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London pre-open: Stocks seen down after FOMC minutes
(Sharecast News) - London stocks were set for more losses on Thursday as investors mulled the latest FOMC minutes amid a barrage of corporate news, with results from the likes of Rolls-Royce, BAE Systems and Anglo American.
The FTSE 100 was called to open 10 points lower at 7,920.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Hawkish were the minutes from the latest FOMC meeting. They confirmed that the Federal Reserve officials are indeed not lying when they say that they will continue hiking the interest rates to tame inflation toward the 2% mark.
"And the minutes show that they reckon it will take 'some time'.
"How much time? We don't know. Even they don't know.
"But we know that the job is not done yet, and the next meeting's 25bp increase won't be the last one.
"We also know that most officials remain favourable for small increases - for longer. But some think that a 50bp hike would be appropriate. The odds for a 50bp hike for the March FOMC meeting now climbed to 24%.
"But more importantly, odds for a peak Fed rate went from 4.90% at the start of the year to around 5.36% yesterday after the release of the latest minutes. There is no more expectation of a rate cut before the year end - which was anyway a bit out of context."
In corporate news, aerospace and defence company Rolls-Royce posted a rise in operating profit as the post-pandemic recovery in international travel continued and said it expected underlying earnings of £0.8-1bn this fiscal year.
The company posted a statutory operating profit of £837m in 2022, up from £513m a year earlier. Revenue grew to £13.5bn from £11.2bn.
On an underlying basis, operating profit was up to £652m from £414m.
Elsewhere, paper and packaging group Mondi more than doubled full-year profits on higher prices but warned that it continued to see softer demand and pricing, despite input costs declining.
Profit before tax rose 119% to €1.56bn as revenue excluding Russian operations surged by 28% to €9bn.
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