26th Aug 2020 17:01
(Alliance News) -Â The FTSE 100 ended Wednesday's session on a muted note with markets cautious ahead of US Federal Reserve Chair Jerome Powell's update at the Jackson Hole central bank meeting.
London's mid-cap index, the FTSE 250, stormed ahead of its blue-chip counterpart thanks to strong share price gains for Provident Financial and WH Smith.
The FTSE 100 index closed up 8.59 points, or 0.1%, at 6,045.60. The FTSE 250 ended up 175.68 points, or 1.0%, at 17,753.57, and the AIM All-Share closed up 4.23 points, or 0.4%, at 965.72.
The Cboe UK 100 ended up 0.1% at 601.47, the Cboe UK 250 closed up 1.1% at 15,105.26, and the Cboe Small Companies ended up 0.1% at 9,475.72.
In European equities on Wednesday, the CAC 40 in Paris ended up 0.8%, while the DAX 30 in Frankfurt ended up 1.0%.
Stocks in New York were mixed at the London equities close, with the DJIA down 0.1%, the S&P 500 index up 0.5%, and the Nasdaq Composite up 1.3%.
"Equities saw limited movement on Wednesday as investors took stock of events and paused ahead of a speech on Thursday by Federal Reserve chairman Jerome Powell," said Russ Mould, investment director at AJ Bell.
Mould added: "Equities are unlikely to move too much until the speech is made, but afterwards we could see a sharp increase in trading activity on the markets as investors get a clearer picture of the Fed's intentions."
Looking to the start of the annual Jackson Hole central banking symposium, this year being held virtually, Goldman Sachs expects US Fed Chair Powell to reveal the key conclusions of the Fed's framework review.
"We expect the FOMC to adopt average inflation targeting. This would mean aiming for inflation somewhat above 2% when the economy is at or near full employment in order to offset inflation below 2% when the economy is depressed," said Goldman Sachs.
The dollar softened as Powell's appearance, due around 1500 BST on Thursday, loomed.
The pound was quoted at USD1.3186 at the London equities close Wednesday, higher compared to USD1.3123 at the close on Tuesday.
The UK Eat Out to Help Out scheme needs to be extended, small businesses have said.
The call comes as the popular initiative, which sees the cost of eat-in meals reduced three days a week, is due to finish at the end of August.
The government announced the scheme, in which diners' meals are slashed to half price up to the value of GBP10 per head during August, to help the hard-hit hospitality industry cope with the coronavirus crisis.
The Federation of Small Businesses has called on ministers to extend the scheme into September.
Meanwhile, Germany's furlough scheme, in place to stave off mass unemployment during the coronavirus crisis, will require a EUR10 billion injection from state coffers in order to fund its extension into next year, a government minister said on Wednesday.
The Federal Employment Agency will need to be subsidized with revenue from taxes in order to continue running the scheme, which covers the bulk of workers' wages for companies who have no work for them, Labour Minister Hubertus Heil said in Berlin.
Heil's Social Democrats and the Christian Democratic Union of Chancellor Angela Merkel agreed late on Tuesday to extend the programme, known as short-time work. Employers who sign up for the scheme by the end of the year can benefit for a period of 24 months, rather than 12, with the aid to be provided until the end of 2021 at the latest.
The euro stood at USD1.1819 at the European equities close Wednesday, flat against USD1.1818 at the same time on Tuesday. Against the yen, the dollar was trading at JPY106.16, down compared to JPY106.50 late Tuesday.
Brent oil was quoted at USD45.58 a barrel at the London equities close Wednesday, soft versus USD45.83 late Tuesday.
Gold was quoted at USD1,944.17 an ounce at the London equities close Wednesday against USD1,918.27 at the close on Tuesday.
Frensillo shares rose on the higher gold price, the precious metals miner ending up 2.9%. Peer Polymetal International ended up 1.4%.
Polymetal on Wednesday doubled its interim dividend as a much higher gold price boosted performance.
The average realised gold price for Russia and Kazakhstan-focused gold and silver producer Polymetal was USD1,551 per ounce in the six months ended June 30, a 25% jump from USD1,332 per ounce a year before. The average realised silver price also was higher, up 10% at USD16.7 per ounce from USD15.2.
Gold equivalent production rose 4% to 723,000 ounces in the half year, while gold sales came to 595,000 ounces, down 1% year-on-year due to "a lag between gold concentrate production and sales" expected to close in the second half.
Revenue jumped 17% to USD1.14 billion from USD941 million, and net earnings more than doubled to USD381 million from USD153 million.
With these strong results and in accordance with its dividend policy of paying 50% of underlying net earnings, Polymetal declared a USD0.40 per share interim dividend, twice its USD0.20 per share dividend the year before.
Elsewhere in London, AVEVA shares ended up 9.7% as the industrial software company extended gains after announcing on Tuesday it agreed to buy US rival OSIsoft for USD5 billion. The stock closed up 7.3% on Tuesday.
In the FTSE 250, Provident Financial surged 20% as it posted an interim loss but said its performance was better than expected at the start of the lockdown.
For the six months ended June 30, the subprime lender swung to a pretax loss of GBP28 million from a profit of GBP43.1 million a year prior. This was as revenue fell 11% to GBP445.6 million from GBP501.5 million.
The Bradford, England-based company blamed the swing to loss on lower revenue and higher impairment charges of GBP240.3 million, from GBP165.9 million a year before, due to the Covid-19 pandemic. However, it said its performance was better than its expectations at the start of the lockdown in March.
WH Smith closed up 8.2% after Goldman Sachs started the stationery and books retailer with a Buy rating.
Back in the FTSE 100, Rolls-Royce shares ended down 1.6% ahead of its interim results on Thursday.
Also due in Thursday's corporate calendar are half-year figures from advertising giant WPP, lender OneSavings Bank and betting firm Flutter Entertainment.
The economic calendar on Thursday has US initial jobless claims at 1330 BST and a GDP reading due at the same time. Focus will lie on the start of the Jackson Hole central bank meet.
By Lucy Heming;Â [email protected]
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