London stocks bounce after 2 days of fall, Fed decision eyed

"Investors are buying into a rally based on previous dips, while trade today is quite calm as opposed to previous days, as investors are keeping a keen look on the economic projections that the Federal Reserve will come up with later this evening," said Connor Campbell, trader at SpreadEx.Travel and leisure-related stocks, including airline EasyJet , cinema operator Cineworld and cruise operator Carnival, also rose.

London-listed stocks bounced on Wednesday with cyclical stocks, which fell significantly in the past two sessions, leading gains ahead of a policy decision by the U.S. Federal Reserve later in the day. In early trading, the blue-chip FTSE 100 gained 0.7% and the British mid-cap index 0.8%. Banks, life insurers and miners also climbed.

Focus remains on the Fed's economic outlook and chairman Jerome Powell's speech, after the central bank's dramatic monetary response to the COVID-19 pandemic, which was well-received by global equity markets. "Investors are buying into a rally based on previous dips, while trade today is quite calm as opposed to previous days, as investors are keeping a keen look on the economic projections that the Federal Reserve will come up with later this evening," said Connor Campbell, trader at SpreadEx.

Travel and leisure-related stocks, including airline EasyJet , cinema operator Cineworld and cruise operator Carnival, also rose. Carnival, which is slated to leave the FTSE 100 later in the month, topped the index with a 3.1% gain.

British stocks have regained ground in the last two weeks as investors remained optimistic of a quicker recovery from the coronavirus-induced economic slump. Rolls Royce fell 1% after being removed from Goldman Sachs' conviction list, which is the bank's top picks for high net worth clients.

Quiz's shares surged 18.5% as the British fashion retailer said it would place its stores unit into administration and then buy the business back so it can try to renegotiate better rental terms.