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Fed hints at December rate rise; Lloyds; BT

Federal ReserveLondon stocks rose strongly ahead of the US Federal Reserve meeting which tonight confirmed no change on interest rates but hinted at a December hike.

In a statement it said: “In determining whether it will be appropriate to raise the target range at its next meeting, the Committee will assess progress–both realised and expected–toward its objectives of maximum employment and 2 percent inflation.

It was enough for investors to pencil in expectations of a December rate rise.

Earlier the FTSE closed up 72.53 points at 6,437.80 on expectations of no change this time.

A flurry of corporate announcements were led by Lloyds Banking Group which fell 3.4p to 74p after reporting a decline in third quarter underlying profit as it was hit by a further charge for insurance mis-selling.

However, the bank has its supporters. Russ Mould, investment director at AJ Bell, saidL “The underlying recovery at Lloyds continues and this will be music to the ears of private investors.

“Lloyds alone is forecast by analysts to deliver 27% of the FTSE 100’s dividend growth next year and Lloyds, Barclays and HSBC are forecast to grow their payments the most in cash terms in 2016, hiking their distributions by £1.5 billion between them, or 42% of the FTSE 100 total increment.

“Banks can therefore lay claim to being perhaps the single most important sector in 2016, with Lloyds the single most important stock within it, given projections for its dividend growth and the Government’s proposed disposal of its remaining stake in the spring.”

GlaxoSmithKline jumped after its third-quarter revenue and core earnings per share beat market expectations.

BT rose strongly on news that its £12.5bn acquisition of the EE mobile network has been provisionally approved by the Competition and Markets Authority without remedies. Its shares rose 16.7p (3.68%) to 468.65p.

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