US stocks opened near record highs today as attention turned to the Federal Reserve for cues on whether a jump in inflation will prompt a tapering in monetary policy.
The Dow Jones Industrial Average was up 0.1 per cent, while the S&P 500 opened flat, remaining near an all-time time.
Meanwhile, the Nasdaq Composite was down 0.3 per cent following a lengthy period in which tech stocks traded slightly higher.
The benchmark S&P 500, the blue-chip Dow and tech-heavy Nasdaq have gained 13.3 per cent, 12.3 per cent and ten per cent respectively so far this year due to economic optimism.
“If the Fed can convey to the market that they are going to continue to be patient and that they are not overly concerned about inflation, that continues to be a very solid set up for the equity markets,” said Larry Adam, chief investment officer of Raymond James.
“The big thing that people are going to focus on are the new projections, particularly on inflation.”
London’s FTSE 100 shot up today as gains in consumer staples and healthcare stocks lifted the index.
The blue-chips were up 0.4 per cent this afternoon, boosted by large dollar earning companies including Unilever, Diageo, and British American Tobacco.
Meanwhile, the mid-cap FTSE 250 dropped 0.2 per cent as gains were limited after government plans to lift Covid restrictions were delayed by a month.
There was good news on the jobs front, as the number of employees on British payrolls surged by a record 197,000 in May and unemployment fell to 4.7 per cent.
The FTSE indices have gained more than 11 per cent this year but they have traded in a narrow range since mid-April on concerns that a Covid resurgence might damage the recovery.
The afternoon’s biggest winner was takeaway giant Just Eat, who rose 3.3 per cent, followed by BT Group, up by three per cent.
Safety equipment firm Halma and Associated British Foods also rose 2.9 per cent and 2.8 per cent respectively.
Betting firm Flutter Entertainment was the afternoon’s biggest faller, dropping by 3.9 per cent, followed by miner Anglo American’s 3.7 per cent hit.
Meanwhile, Intermediate Capital Group and Antofagasta both dipped by three per cent and 2.5 per cent respectively.
Around the world
Asian shares had a mixed day today ahead a much-anticipated Federal Reserve policy meeting, which investors are watching for hints of any change to monetary policy.
Japan’s Nikkei rose 1.1 per cent, while Chinese blue chips fell one per cent.
The Australian benchmark advanced 0.9 per cent, while MSCI’s broadest index of Asia-Pacific shares outside Japan traded flat.
“I suspect in the next 24 to 48 hours we’ll see a lot of chop, first on the upside, then a little correction as the market positions itself, and then we’re off to the races if we get the green light from the Fed Thursday morning,” said Kyle Rodda, market analyst at brokerage IG.