London pre-open: Stocks seen lower as investors eye Fed rate announcement

(Sharecast News) - London stocks were set to edge down at the open on Monday as investors eyed this week's policy announcement from the US Federal Reserve.

The FTSE 100 was called to open around 16 points lower.

Ipek Ozkardeskaya, senior analyst at Swissquote, said: "The good news for them is that a 25 basis points Fed cut on Wednesday is essentially locked in. The recent weakness in employment data and a stable, up-to-date PCE print support that decision.

"But what happens next is the part no one agrees on. The FOMC is divided. Some members worry that tariff-driven inflation could offset disinflationary forces and argue for caution - versus those pushing for quicker cuts, in line with political pressures and public preference.

"The base case is that politics will dominate and that rates will continue to move lower as the committee rotates toward members more aligned with the incoming administration's views, starting with a new Federal Reserve (Fed) Chair.

"But here is the risk: if the Fed delivers politically driven cuts without economic justification, markets could push back and long-term yields could rise."

Rate announcements are also due this week from the Reserve Bank of Australia, the Bank of Canada and the Swiss National Bank, all of which are expected to keep rates unchanged.

In corporate news, oil and gas company Harbour Energy said it has agreed to sell its operated interests in the Natuna Sea Block A field and the Tuna development project in Indonesia to Prime Group for $215m in cash.

The FTSE 250 firm said the sale was subject to customary regulatory approvals, with completion targeted for the second quarter of 2026.

Medical devices group Smith & Nephew unveiled plans to downsize its portfolio, alongside an increase in full-year guidance. Updating shareholders ahead of a capital markets day in London, S&N said it had identified opportunities to "simplify" its product range.

Long-term, it expects the rationalisation to reduce gross inventory by around $500m and lead to a "significant" reduction in capital requirements.

It will, however, take a non-cash provision in the 2025 accounts of $200m as a result of the shake-up.

Oxford Nanopore Technologies said it has appointed Francis Van Parys as chief executive, succeeding Gordon Sanghera, who has led the company since its inception in 2005.

Van Parys is currently president and CEO of acute care diagnostics company Radiometer, part of Danaher Corporation.

Sanghera will step down from the board on 2 March and remain as an employee in an advisory capacity through to early 2027.