Global markets flatline ahead of Fed interest rate decision

Global markets were broadly flat as traders sat in anticipation of the latest interest rate decision from the US Federal Reserve.

The London indices were mixed as trader’s cautiously predicted that rates will be held amid expectations the US central bank will maintain loose monetary policy to assist its economic recovery.

The FTSE 100 closed 2.2 points higher at 6,131.46p at the end of trading on Wednesday.

Connor Campbell, financial analyst at CMC Markets UK, said: “In a decidedly forgettable session, the markets moped about ahead of the month’s Federal Reserve rate vote, statement and press conference in the evening.

“No new policy announcements are expected from Jerome Powell and co – it is widely believed that the central bank is still trying to figure out its next step.

“However, the September meeting is looking like the next point of action, so any signal as to what that action might be will be much-welcomed by investors, even if it is just a reiteration of the promise to do whatever it takes.”

The Dow Jones nudged higher as it benefited slightly from the continued retreat of the dollar, which hit a two-year low.

Major European markets were broadly flat, although the French Cac 40 was a rare spark, shooting higher amid improving sentiment.

The German Dax decreased by 0.03%, while the French Cac moved 0.71% lower.

Meanwhile, sterling continued its recent strong spell against the dollar, once again taking advantage of weakness in the US greenback.

The pound rose 0.34% versus the US dollar at 1.297 and was down 0.14% against the euro at 1.102.

Housing firms drifted on the back of slight caution following their bounce in value on Tuesday, driven by reports that the Government is considering an extension of Help-to-Buy past the end of 2020.

The slump was also partly driven by a disappointing set of figures by FTSE 100 giant Taylor Wimpey, which said it expects home completions to fall by 40% in 2020.

Shares in the company plunged after it told investors the pandemic has had a “significant impact” on construction work and completions.

Taylor Wimpey closed 10.75p lower at 122.2p as a result.

Elsewhere, fashion retailer Next saw shares surge after it said the second quarter of the year was much better than it had expected as full-price sales dropped 28%. Shares closed 404p higher at 5,666p.

Funeral firm Dignity soared in value as it said that the proportion of “simple and limited service” funerals it performed tripled in April, May and June.

It saw shares rise by 86.5p to 330p at the close of play.

Insurance firm Hastings saw shares jump by 30.6p to 200.6p after it confirmed it is in talks with a consortium backed by Finnish insurer Sampo over a potential takeover.

The price of oil nudged higher as it was confirmed that US stockpiles tumbled lower. The price of a barrel of Brent crude oil increased by 1.32% to 43.8 US dollars.

The biggest risers on the FTSE 100 were Next, up 404p at 5,666p, Smurfit Kappa, up 118p at 2,600p, Burberry, up 46.5p at 1,306.5p, and JD Sports, up 17p at 622p.

The biggest fallers of the day were Taylor Wimpey, down 10.75p at 122.2p, Barclays, down 6.84p at 105.02p, Rolls-Royce, down 9.5p at 253.1p, and Melrose, down 3.34p at 94.04p.

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