London open: Markets cautious ahead of FOMC meeting

13th Sep 2012 08:27

- Markets focus on FOMC announcement- Next sinks on gloomy outlook- BAE eases after strong surgeWith all eyes on a Federal Open Market Committee (FOMC) meeting today, UK stocks started flat on Thursday ahead of a key policy decision in the US."European headline shares opened tentatively this morning as investors repressed concerns over the Eurozone debt crisis and instead remained risk neutral as tensions began to build over whether the US FOMC will actually announce a further round of quantitative easing during a press conference today," said financial trader Shavaz Dhalla.According to analyst Henry Skeoch from Barclays Research: "Markets appear to be pricing in a high probability of the announcement of a round of monetary stimulus, as evidenced in part by the dollar selling off following the downside surprise to the non-farm payrolls release last Friday. As such, should the Fed fall short of market expectations, there may be risks of a reversal of the recent strong performance in risk assets and sharp sell-off in core rates."A major hurdle was cleared yesterday after the German Constitutional Court approved the European Stability Mechanism (ESM), clearing the way for Germany to sign the agreement into law.FTSE 100: Next, BAE are heavy fallers in the opening hourHigh Street retailer Next tanked early on after warning: "We remain cautious about the economic outlook.  Disappointing sales in an unusual August and early September reinforce the wisdom of this conservative approach." Revenues rose 4.8%, while profits increased 10.2% in the first half.Defence group BAE Systems was a heavy faller, pulling back after surging yesterday on discussions with aerospace giant EADS regarding a "possible combination" of the businesses.Accountancy software group Sage was leading the risers as big speculation continues to lift the stock. The Daily Mail reported earlier this week that private-equity firms KKR & Co and Blackstone could make a £5.58bn offer.British telecoms giant BT was extending yesterday's gains after sealing a "ground-breaking" £152m deal on afternoon for a range of exclusive live rights for Premiership Rugby, dealing a massive blow to current broadcaster BSkyB. FTSE 250: Premier Farnell, Imagination Tech head opposite directionsElectronics components supplier Premier Farnell gained after seeing the year-on-year decline in its top line slow in the second quarter, as it sacrificed margin to protect market share.The day after the much ballyhooed release of Apple's iPhone5, chip designer Imagination Technologies released a well-timed trading update in which it revealed its business momentum has continued in the new financial year. Nevertheless, shares fell sharply early on.Homewares retailer Dunelm rose after saying pre-tax profit climbed a better than expected 15.1% in the first half and while it remains cautious of the UK consumer environment it is confident in the future prospects of the business.FTSE 100 - RisersAmec (AMEC) 1,159.00p +1.76%BT Group (BT.A) 238.80p +1.53%Sage Group (SGE) 319.70p +1.40%Rolls-Royce Holdings (RR.) 838.00p +1.15%WPP (WPP) 846.00p +1.01%Whitbread (WTB) 2,256.00p +0.89%Vodafone Group (VOD) 175.50p +0.86%ARM Holdings (ARM) 559.50p +0.81%Rexam (REX) 428.60p +0.75%Aberdeen Asset Management (ADN) 296.40p +0.71%FTSE 100 - FallersNext (NXT) 3,366.00p -5.95%BAE Systems (BA.) 344.90p -5.14%Eurasian Natural Resources Corp. (ENRC) 326.60p -2.36%Vedanta Resources (VED) 964.00p -2.18%Lloyds Banking Group (LLOY) 37.69p -2.12%Kazakhmys (KAZ) 666.00p -1.77%Marks & Spencer Group (MKS) 369.30p -1.44%Rio Tinto (RIO) 3,036.50p -1.32%Glencore International (GLEN) 355.30p -1.20%Anglo American (AAL) 1,879.50p -1.16%FTSE 250 - RisersPremier Farnell (PFL) 180.00p +4.77%Ophir Energy (OPHR) 617.00p +3.70%Smith (DS) (SMDS) 185.60p +2.60%Dunelm Group (DNLM) 640.50p +2.48%Gem Diamonds Ltd. (DI) (GEMD) 182.80p +2.35%Centamin (DI) (CEY) 84.05p +2.25%Anite (AIE) 131.10p +2.02%Daejan Holdings (DJAN) 2,927.00p +1.88%Essar Energy (ESSR) 110.10p +1.85%Berkeley Group Holdings (The) (BKG) 1,492.00p +1.57%FTSE 250 - FallersImagination Technologies Group (IMG) 583.50p -4.34%JD Sports Fashion (JD.) 703.00p -2.90%Home Retail Group (HOME) 96.70p -2.72%Bumi (BUMI) 285.50p -2.59%Man Group (EMG) 81.30p -2.40%Talvivaara Mining Company (TALV) 152.90p -2.24%Hochschild Mining (HOC) 446.60p -2.00%Kenmare Resources (KMR) 39.55p -1.79%EnQuest (ENQ) 121.50p -1.78%Investec (INVP) 388.30p -1.70%BC