Federal Reserve meeting, which wraps up after European markets close on Wednesday evening, investors will be looking closely for a possible change in language by chair Janet Yellen to signal when the first increase in interest rates may come.

Analysts at Danske Bank said: "It seems increasingly likely that the Fed will change its forward guidance away from the 'considerable time' language to something linked with the development towards its goals of full employment and inflation at 2%.

"It might put in some other soft language instead to avoid a too hawkish message."

Stocks to watch

Vodafone was making headlines on reports that it, along with network operator EE, are considering buying up parts of Phones 4U, the mobile-phone retailer that went into adminstration at the weekend. The retailer had to seek creditor protection after both Vodafone and EE chose not to renew their contracts with the company.

Engineer Smiths Group wrestled its revenues back on a par with the prior year, as its medical arm improved in the second half. With foreign exchange headwinds dragging the numbers lower, underlying revenue was broadly flat at £2.95bn, while underlying pre-tax profit fell 6% to £445m and earnings per share declined 12% to 81.8p.

Britain-based Dairy Crest has appointed Stephen Alexander as its new chairman. Alexander replaces Anthony Fry, who was taken ill earlier this year and who has left the group’s board with immediate effect. "I am delighted to take up the role of Chairman. Dairy Crest is a good business and I look forward to helping to continue to further develop the company," said Alexander.

Consumer-goods packaging group DS Smith said that it has made good progress since the start of its financial year with its performance "in line with our plans". The company said the outlook looks positive with volumes continuing to grow despite competitive market conditions.