UK’s FTSE 100 closed flat on Wednesday, as investors maintained caution ahead of the U.S. Federal Reserve’s interest-rate decision later in the day, while gains in energy stocks kept declines in check.
The blue-chip FTSE 100 was little changed, while the domestically focused FTSE 250 index edged 0.1% higher.
Energy stocks topped sectoral gains, lifted by higher oil prices on hopes of rising U.S. fuel demands and a possible limited ceasefire between Ukraine and Russia. [O/R].
In a week packed with central bank meetings, the Fed’s policy decision takes center stage later in the day. While no change to the benchmark interest rate is expected, policymakers’ projections on future rate cuts and economic growth will be in focus.
The Bank of England is also expected to stand pat on Thursday, though close attention will be paid to discussions between dovish and hawkish policymakers for clues on future rate cuts.
Markets have priced in at least two rate cuts from both the BoE and the Fed this year, as investors grapple with the possible economic impact of escalating trade wars.
UK blue-chips are still outperforming the S&P 500 for the year.
Compass Group was the top FTSE 100 decliner, dropping 4.7% after Exane BNP Paribas downgraded the catering company’s stock to “underperform” from “outperform.”
IT services provider Softcat led FTSE 250 gains, rising 6.5% after raising its 2025 operating profit growth forecast.
Shares of Ukraine-focused Ferrexpo fell 5.6% after the premium iron ore pellet producer reported a surprise loss and as an end to the war with Russia remained unclear.
Drugmaker GSK’s shares dropped 1.7% after the U.S. health department said it was reviewing the future of its HIV prevention division.
Elsewhere, data showed pay increases granted by British employers have fallen back in line with inflation for the first time since October 2023, according to human resources data firm Brightmine.
(Reporting by Ragini Mathur and Lisa Mattackal
