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FTSE 100 Live: Stocks called lower after Fed's hawkish hold; L&G names new CEO

Published 15/06/2023, 07:45
© Reuters.  FTSE 100 Live: Stocks called lower after Fed's hawkish hold; L&G names new CEO

Proactive Investors - Legal & General Group PLC (LON:LGEN) has named António Simões as its Chief Executive, succeeding Sir Nigel Wilson who is stepping down after 11 years at the helm.

Simoes joins from Banco Santander (BME:SAN) where he has been Regional Head of Europe since September 2020. He has Santander's businesses in the UK, Spain, Portugal and Poland, working across retail and commercial banking, corporate and investment banking, wealth management and insurance.

Prior to joining Santander, he spent 13 years at HSBC (LON:HSBA), including as CEO of UK and Europe, and latterly CEO of Global Private Banking, based in London and Hong Kong. He is a former McKinsey & Company partner.

Sir John Kingman, Chair, said Simoes “brings a formidable leadership track record at the most senior level of financial services.”

FTSE called lower after Fed's hawkish hold

The FTSE 100 is expected to open lower after the US Federal Reserve left interest rates unchanged but signalled further hikes were on the way.

Spread betting companies are calling London’s lead index down by around 10 points.

"Nearly all committee participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year. But at this meeting, considering how far and how fast we’ve moved, we judged it prudent to hold the target range steady," Fed Chair Jerome Powell told reporters at his post-meeting press conference.

Most committee members are projecting two additional quarter-point increases this year in a move that would lift the benchmark rate to between 5.5% and 5.75%, according to an updated “dot plot” published on Wednesday.

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US markets ended mixed on the news. The Dow Jones Industrial Average closed down 232.79 points, or 0.7%, at 33,979.33. The S&P rose 3.58 points, 0.1%, at 4,372.59, and the Nasdaq Composite gained 53.16 points, 0.4%, at 13,626.48.

James Knightley at ING Economics called it a "hawkish hold."

Although Powell indicated July is a 'live' meeting, a one-meeting pause "makes little sense" given the long lags involved with monetary policy, he felt.

"With the disinflationary trend set to accelerate, we see an extended pause," he said.

In Asia, markets rose as after the People’s Bank of China cut its medium-term policy rate in the face of slowing economic growth. Retail sales and industrial production figures both came in below forecast.

The gains came after the PBoC lowered its medium-term lending facility rate by 0.1 percentage point to 2.65%, having cut its seven-day lending rate earlier in the week by the same amount.

The Shanghai Composite gained 0.6%, the Hang Seng in Hong Kong rose 1.6% and in Tokyo, the Nikkei advanced 0.3%.

Back in London, and the early focus will be updates from Halma (LON:HLMA) and Bunzl (LON:BNZL) while the European Central Bank will make its rate call later in the day.

The ECB is expected to increase rates by 25 basis points.

Read more on Proactive Investors UK

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Latest comments

This doesn't make sense. If the Fed put interest rates on hold why would they say further interest rate rises are on the way. If they were sure that interest rate increases are necessary in the future then why hold back now. The Fed has opened their mouth and said too much. Comments like that are only to signal they are tough on inflation but only the next time inflation. occured instead of being slow this time. Yet the market is du mb enough to think further rises are coming soon
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