London open: Stocks rise ahead of Fed announcement

(Sharecast News) - London stocks rose in early trade on Wednesday following heavy losses in the previous session, as investors eyed the latest policy announcement from the US Federal Reserve. At 0840 BST, the FTSE 100 was up 0.6% at 7,816.00.

Victoria Scholar, head of investment at Interactive Investor, said: "US markets sold off on Tuesday with regional banks bearing the brunt of the declines following JPMorgan's rescue deal for First Republic earlier this week. Comments from the Wall Street giant's CEO Jamie Dimon saying 'there may be another smaller one' referring to a risk of another potential banking collapse ahead, appear to have accelerated the declines with the SPDR S&P Regional Banking ETF shedding over 6% and PacWest and Western Alliance sliding double digits in percentage terms.

"Focus turns to the conclusion of the Fed's two-day policy meeting today when the central bank is expected to raise rates by a further 25-basis points, despite uncertainty in the US mid-size banking sector. US job openings hit a near two-year low in March and the consumer price index for March dropped to 5% year-on-year, slowing for the ninth consecutive period suggesting the Fed's hawkish agenda is beginning to take hold in the economy."

In equity markets, education publisher Pearson rose, having tumbled on Tuesday after US peer Chegg warned over the impact of AI on its homework-help services.

Coca-Cola HBC fizzed higher as it reported first-quarter organic revenue growth of 22.2%, excluding Russia and Ukraine, led by price mix and offset by declines in stills due to an anticipated weakness in water.

Paddy Power owner Flutter Entertainment gained after it hailed a "very strong" US performance as it posted a rise in first-quarter revenues.

TI Fluid Systems surged to the top of the FTSE 250 after it reported a 15.2% jump in first-quarter revenues and said it was outperforming markets in all regions.

On the downside, RS Group was weaker as it said that chief financial officer David Egan was leaving the business with immediate effect after admitting a relationship with a colleague that fell "short of the high standards expected" of the company.

Haleon lost ground as the consumer health company said first-quarter profits came in below expectations as higher costs hit earnings margins.

Lloyds edged lower as it became the latest UK lender to beat quarterly profit forecasts as earnings surged on the back of higher interest rates, although deposits fell sharply. The bank posted first-quarter pre-tax profit of £2.26bn, up 46% and better than the £1.95bn average of analyst forecasts. Net income, generated after deposit payouts, rose 15% to £4.7bn.

Customer deposits fell by £2.2bn to £473.1bn, including a reduction in retail current account balances of £3.5bn, partly driven by seasonal customer outflows, including tax payments, higher spend and a more competitive market, Lloyds said.

Aston Martin fell despite posting a narrowing of its first-quarter losses, with strong growth in deliveries of its sport utility vehicle DBX, and backing its full-year guidance.

Watches of Switzerland was also down as it announced the departure of chief financial officer Bill Floydd by mutual agreement.