FTSE closes lower ahead of Fed decision
Dixons tumbles but Punch Taverns jumps
Pound gains against the dollar to $1.2704
FTSE 100 shares ended lower on Wednesday as investors sat it out ahead of the US Federal Reserve’s much-anticipated rate decision, with electronics group Dixons Carphone (LON:DC.) bearing the brunt of any negative sentiment.
The blue-chip FTSE 100 closed down 0.3% at 6949 and led by Dixons, down 6.6% at 342.6p - despite a 19% rise in half-yearly pre-tax profits, as it warned that "more uncertain times" lay ahead.
The US central bank is widely expected to hike rates by 25 basis points at 1900 GMT. But investors are already looking further ahead into how many rate hikes might accompany a Donald Trump administration of reflationary job-creating policies. Read more.
The top blue-chip riser was Polymetal International (LON:POLY) after broker UBS stays at neutral with a target price of 790p. A day earlier RBC downgraded the stock and shares tumbled. On Wednesday, shares closed up 6.4% at 805.5p.
The mid-cap FTSE 250 index closed down 0.2% at 17,682 and led by JD Sports Fashion plc (LON:JD.) down 7.1% to 313.6p after a Channel 4 television undercover investigation claimed to have found conditions in the retailer’s Rochdale warehouse were "worse than a prison".
The FTSE Small Cap index edged higher by 0.07% to 5034 and was led by Sepura Plc (LON:SEPU), up 17.8% to 24.25p. Meanwhile, the FTSE AIM 100 closed up 0.6% at 3965 and led by Burford Capital Ltd (LON:BUR), up 17.1% to 562.5p after the legal finance firm Burford Capital announced it had agreed to buy rival GKC Holdings, a law-focused investment manager, for $160mln in cash and loan notes. A further $15mln will be paid depending on GKC contributing $100m in income.
The FTSE AIM All-Share Index closed up 0.5% at 825.
The top gainer in London was Punch Taverns (LON:PUB), up 37.7% to 177p after the company announced it had received two cash offers, from Dutch brewer Heineken and Emerald Investment Partners.
Overall, 29% of stocks gained in London while 36% fell.
1200 GMT - FTSE100 quiet ahead of rate decision
FTSE 100 eases lower ahead of Fed meeting
Dixons leads fallers
Micro Focus best of the FTSE 100 gainers
12pm...Small Cap Movers
In the small caps, it was a good start to the day for specialist services and engineering firm TP Group PLC (LON:TPG) which was up 18% after it told investors full-year results will “significantly exceed” expectations.
TP said recent contract wins and a strong order book, including the two MoD contracts it inked over the summer, means underlying earnings for next year will also be “materially ahead” of expectations.
Another firm on the up was Plant Health Care PLC (LON:PHC), which gained more than 40% after telling investors that it had inked four new distribution deals.
The company – which provides natural biological treatments to farmers to help improve crop yields and fight off damaging diseases – said the agreements would help to drive sales growth in 2017 and beyond.
Elsewhere, Boohoo.com PLC (LON:BOO) was well in the black after telling investors it expects revenues and margins to be better than expected this year.
Shares were up 7% on the bullish trading update, which also revealed that the online retailer has snapped up a majority stake in the boss’ son’s company, PrettyLittleThing, for £3.3mln.
It wasn’t such an enjoyable for investors of MediaZest PLC (LON:MDZ) though, with the stock down more than 16% in early deals.
The audio visual marketing specialist posted a slight rose in profits for the six months to September, but an 8% fall in revenues didn’t seem to sit well with shareholders.
11.30am...
London’s blue chips were under the weather before some key interest rate announcements over the next 24 hours.
FTSE100 shed 11 points to 6,958 ahead of a predicted rise in US interest rates when the Federal Reserve finishes its meeting today.
US markets are already pricing in a rate hike, which means guidance is key said Mike van Dulken, head of research at Accendo Markets.
"How many rates hikes the Fed pencils in for 2017 is what will be the information that moves sentiment overnight."
The Bank of England will announce its next interest rate move tomorrow morning but few expect any change in its stance.
" It is a stone dead certainty that the Bank of England will keep interest rates and all other aspects of monetary policy unchanged next Thursday after its December MPC meeting – thereby bringing a tumultuous year to a quiet end on the policy front, " said Howard Archer at IHS Global Insight.
Company news wise, legacy software group Micro Focus International PLC (LON:MCRO) was the best of the risers after underlying earnings jumped by 22%. Shares rose by 6% to 2,264p. The group will soon be reversed into Hewlett- Packard’s software business.
Dixons Carphone (LON:DC.) had a less happy morning despite decent interim numbers.
Underlying profits rose by 19% but investors were more concerned about that comment that there were uncertain times ahead and the shares fell 7% to 341.5p.
7.02am ...FTSE100 set for low key start despite another US record
London’s blue chips are set for a muted start despite another night of new highs on Wall Street.
Financial spread bet firms see FTSE100 opening little changed from yesterday’s close of 6,968 even though US markets made big gains ahead of the latest announcement from the US Federal Reserve.
The Dow Jones Industrial Average closed within sight of the 20,000 mark, with a 115 point gain to 19,911 though this was off its best for the day. Nasdaq and the S&P 500 made even larger percentage gains.
Most commentators expect another interest rate rise to be the conclusion of the Fed today.
The view at the previous meeting was that the case for a rate hike has continued to strengthen but the central bank needed 'further evidence of progress towards its objectives'.
Economists says jobs, GDP data and so on has shown that to be the case, which may mean the key for stock markets to make further gains may be the comments about rate rises through 2017.
Asian markets were mixed with decent gains in Hong Kong, a modest rise in Tokyo and a small loss in Shanghai.
Newspaper headlines
Sky and Fox could use their combined financial firepower to dominate European football broadcasting, City analysts said as UEFA kicked off an auction of rights to its club competitions, reports the Telegraph.
BP is struggling to maintain safety standards at some of its biggest manufacturing sites, according to a leaked internal report that has exposed serious flaws in its monitoring of operations at refineries and chemicals plants, writes the Times.
Marks & Spencer is on the hunt for a chairman to return the High Street giant to its former glories. Robert Swannell’s reign at M&S has been overshadowed by the dismal performance of the fashion arm and, in particular, the crucial womenswear department, reports the Mail.
The boss of UniCredit plans to raise €13bn (£10.8bn) from investors, slash thousands of jobs, shed billions of euros of bad loans and has docked his own pay as he battles to shore up the balance sheet of Italy’s biggest bank, reports the Telegraph.
Mobile phone companies should be required to provide customers with a basic service wherever they live, work and travel in Britain, the government’s independent infrastructure watchdog says today. The country is falling behind, with a better service available in Romania, Albania, Panama and Peru on the most advanced mobile networks, warns the National Infrastructure Commission (NIC), reports the Times.
Civil servants across Whitehall are complaining that they are being asked to draw up departmental plans for 2019 before there is any clear picture of Britain’s Brexit deal, reports the FT.
More than 1,000 bank branches have closed in the UK during the past two years as pressure mounts on lenders to cut costs and as more customers turn to mobile banking. HSBC has shut the most outlets of any bank since the start of 2015, the FT writes.
Commodities/currencies
Gold up US$5.4 to US$1,164
Oil up US$0.6 to US$52.38
Sterling rose slightly to US$1.2661