21st Aug 2019 11:57
(Alliance News) - Modest gains at the start of Wednesday's session accelerated as the day progressed, with the FTSE 100 aided by a softer pound as UK Prime Minister Boris Johnson heads for a meeting with Germany's Angela Merkel.Market focus, however, lies on the release of the US Federal Reserve's minutes from its July monetary policy meeting after the London market close for clues over further interest rate moves in 2019.The FTSE 100 was up 75.18 points, or 1.1%, at 7,200.18. The FTSE 250 was up 158.67 points, or 0.8%, at 19,166.76 and the AIM All-Share was up 0.4% at 869.30.The Cboe UK 100 index was up 1.1% at 12,201.62. The Cboe UK 250 was up 0.9% at 17,060.42 and the Cboe UK Small Companies was 0.1% lower at 10,878.50.In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were 1.4% and 1.1% higher respectively in afternoon trade."After a cautious Asian session, European markets are advancing in early trade on Wednesday. Investors await fresh clues on US monetary policy and digest political developments in Italy along with no deal Brexit preparations," said Fiona Cincotta at City Index.With little in the European economic calendar, focus lies on the Federal Reserve's minutes from July's policy meeting at 1900 BST."The minutes will give investors an insight into policy maker deliberations prior to the first interest rate cut in a decade. Will Fed Powell and co stick to the 'mid cycle adjustment line or will they give something else to the markets?" Cincotta questioned.Ahead of the minutes, New York is called for a higher open. The Dow Jones is seen up 0.6%, with the S&P pointed 0.7% higher, while the Nasdaq is on course to add 0.9%.The minutes come ahead of Fed Chair Jerome Powell's appearance at the Jackson Hole symposium, which kicks off on Thursday.Alex Kuptsikevich, a financial analyst at FxPro, noted: "In the past, this summit has been used by the Fed in times of uncertainty to communicate with markets on important issues."As Jackson Hole looms, President Donald Trump downplayed concerns over a possible recession in the US as he urged the Federal Reserve to cut interest rates by 100 basis points."We are very far from a recession," Trump said at the White House on Tuesday, accusing some members of the news media of wanting to see a downturn."We really need a Fed rate cut," Trump said, arguing that there cannot be a large "disparity" between rates in the US and elsewhere in the developed world. "We have to at least keep up to an extent."Turning to the UK, City Index's Cincotta said a softer pound on Wednesday is providing support to the overseas earnings-heavy FTSE 100."No deal preparations are starting to unnerve pound traders once again," said Cincotta. "Whilst Boris Johnson is due to visit Angela Merkel and France's President Macron, the chances of the EU ditching the Irish backstop are slim at best."Johnson on Wednesday will travel to Berlin where he will discuss Brexit-related issues with the German premier over dinner, before heading to Paris on Thursday to meet Macron.The meetings come as Johnson reiterated his opposition to the Northern Irish backstop, saying he will not support any withdrawal agreement that includes it, and as Brexit Secretary Stephen Barclay said UK ministers and officials will no longer attend most EU meetings from September 1.On Saturday, Johnson will be at the G7 summit where he will meet other world leaders including US President Donald Trump.Sterling was quoted at USD1.2124 at midday, versus USD1.2152 late Tuesday.The FTSE 250, meanwhile, was being lifted by some ratings upgrades for Victrex, Tullow Oil and Capita.Victrex shares climbed 5.0% after Barclays lifted the polymers company to Equal Weight from Underweight, while Tullow Oil was 4.2% higher after Peel Hunt started the oil firm at Buy."Victrex is still at the mercy of volatile market conditions in autos and electronics especially but our new, no-deal base case for Brexit introduces powerful mitigating forces in the form of a weaker GBP," Barclays commented.Capita was up 2.6% after Goldman Sachs raised the outsourcer to Buy from Neutral.Towards the other end of the mid-cap index were OneSavings and Charter Court Financial Services, down 5.1% and 4.8% respectively.Both lenders reported loan book growth ahead of their planned merger, though both saw interim profit dip.OneSavings and Charter Court agreed an all-share merger in March, with OneSavings offering 0.8253 of a share for each Charter Court share. Under the deal, Charter Court shareholders will own 45% of the group and OneSavings the rest.OneSavings's net loans at June 30 stood at GBP9.9 billion, 22% higher year on year from GBP8.1 billion and 10% higher from the GBP9.0 billion seen at the end of 2018. Pretax profit fell slightly to GBP91.0 million from GBP91.8 million the year before. OneSavings booked a GBP5.9 million charge in the half for expenses related to its merger with Charter Court.Meanwhile, Charter Court saw its loan book end the half at GBP7.0 billion, 23% higher than GBP5.7 billion a year before and 4.5% higher than GBP6.7 billion at the end of 2018.Similar to OneSavings, Charter Court's pretax profit slipped in the first half, declining 11% to GBP82.6 million from GBP93.1 million a year before. The decline included a GBP3.8 million charge from the proposed merger.Elsewhere on the Main Market, Costain shares jumped 11% after saying it is on track to deliver growth in 2020 after a significant decrease in earnings in the first half of 2019 due to contract delays.The infrastructure construction and engineering firm said its revenue declined 22% in the six months to the end of June to GBP594.1 million from the GBP758.7 million reported a year earlier, resulting in a reduction in pretax profit to GBP8.4 million from a restated GBP19.9 million.Nostrum Oil & Gas was down 16%. Berenberg double-downgraded the stock to Sell from Buy.On Tuesday, the firm closed down 6.7% after revealing interim earnings fell amid lower production. Nostrum's revenue declined 9.0% to USD174.2 million, with earnings before interest, taxes, depreciation and amortisation falling 2.7% to USD110.2 million. Nostrum produced 31,096 barrels of oil equivalent per day during the first six months of 2019, 4.4% lower than the first half of 2018.