London - Britain's main equity index crept up on Wednesday as investors bet the US Federal Reserve would not scale back an economic stimulus programme this month, and an upbeat broker note lifted canmaker Rexam.
The blue-chip FTSE 100 index was up by 0.3 percent, or 20.21 points, at 6,506.41 points in early session trading.
The main focus for many investors was the conclusion of a US Federal Reserve meeting on Wednesday, with the Fed due to issue a statement at 21:00 SA time.
The FTSE has lost ground over the last week as strong US economic data fuelled speculation the Fed may trim a bond-buying programme, aimed at boosting the economy, which has curbed returns on debt and driven money into stocks since September 2012.
However, while some investors have braced themselves for the Fed to start tapering the programme in December, the majority say they do not expect any scaling back until March.
Securequity sales trader Jawaid Afsar said the FTSE 100 would rally after the Fed meeting was over, and could end 2013 in the 6,700-6,750 point range.
The FTSE remains up by around 10 percent since the start of 2013.
“It's a case of 'sell the rumour and buy the news' with the Fed. I'm expecting from this point a rally going into the year-end,” he said.
Rexam rose 1.4 percent to top the FTSE 100 leaderboard while rival packaging group Mondi also gained 0.6 percent, with both stocks buoyed by an upbeat note on the sector from Bank of America Merrill Lynch.
Bank of America Merrill Lynch kept a “buy” rating on Rexam and upgraded Mondi to “buy” from “neutral”, arguing that the overall paper and packaging sector would grow in 2014.
“We expect further recovery in 2014 and average EPS (earnings per share) growth of 27 percent,” the investment bank wrote in a research note. - Reuters