London - Britain's top share index edged higher on Wednesday, helping higher by strength in Smiths Group and banks, but with gains seen capped until after the US Federal Reserve's policy meeting.
The Fed is widely expected to reduce its $85 billion in monthly asset purchases - Reuters polls suggest by $10 billion - after UK markets close on Wednesday, although some traders are positioning themselves for a different number.
“I actually think that they will taper QE by about $15 billion dollars, which is at the upper end of predictions but is basically priced in,” Fawad Razaqzada, market strategist at GFT, said.
“However, a few people are even suggesting that because of weaker US data recently, the Fed may maintain the current pace of asset purchases, which would be very supportive for the FTSE.”
The FTSE 100 edged 0.2 percent higher, up 11.51 points to 6,581.64, the session after a 0.8 percent drop took the index off of 1-1/2 month highs.
The next resistance for the index was at 6,700, around the previous July high, while support was seen for the index just above 6,350, at the 200 day moving average, said Ioan Smith, director at KCG.
Hi-tech engineering company Smiths Group rose 3.3 percent, the top FTSE riser, after annual results revealed a slight rise in profits and an unexpected special dividend.
“The FY13 results appear broadly in-line with expectations, but there is a special dividend of 30p that is likely to be well-received,” analysts at Jefferies said in a note.
Barclays was among the top traded stocks, with volume of 77 percent of its 90 day average, compared with 35.8 percent on the broader index. The share went ex-rights on Wednesday.
The bank traded at 279.3 pence, representing a 1 percent rise based on its theoretical ex-rights price (TERP) of 276.3 pence, but down 6 percent from its previous close at 299 pence.
In all, financials added 11 points to the index, the top sectoral contributor to gains, and banks were four of the top five risers on the index
Ex-divs trimmed 0.36 points of off the FTSE 100 on Wednesday, as Antofagasta, Melrose and Petrofac all traded without entitlement to their latest dividend payout. - Reuters