FTSE 100 to start lower after Fed minutes confirm taper talk is building

The FTSE 100 is set to start Thursday on the backfoot as equity markets dampened sentiments following Federal Reserve policy meeting minutes which confirm the direction of travel, towards a tapering of stimulus. London’s blue-chip benchmark is seen close to 60 points lower with CFD firm IG Markets making a price of 7,084 to 7,087 with just over an hour to go until the open. Central bank asset purchasing is seemingly set to wind down, though a guessing game remains in regards to market expectations for the timing with most commentators predicting either Q4 2021 or Q1 2022 depending on the relative strength of key economic indicators in the United States. “Last nights Fed minutes didn’t add anything significant to the sum of overall knowledge about the central banks future intentions with respect to monetary policy that wasn’t already known beforehand,” said Michael Hewson, analyst at CMC Markets. The analyst added: “The minutes certainly don’t alter the expectation that a taper is on its way, its accepted wisdom now that discussions on a taper are likely to start soon, with a slowdown in purchases starting sometime in Q4, despite concerns about some weakness in the more recent data, particularly retail sales and consumer confidence.” On Wall Street, American equity benchmarks were all lit in red. The Dow Jones dropped 382 points or 1.08% to close at 34,960 whilst the S&P 500, similarly, ditched 1.07% to finish Wednesday’s session at 4,400. The Nasdaq lost 130 points or 0.89% to 14,525 and the small-cap centred Russell 2,000 index moved 0.84% lower to 2,158. In Asia, Japan’s Nikkei moved down 0.67% to 27,400 while Hong Kong’s Hang Seng gave up 1.4% to 25,505 and the Shanghai Composite nudged 0.24% lower to 3,477. Around the markets The pound: US$1.3715, down 0.3% Gold: US$1,778 per ounce, down 0.51% Silver: US$23.26 per ounce, down 1.05% Brent crude: US$67.40 per barrel, down 2.3% WTI crude: US$64.45 per barrel, down 3.2% Bitcoin: US$44,474, down 1.96% Ethereum: US$3,012, down 1.93% 6.50am: Early Markets - Asia / Australia Stocks in the Asia-Pacific region were lower on Thursday as Australian mining shares declined following an overnight decline in iron ore prices. Rio Tinto shares slipped 5.95% while Fortescue Metals Group declined 6.78% and BHP dipped 6.38%. Australia’s S&P/ASX 200 fell, with the index trading 0.33% lower. The Shanghai Composite in China slipped 0.2% and Hong Kong’s Hang Seng index slumped 1.41% In Japan, the Nikkei 225 fell 0.73% while South Korea’s Kospi declined 1.30%. READ OUR ASX REPORT HERE