By Shreyashi Sanyal
(Reuters) – London-listed stocks fell for the third straight session on Wednesday, as investors turned cautious ahead of a policy decision by the U.S. Federal Reserve later in the day.
The blue-chip FTSE 100 (FTSE) closed 0.1% lower and the British mid-cap index (FTMC) 0.8% down. Cyclical stocks including banks (FTNMX8350), life insurers (FTNMX8570) and oil & gas stocks (FTNMX0530) ended lower for the day, pointing to reduced risk appetite.
Focus remains on the Fed’s economic outlook and chairman Jerome Powell’s speech, after the central bank’s dramatic monetary response to the COVID-19 pandemic, which was well-received by global equity markets.
“The Federal Open Market Committee (FOMC) decision tonight promises to be a significant one for markets,” said Stephen Innes, chief global market strategist at AxiCorp.
“Risk-on positions have been reduced, and we could see more equity hedges put on in case the Fed signals it is now done (providing more stimulus) for the time being.”
Travel and leisure stocks, including airline EasyJet (L:EZJ), cinema operator Cineworld (L:CINE) and cruise operator Carnival (L:CCL), were among the biggest decliners.
Carnival, which is slated to leave the FTSE 100 later in the month, fell 9.8%.
British stocks are now headed for their first negative week in four as a rally in the recent few weeks, which stemmed from hopes of a quicker recovery from the coronavirus-induced economic slump, ran out of gas.
London-listed shares of European food ordering firm Just Eat (LON:JE) Takeaway.com (L:JETJ) fell 13%, to the bottom of the FTSE 100, as it said it was in advanced talks to buy Grubhub Inc (N:GRUB) in an all-stock deal.
Rolls Royce (L:RR) slipped 4.5% after being removed from Goldman Sachs (NYSE:GS)’ conviction list, which is the bank’s top picks for high net worth clients.
