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London pre-open: Stocks to stage small rebound after sell-off
LONDON (ShareCast) - UK stocks are expected to open with small gains on Thursday after a two-day sell-off wiped 2.2% off the value of the FTSE 100. City sources predict the FTSE 100 will open 20 points higher than Wednesday's close of 6,946.28.
The index has fallen for the previous two sessions as it pulled back from its record closing high of 7,103.98 on Monday.
The focus for UK investors will be on the Federal Reserve , after the US central bank announced its policy decision after the close on Wednesday.
Policymakers issued a cautiously optimistic outlook on the economy in their statement, saying that the current economic slowdown is only temporary. Data on Wednesday showed that annualised US gross domestic product growth slowed to just 0.2% in the first quarter from 2.2% previously.
Analysts at Danske Bank (Copenhagen: DANSKE.CO - news) reckon that the Fed is still on track to hike rates by 25 basis points in September.
"In our view, the statement is consistent with an FOMC that remains on track to hike rates this year, conditional on a rebound in GDP growth in the current quarter and employment, which accelerates to an above 200,000 per month average again in coming months," they said.
Stocks to watch Royal Bank of Scotland (LSE: RBS.L - news) made a £446m loss in the first quarter of the year, more than double what had been feared as it was hit by £453m of restructuring costs and set aside £856m for litigation and conduct charges. RBS, which had been expected to lose £176m, did raise adjusted operating profits 16% to £1.6bn.
Royal Dutch Shell (Xetra: R6C1.DE - news) saw unadjusted profits sank 56% in the first quarter as the impact of depressed crude prices hit its upstream division, prompting the oil major to trim its capital expenditure budget for this year. The Anglo-Dutch oil giant, set to take over BG Group (LSE: BG.L - news) in a £47bn deal, said current cost of supplies (CCS (Shanghai: 600180.SS - news) ) earnings excluding so-called identified items totalled just $3.25bn in the first three months of 2015, compared with $7.33bn the year before.
