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UPDATE 1-UK stocks subdued ahead of Fed policy meeting outcome

· 03/17/2021 05:30
UPDATE 1-UK stocks subdued ahead of Fed policy meeting outcome

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Miners drag FTSE 100

Capita rises on restructure plan

SSP group slumps on grim outlook

FTSE 100 down 0.4%, FTSE 250 off 0.7%

Adds comment, updates prices

By Shivani Kumaresan

- British shares slipped on Wednesday, dragged by miners and energy stocks, as investors awaited the outcome of a U.S. Federal Reserve policy meeting to get cues about interest rates.

The blue-chip FTSE 100 index .FTSE was down 0.4%, with mining stocks, including Rio Tinto RIO.L, Anglo American AAL.L, and BHP Group BHPB.L, falling between 0.5% and 1%.

Oil heavyweights BP BP.L and Royal Dutch Shell RDSa.L were also among the laggards.

"It's all about the central banks, as we wait for the next move in the bond markets which is the driver," said Keith Temperton, a sales trader at Forte Securities.

"The Fed for sure doesn't want the yield to be higher, so they might come out with some control mechanism but I think they will hold until if and when the yields spike higher."

The FTSE 100 has rebounded more than 38% from a coronavirus-driven crash last year, but the pace of gains has slowed recently on fears a vaccine-led economic recovery could lead to higher inflation.

A spate of volatility in money markets has stoked speculation that Fed policymakers might be forced into a technical adjustment to the levers controlling its benchmark interest rate to ensure that it does not fall too low, but few expect them to act on the matter at this week's meeting. MKTS/GLOB

The domestically focused mid-cap FTSE 250 index .FTMC fell 0.7%, dragged by consumer discretionary and industrials stocks.

Retail investment platform Hargreaves Lansdown HRGV.L rose 1.1%, as it expects its profit for the year ending June 30 to be "modestly" above analyst estimates. nASN000YN3

Outsourcer Capita CPI.L rose 4.8%, after it said it plans to merge multiple businesses into two core operating divisions and raise 700 million pounds ($973.98 million) from other assets' sales. nL4N2LF1SC

Upper Crust owner SSP SSPG.L shed 5.3%, after it warned that revenue from its train and bus station businesses would not recover to pre-pandemic levels before 2024. nL4N2LF1US


($1 = 0.7187 pounds)


(Reporting by Shivani Kumaresan in Bengaluru; editing by Uttaresh.V and Rashmi Aich)

((Shivani.Kumaresan@thomsonreuters.com; +1 646 223 8780;))

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