* Rexam and Mondi buoyed by bullish BoAML note
* FTSE edges higher in early session trading
* Most traders still expect no Fed tapering in December
By Sudip Kar-Gupta
LONDON, Dec 18 Britain's main equity index crept
up on Wednesday as investors bet the U.S. Federal Reserve would
not scale back an economic stimulus programme this month, and an
upbeat broker note lifted canmaker Rexam.
The blue-chip FTSE 100 index was up by 0.3 percent,
or 20.21 points, at 6,506.41 points in early session trading.
The main focus for many investors was the conclusion of a
U.S. Federal Reserve meeting on Wednesday, with the Fed due to
issue a statement at 1900 GMT.
The FTSE has lost ground over the last week as strong U.S.
economic data fuelled speculation the Fed may trim a bond-buying
programme, aimed at boosting the economy, which has curbed
returns on debt and driven money into stocks since September
However, while some investors have braced themselves for the
Fed to start tapering the programme in December, the majority
say they do not expect any scaling back until March.
Securequity sales trader Jawaid Afsar said the FTSE 100
would rally after the Fed meeting was over, and could end 2013
in the 6,700-6,750 point range. The FTSE remains up by around 10
percent since the start of 2013.
"It's a case of 'sell the rumour and buy the news' with the
Fed. I'm expecting from this point a rally going into the
year-end," he said.
Rexam rose 1.4 percent to top the FTSE 100 leaderboard while
rival packaging group Mondi also gained 0.6 percent,
with both stocks buoyed by an upbeat note on the sector from
Bank of America Merrill Lynch.
Bank of America Merrill Lynch kept a "buy" rating on Rexam
and upgraded Mondi to "buy" from "neutral", arguing that the
overall paper and packaging sector would grow in 2014.
"We expect further recovery in 2014 and average EPS
(earnings per share) growth of 27 percent," the investment bank
wrote in a research note.