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FTSE 100 opens in positive territory ahead of Fed set-piece

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The FTSE 100 kicked off the session in positive territory, but sentiment could turn on a pinhead ahead of key comments from the US Federal Reserve later.

Keenly sought by economists and equity market professionals after the two-day policy meeting will be any guidance on future interest rates – and, by extension, the Fed’s take on inflation.

“At some point, there will need to be a signal that the currently easy monetary conditions will be scaled back,” said Richard Hunter, head of markets at Interactive Investor.

“The expectation is that the subject of tapering some of the relief has at least made its way to the table for discussion, if not immediate action.

“This will follow on from the latest set of data, showing another spike in wholesale inflation and a drop in retail sales which was more than anticipated.

“The increasing success of the vaccination programme and therefore the mobility of the population is being reflected in a move towards spending on services and away from goods, as consumers look to spend in public rather than in private.”

On the market, the price action was muted at the upper echelons. Among the smaller caps, catalogue retailer N Brown (LON:BWNG) fell 13% after its legal spat with Allianz Insurance intensified.

It has been a good week so far for investors in the managed service specialist Westminster Group, which saw its shares rise a further 10% in early trade after landing a second major contract in two days. Since Monday, the stock has advanced more than 50%.

6.50 am: Flat start predicted 

The FTSE 100 is expected to open slightly higher on Wednesday as traders await the latest decision on interest rates from the US Federal Reserve.

Spread-betters IG expect the blue-chip index to start up 8 points after ending Tuesday’s session 26 points higher at 7,172.

The latest meeting of the Fed will be eyed closely as it will include a new version of the committee’s economic projections and members’ updated forecasts for growth, inflation, and the much-watched ‘dot plot’ of forecasts for where interest rates will be at the end of this and the next few years.

Expectations of a higher start in London followed a slower session for Wall Street overnight which saw the Dow Jones Industrial Average close down 0.27% at 34,299 while the S&P 500 dropped 0.2% to 4,246 and the Nasdaq fell 0.71% to 14,072.

The picture was similarly negative in Asia this morning, with Japan’s Nikkei 225 down 0.5% while Hong Kong’s Hang Seng dropped 0.26%.

On currency markets, the pound was relatively unchanged against the dollar, up 0.02% at US$1.408, although UK inflation figures due later today could provide some catalysts for movement.

Around the markets:

Sterling: US$1.408, up 0.02%

Brent crude: US$74.58 a barrel, up 0.8%

Gold: US$1,859 an ounce, up 0.09%

Bitcoin: US$40,210, down 0.3%

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mostly lower on Wednesday as Japan’s exports in May rose 49.6% from a year earlier, lower than a 51.3% increase expected by economists in a Reuters poll.

The Shanghai Composite in China fell 0.77% and Hong Kong’s Hang Seng index dipped 0.30%

In Japan, the Nikkei 225 slipped 0.48% while South Korea’s Kospi rose 0.59%.

Shares in Australia fell, with the S&P/ASX 200 trading 0.03% lower after hitting an all-time high earlier in the day.

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Proactive Australia news:

Horizon Minerals Ltd (ASX:HRZ) has intercepted significant gold mineralisation while drilling at its 100%-owned Binduli Gold Project, about 12 kilometres west of Kalgoorlie in the heart of the Western Australian goldfields.

Orthocell Ltd (ASX:OCC) has been granted New Zealand and Chinese patents for its CelGro® collagen medical device platform for soft tissue regeneration applications.

Elementos Limited (ASX:ELT) (OTCMKTS:ELTLF) (FRA:9EM) has intersected further shallow zones of tin mineralisation in a drilling campaign designed to increase confidence in the mineral resource at the flagship Oropesa Tin Project in Spain.

Tietto Minerals Ltd (ASX:TIE) has reported further high-grade gold results from infill and extensional drilling at its Abujar-Gludehi (AG) and Abujar-Pischon-Golikro (APG) deposits, part of its 3.02 million ounces Abujar Gold Project in Côte d’Ivoire, West Africa.

Oar Resources Ltd (ASX:OAR) (FRA:F1S) has received firm commitments for a share placement to raise up to $2.3 million at a price of 1.3 cents per share.

Caspin Resources Ltd (ASX:CPN) has discovered several new platinum group element (PGE)-nickel-copper soil anomalies in areas with no previous PGE-nickel-copper exploration at its Yarawindah Brook Project in Western Australia.

Poseidon Nickel Ltd (ASX:POS) (OTCMKTS:PSDNF) (FRA:NYG) has returned more strong assay results from resource definition drilling underway at the Golden Swan discovery of its Black Swan Nickel Project in Western Australia.

AuKing Mining Ltd (ASX:AKN) has had a stellar reinstatement to official quotation on the Australian Securities Exchange after completing a public share offer to raise around $7 million through the issue of 35 million shares as well as 17.5 million options exercisable at 25 cents expiring June 2023.

K2fly Ltd (ASX:K2F) has recorded three consecutive months of record sales invoicing as it prepares for FY21’s winddown.

Firefinch Ltd (ASX:FFX) has awarded a key US$360 million open pit mining contract covering expansion work at its Morila Gold Project in Mali to a joint venture (JV) vehicle.

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