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FTSE 100 seen higher after Wall Street climbs on Fed's Beige Book, commodities rise

The FTSE 100 is seen sharply higher with pre-trade projections foreseeing a 0.8% gain following a strong performance in the US and Asian stocks markets, which were recovering from Tuesday’s losses after the Fed’s Beige Book survey of regional business conditions shower further improvement in the economy and the negative effect from China's recent monetary policy decisions wore off.

The UK blue chip index also was in decline yesterday, shedding 0.5% with mining stocks leading the retreat.

Gold miner Randgold Resources (LSE: RRS) emerged as the heaviest faller in the index with a loss of nearly 2%, while London Stock Exchange Group (LSE: LSE) and interdealer broker ICAP (LSE: IAP) followed with declines of over 2%. Other notable fallers included platinum miner Lonmin (LSE: LMI) with a 2% loss, oil and gas supermajor Shell (LSE: RDSA) and service firm Amec (LSE: AMEC), which lost more than 1.5%, as did commercial property company British Land (LSE: BLND). Silver miner Fresnillo (LSE: FRES) and bank HSBC (LSE: HSBA) were down 1.5%.

Investment management company Schroders (LSE: SDR) emerged atop the leaderboard with a 2.7% climb, while bank RBS (LSE: RBS), oil and gas engineering company Petrofac (LSE: PFC), insurer Admiral Group (LSE: ADM) and packaging group Rexam (LSE: REX) followed with gains of over 2%.

In the US, the Dow Jones Industrial Average ended the day 0.5% higher, while the broader S&P 500 index rallied 0.8% and the technology heavy NASDAQ composite rose 1.1%.

Asian stocks were bullish today, tracking gains in the US and recovering from yesterday’s falls after China further tightened its monetary policy to curb the ongoing economic growth to prevent the economy from overheating.

Hong Kong’s Hang Seng index climbed 0.7%, China’s Shanghai composite index added 0.3%, Australia’s S&P/ASX 200 was up 0.6%, South Korea’s KOSPI advanced 0.9% and Japan’s benchmark Nikkei 225 index reached its highest closing level in 15 month after surging 1.6%.


Oil prices showed further improvement after declining on China’s policy decisions and US stockpiles data. February Brent Crude rose to US$78.85/barrel, while US light, sweet crude reached US$80.16/barrel.

Precious metals also advanced. Gold climbed back to US$1,141/oz, while silver and platinum rose to US$18.67/oz and US$1,581/oz respectively.

Base metals followed with copper and nickel reaching US$3.39/lb and US$8.29/lb. However, zinc declined to US$1.12/lb.

December retail sales and jobless claims data is due in the US today.

Disclosure: The author holds no positions in the company