Stock markets took the Federal Reserve’s statement on stimulus tapering in their stride as investors liked the news that the central bank would be patient about raising interest rates. US markets ploughed ahead with the S&P 500 hitting another record high.
Russ Mould, investment director at AJ Bell, said: “The key point to consider is that the Fed didn’t shock anyone. Markets hate surprises and the central bank’s statement was as dovish as it can get, which is like a hot water bottle on a cold winter’s day from an investor’s perspective.
“The FTSE 100 advanced 0.3% to 7,268, driven by oil, tobacco, miners and telecoms stocks.
“The index will be closely watched later today when the Bank of England announces its latest interest rate decision. Pressing the button on higher rates could potentially drive up sterling and weigh on the large number of FTSE stocks which earn in foreign currencies.
“Yet realistically it is hard to see the Bank of England push through an aggressive rate hike today, so sterling may not move too much. In early trading ahead of the rate decision sterling traded 0.4% lower against the US dollar at $1.3642.”