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FTSE 100 falls with US Fed rate decision on horizon

FTSE 100 falls with US Fed rate decision on horizon

Investors remained cautious ahead of the U.S. Federal Reserve's interest rate decision scheduled for later that day.

The blue-chip FTSE 100 dropped 0.2% at 7.40 GMT.

Compass Group was among the biggest losers in the blue-chip index. Its shares dropped 4%, after Exane BNP Paribas lowered the stock's rating from "outperform" to "underperform."

Metal miners are weakening, with Fresnillo down 2%. Glencore dropped 1.5%, while Anglo American fell 1.3%. This was after HSBC lowered price targets for both mining companies.

The Federal Reserve's decision to change its policy is the highlight of a week that has been packed with meetings by central banks. The U.S. central bank is expected keep rates the same, and any future rate reductions to support growth are crucial.

On Thursday, the Bank of England is expected to keep its rate unchanged.

The markets have already priced in two rate reductions from the BoE and Fed this year.

The domestically-focused FTSE 250 index was flat for the day.

Softcat, a provider of IT services, led the gains in the midcap index. It surged 13% after it announced that its operating profit forecast for 2025 was to grow by a low-double-digit percentage, up from the previous high-single-digit estimate.

Goodwin, a mechanical engineering company, rose 4.7% following the announcement that its forward order book had reached a record PS300m ($389m) at the end of February.

Ferrexpo, a premium iron ore-pellet producer based in Ukraine, reported a 30% drop in its FY24 core profit.

Brightmine, a human resources data company, reported that the latest data shows British employers' pay increases have been in line with inflation since October 2023. (Reporting by Ragini Mathur in Bengaluru; Editing by Shreya Biswas)

(source: Reuters)