21st Aug 2024 12:07
(Alliance News) - Stock prices in Europe edged higher going into Wednesday afternoon, ahead of the release of the latest minutes from the US Federal Reserve's meeting.
Investors will be looking to tonight's reading not only for clues on the number of rate cuts from the US this year, but also for hints as to the contents of Fed Chair Jerome Powell's speech at Jackson Hole on Friday.
The FTSE 100 index was up 13.23 points, 0.2%, at 8,286.55. The FTSE 250 was up 41.77 points, 0.2%, at 21,027.92, and the AIM All-Share was up up just 0.50 of a point, 0.1%, at 774.54.
The Cboe UK 100 was up 0.2% at 828.20, the Cboe UK 250 was up 0.1% at 18,457.37, and the Cboe Small Companies was up 0.6% at 16,967.46.
In European equities on Wednesday, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt was up 0.4%.
Eyes this week have been on the US and the trajectory of interest rates.
Investors took a cautious approach ahead of minutes of the US Federal Reserve, which might shed light on what officials discussed at the latest policy meeting late last month.
Jerome Powell will speak at Jackson Hole central bank economic symposium in Wyoming on Friday.
Stocks in New York were called to open mixed ahead of the FOMC minutes. The Dow Jones Industrial Average and the S&P 500 index were called up 0.1%, whilst the Nasdaq Composite is called down marginally.
Back in the UK, it looks like Chancellor Rachel Reeves will be facing further challenges ahead of her first budget this autumn after official figures revealed government borrowing jumped by far more than expected last month.
The Office for National Statistics said public sector net borrowing stood at GBP3.1 billion last month – GBP1.8 billion more than a year ago and the highest July borrowing since 2021.
The total for July was higher than the GBP1.1 billion most economists were pencilling in.
It comes after the new chancellor last month accused the previous Conservative government of leaving a GBP21.9 billion black hole in the public finances, through unfunded commitments that she said it had "covered up".
"This latest set of figures shows the parlous state of the public finances," said AJ Bell's Danni Hewson.
"Rachel Reeves expected to be faced with tough decisions when she walked through the doors of Number 11. Paying for past commitments must have a knock on effect to the plans which had been nurtured by a government in waiting."
The pound was quoted at USD1.3027 at midday on Wednesday in London, higher compared to USD1.3020 at the equities close on Tuesday. The euro stood at USD1.1117, up slightly against USD1.1105. Against the yen, the dollar was trading at JPY146.12, higher compared to JPY145.67.
In the FTSE 100, Barratt Developments edged up 0.1%. In the FTSE 250, Redrow rose 0.2%.
Barratt Developments acquisition of smaller housebuilding peer Redrow moved toward completion, as the UK regulator confirmed it is likely to accept the steps the two companies have offered to take to address competition concerns.
Leicestershire-based Barratt struck the GBP2.52 billion deal with Flintshire, Wales-based Redrow in February.
The merger then came under scrutiny from the UK's Competition & Market Authority, which launched a Phase 1 investigation in March.
Earlier this month, the CMA stopped short of pursuing a Phase 2 investigation after concluding that the combination only has a "high combined share" in just one local area of the country, which is Whitchurch, Shropshire.
To remove uncertainties, Barratt decided to waive the CMA condition, allowing the combination to proceed.
On Wednesday, the CMA said it "considers that there are reasonable grounds for believing that the undertakings offered by the parties, or a modified version of them, might be accepted by the CMA to remedy the substantial lessening of competition identified by the CMA".
Amongst London's small-caps, Mobico rose 14%. It pledged to take further steps to cut debt as it attempts to improve its financial position, which saw the firm pass on paying a dividend for the first half.
In the six months to June 30, the Birmingham-based transport operator, formerly known as National Express, said pretax loss narrowed to GBP1.5 million from GBP41.9 million a year prior. Revenue climbed 7.6% to GBP1.65 billion from GBP1.57 billion.
But the company passed on a half-year dividend compared with 1.7 pence per share last year. This reflects a commitment for debt and leverage reduction.
On AIM, Rosslyn Data Technologies surged 38%.
The London-based data management and analytics service provider said that it has won a new three-year contract with "one of the world's largest technology companies", which has a minimum revenue value of GBP2 million.
In a separate trading update, Rosslyn said it anticipates to announce a loss before interest, tax, depreciation and amortisation of GBP3.3 million for the financial year ended April 30, worse than GBP2.4 million a year prior but ahead of its own expectations. "The better-than-expected adjusted Ebitda performance reflects the board's strategic decision to prioritise sustainable growth and focus on the quality of revenues," it said.
Brent oil was quoted at USD77.47 a barrel at midday in London on Wednesday, up from USD77.41 late Tuesday.
Gold was quoted at USD2,506.00 an ounce, lower against USD2,512.24.
Still to come on Wednesday's economic calendar, there is producer price inflation data from Canada due out at 1330 BST.
By Sophie Rose, Alliance News senior reporter
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