London stocks rise amid May Day holiday

The British stock market rose in low-volume deals on Wednesday, amid a public holiday in much of Asia and Europe, before the Federal Reserve's latest interest rate call and following disappointing US data. London's FTSE 100 index of top companies won 0.33 percent to 6,451.29 points, as dealers also absorbed better-than-expected British manufacturing data. The US central bank's Federal Open Market Committee (FOMC) will announce the outcome of its latest monetary policy meeting at 1815 GMT. Ahead of the decision, investors digested US jobs and manufacturing data. Payrolls firm ADP reported that the American private sector added only 119,000 jobs in April, the slowest job growth in seven months. Elsewhere, US manufacturing activity slowed sharply in April to the slowest pace of the year, the ISM report released Wednesday showed. "With European equities closed for the May day bank holiday, UK traders initially sent stocks (higher) as strong corporate earnings, optimism over a European rate cut and better than expected (British) PMI manufacturing numbers contributed to strong risk appetite early on," said CMC Markets trader Tobias Morris. "The bullish mood dissipated in afternoon trade however, as weaker than expected macro data from the States capped gains in the short term." In foreign exchange activity, the euro rallied to a nine-week high at $1.3243 on growing hopes of a rate cut from the European Central Bank this Thursday. The single currency later stood at $1.3186, up from $1.3165 late in New York on Tuesday. On the London Bullion Market, gold fell to $1,454.75 an ounce from $1,469 Tuesday. Later on Wednesday, the Fed is widely expected to maintain its extraordinary $85 billion-a-month bond purchasing programme. The central bank also was seen holding its key interest rate at zero to 0.25 percent, where it has been since December 2008. The Fed has already signalled that it would not raise the interest rate at least until unemployment falls below 6.5 percent or if inflation threatens its 2.0 percent annual target rate over the medium term. The ultra-low rate and the bond purchase programme, or quantitative easing (QE), are aimed at spurring growth in the economy and supporting recovery in the battered jobs market, where the unemployment rate is 7.6 percent. "Most investors expect the Federal Reserve to continue with their QE and bond purchasing stimulus plan to provide momentum to the economy," noted Currencies Direct dealer Amir Khan. Wall Street fell in midday trade Wednesday ahead of the Fed rate decision. The Dow Jones Industrial Average fell 0.42 percent to 14,777.30 points. The broad-based S&P 500 lost 0.43 percent to 1,590.89 points a day after hitting a new record closing high In Asian trade on Wednesday, Tokyo stocks fell 0.44 percent as the yen's strength and gloomy eurozone economic data offset positive sentiment after the S&P 500 closed at another record high. Markets in China, Hong Kong, South Korea, India, the Philippines, Malaysia, Thailand, Taiwan and Singapore were all closed on Wednesday for the May Day holiday.