London stocks are set to open slightly lower on Wednesday as renewed tensions in the Middle East pushed oil prices higher, while investors awaited the latest US Federal Reserve interest rate decision.
Futures indicate the FTSE 100 will open around 8 points lower, or 0.1%, at 10,860.62, after the index climbed 0.8% to 10,871.02 on Tuesday.
Oil prices rebounded after the US and Saudi Arabia carried out strikes against Iran-backed militants in Iraq following a series of drone attacks on US forces and Saudi energy infrastructure. Jordan’s military also said it intercepted and destroyed five Iranian missiles as hostilities resumed after a brief lull.
Brent crude rose to US$87.11 a barrel, while gold edged lower to US$4,030.65 an ounce.
Investors are now focused on the Federal Reserve’s policy announcement later on Wednesday. While economists overwhelmingly expect interest rates to remain unchanged, money markets continue to price in the possibility of further tightening before the end of the year.
Wall Street finished mixed overnight, with the Dow Jones Industrial Average climbing 537 points, or 1%, to close at 52,747. The S&P 500 added 0.2% to finish at a record high of 7,429, extending its recent gains. However, the technology-heavy Nasdaq Composite slipped 0.2% to 24,877 as semiconductor stocks remained under pressure.
Attention will also turn to the Bank of England, which is widely expected to leave rates unchanged when it announces its latest policy decision on Thursday.
Asian markets traded mixed overnight. Japan’s Nikkei 225 fell 1.7%, while Hong Kong’s Hang Seng gained 1.3%, China’s Shanghai Composite rose 0.8%, and Australia’s S&P/ASX 200 added 1.0%.
Among corporate movers, Standard Chartered jumped 5.8% in Hong Kong after reporting record first-half results, announcing a US$1 billion share buyback and upgrading its full-year income guidance.
