30th Oct 2025 06:53
(Alliance News) - Stocks in London are set to open lower on Thursday, putting the FTSE 100's eight-day win streak under threat, after what was seen as a "hawkish" cut by the Federal Reserve.
On Thursday afternoon, eyes turn to the European Central Bank, which is expected to hold.
IG says futures indicate the FTSE 100 to open 22.7 points lower, 0.2%, at 9,733.44 on Thursday. The index of London large-caps closed up 59.40 points, 0.6% at 9,756.14 on Wednesday.
Commerzbank analyst Thu Lan Nguyen commented: "All in all, another interest rate cut in December, as the market had largely expected, would be anything but a foregone conclusion, according to Powell. The meeting thus turned out to be far more hawkish than expected. No wonder the dollar appreciated in the wake of the comments."
Federal Reserve Chair Jerome Powell on Wednesday lowered expectations for a further rate reduction in December, stating it was far from a foregone conclusion.
Speaking to reporters Powell said there were "strongly differing views" on the Federal Open Market Committee looking ahead to December, but pushed back against market pricing which has assumed a further cut.
Powell said no decision has been made a decision about December and a cut should not be assumed.
Powell was speaking after the Federal Reserve reduced interest rates by 25 basis points and said it will halt its effort to shrink its balance sheet in December.
The quarter point cut takes the federal funds range to 3.75%-4.00% and follows a same sized move at the September FOMC meeting.
Powell characterised Wednesday's cut as a risk-management move to bring policy closer to a neutral stance. But he said going forward "is a different thing."
In New York on Wednesday, the Dow Jones Industrial Average fell 0.2% and the S&P 500 ended fractionally lower. The Nasdaq Composite advanced 0.6%.
Versus the dollar, sterling fell to USD1.3199 early Thursday, from USD1.3236 at the time of the London equities close on Wednesday. The euro declined to USD1.1622 from USD1.1660. Against the yen, the dollar rose to JPY153.03 from JPY152.10.
The yield on the 10-year US Treasury widened to 4.08% from 4.00%. The 30-year yield stretched to 4.63% from 4.57%.
The Bank of Japan on Thursday kept interest rates unchanged, decided by a seven to two majority vote.
In a statement released by BoJ following the monetary policy meeting, it said interest rates were held at 0.5%, matching consensus cited by FXStreet.
"High uncertainties still remain regarding the impact of trade and other policies on economic activity and prices at home and abroad," the BoJ said in a statement following the decision.
Crunch talks between US President Donald Trump and China's Xi Jinping focused on their trade war wrapped up in under two hours Thursday with no immediate public comment from either leader on whether progress was made.
Trump headed straight to Air Force One in Busan, South Korea after the first face-to-face meeting in six years with Xi, waving and pumping his first as he boarded the plane. The jet took off minutes later.
Xi was seen boarding his limousine outside the closed-door meeting, which lasted around an hour and 40 minutes.
Ahead of the talks, Trump complimented a smiling Xi as a "very tough negotiator" as they shook hands.
In Tokyo on Thursday, the Nikkei 225 was flat. In China, the Shanghai Composite was down 0.5%, while the Hang Seng Index in Hong Kong was 0.6% lower. The S&P/ASX 200 in Sydney was down 0.5%.
Standard Chartered shares shot up 4.3% in Hong Kong.
The lender said pretax profit climbed 9.9% to USD1.99 billion in the third quarter of 2025, from USD1.81 billion a year ago.
The company expects 2025 income growth towards the upper end of the 5% to 7% range at constant currency excluding notable items. It had previously guided it to be around the bottom of the range.
Gold fell to USD3,961.51 an ounce on Thursday morning, from USD3,997.24 at the time of the London equities close on Wednesday. Brent declined to USD64.08 a barrel from USD64.52.
On Thursday's UK corporate calendar, there are third-quarter results from Shell.
By Eric Cunha, Alliance News news editor
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