Stocks subdued ahead of US GDP report

In mid-morning trading the FTSE 100 is down 15 points at 6536 while traders await the US GDP report at lunchtime.

European equities are drifting lower, as traders are sitting on the fence ahead of the US GDP report. Equity markets have been sliding since the Federal Reserve decided to keep its QE scheme unchanged last week. Since tapering was postponed last week, any positive news for the economy will be viewed as negative news for the equity market. Traders are also on edge over the debt ceiling talks: with the two sides engaged in a stand-off, investors are afraid we could see a repeat of August 2011 when the US was downgraded.

The London Stock Exchange benefitted from increased confidence in the equity markets, as more companies listed on the exchange. This offset the decline in trading volumes in Italian business. It is a mixed day for the travel industry: Thomas Cook revealed weak summer bookings, while TUI Travel upped its full-year profit guidance.

In the US, we are expecting the Dow to open 23 points higher at 15,300, as short covering in the US index futures pushes the market higher.

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