London pre-open: Stocks seen muted ahead of US inflation, Fed minutes

(Sharecast News) - London stocks were set for a muted open on Wednesday as investors eyed a key US inflation reading and the latest minutes from the Federal Reserve.

The FTSE 100 was called to open five points lower at 7,780.

The consumer price index for March is due at 1330 BST, while the minutes are scheduled for release at 1900 BST.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "A dose of caution has been injected into financial markets as investors brace for the latest reading on US inflation. On Wall Street stocks lost some of the earlier ground won, trading has been pretty mixed in Asia and a similar picture is set to emerge as exchanges open in Europe. Investors are keen to see more evidence that hot prices are losing steam, but are still worried that the CPI numbers out later will indicate that the cooling process is proving slow going.

"Markets are super-sensitive to any indication that the Fed will stay aggressive in its inflation fighting stance, and the worry is that core inflation, which excludes volatile food and energy costs, may be proving harder to bring down more quickly, which could harden policymakers' resolve. Another 0.25% hike is already expected in May, and a stronger than expected core inflation reading, could tip the balance in forecasts towards yet another rate rise in June, which may set off a fresh round of equity selling, particularly for companies in the sensitive tech sector. But there are still hopes that the pause button may still be pressed, if policymakers assess that the lag effect of rate rises will do the job and bring down the price spiral."

In corporate news, student accommodation provider Unite said it had already sold 90% of its rooms for the 2023/24 academic year, reflecting strong demand as well as new nomination agreements with universities.

"This is supportive of our guidance for full occupancy and rental growth of 6-7% for the 2023/24 academic year, compared with 99% and 3.5% in 2022/23," the company said.

"The supply of purpose-built student accommodation cannot keep pace with growing student demand at the same time as HMO landlords are leaving the sector. We are therefore tracking a number of new development opportunities at attractive returns, which we are uniquely positioned to deliver through our university relationships and development capability."

Hikma Pharmaceuticals said Riad Mishlawi, president of the group's injectables business, has been appointed chief executive Officer, effective from September 1.

Said Darwazah will step down as acting CEO and return to his role as executive chairman.