UK’s FTSE 100 index steadied on Wednesday as investors awaited a key US Federal Reserve monetary policy decision later in the day, with GSK leading healthcare stocks higher after raising its full-year forecast.
UK pharmaceuticals stocks rose 1.2% after GSK said it expects sales to rise between 8% and 10%, sending its shares up 1.2%.
The blue-chip FTSE 100 was flat, while the mid-cap FTSE 250 fell 0.4% by 0934 GMT, dragged down by budget airline Wizz Air after it said uncertainty for consumers rose.
Aston Martin slumped 13.9% after it blamed global supply chain issues, as the luxury carmaker cut its annual deliveries and margin forecasts.
Next Plc rose 2.1%, after the British clothing retailer stuck to its earlier guidance.
Investors globally remained optimistic ahead of what will likely be the Fed’s fourth straight 75-basis-point interest rate increase, with many hoping for signs of a slowdown in future rate hikes.
UK’s FTSE 100 edges higher, set for monthly gains
The Bank of England is also expected to tighten rates on Thursday by 75 basis points.
“They have their own reasons for raising rates, but are both facing the same issues – inflation,” said Raed Alkhedr, chief market analyst at Equiti Capital.
Third-quarter earnings among companies on the FTSE 100 have so far painted a mixed picture, as some firms performed better than expected as COVID restrictions eased globally, while some battled supply chain snags and surging inflation.
“It is after a certain level that interest rate hikes start hitting company results… So, I think that during the first quarter of the coming year, a recession will be so clear such that we are going to start feeling the impact on results,” Alkhedr said.
British American Tobacco Plc fell 3%, to the bottom of FTSE 100, after Goldman Sachs downgraded its performance rating for the stock to “neutral”.
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