28th Jan 2015 07:01
LONDON (Alliance News) - London stocks are forecast to open higher Wednesday, overcoming downbeat sentiment emanating from Wall Street as US corporate heavyweights disappointed with earnings, with investors focusing instead on the interest decision from the Federal Reserve after the close of European markets.
The FTSE 100 is called to open 54 points higher at 6,865. The DJIA ended 1.7% lower Tuesday as Proctor & Gamble, Caterpillar, DuPont, United Technologies and Pfizer among others, disappointing investors with earnings and outlook that fell short of expectations.
"Yesterday?s sell-off gained a little more impetus in the afternoon session as a significant number of US corporates reported falling short of earnings estimates, hurt by the sharp rise in the US dollar in recent months," says Michael Hewson at CMC Markets.
"Key economic bellwethers such as Caterpillar and Microsoft disappointed with the stronger US dollar playing a role," says Stan Shamu at IG. "Caterpillar is experiencing weaker demand from energy companies as oil and other commodities prices plunge and a stronger greenback is making it more expensive for overseas buyers."
In a light day for European economic news, attention is squarely focus on the policy statement from the Federal Reserve's FOMC meeting which concludes late Wednesday European time, while also keeping watch on events in Greece.
"While investors will have one wary eye on events in Athens, their other preoccupation today will be the first Federal Reserve policy meeting of 2015, for clues as to the potential timing of a US interest rate rise, which on the basis of recent data and events, could well have been pushed back," CMC's Hewson adds.
In Asia, Japan's Nikkei closed up 0.2% at 17,795.73 Wednesday, buoyed by a weaker yen. The Hang Seng in Hong Kong is 0.3% higher at 24,877.17 and the Shanghai Composite is down 1.1% at 3,316.93.
Brent crude is quoted at around USD48.94 a barrel Wednesday, and US benchmark West Texas Intermediate is quoted at USD45.35 a barrel. Gold is steady, quoted Wednesday morning at USD1,290.30 an ounce.
Among UK companies, miners Anglo American, Antofagasta and Fresnillo release production updates and AG Barr, Sage Group and Johnson Matthey provide trading statements.
US earnings later Wednesday include Boeing, Citrix Systems, Facebook, Fiat Chrysler Automobiles, General Dynamics and Qualcomm.
By Ian Edmondson; [email protected]
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Anglo AmericanSage GroupJohnson MattheyBarr (A.G.)Fresnillo