London close: Stocks mixed as investors hope for Fed pause

(Sharecast News) - London's equity markets ended Wednesday on a mixed note, but overall changes were minimal, as global investors cast their gaze westwards to the upcoming interest rate decision from the US Federal Reserve. The FTSE 100 nudged up marginally, closing 0.1% higher at 7,602.74, while the FTSE 250 slipped 0.07% to settle at 19,175.50.

Sentiment over the Fed's decision was given a boost late on Tuesday, after consumer inflation in the US fell below expectations, recording a 4% increase on a year-on-year basis.

In currency markets, sterling was last 0.65% stronger on the dollar to trade at $1.2694, while it managed gains of 0.04% on the euro to change hands at €1.1690.

"It has been a positive session for most indices, aside from the Dow, which has struggled thanks to weakness in healthcare stocks," said IG chief market analyst Chris Beauchamp.

"Investors seem relatively confident that the Fed will leave rates unchanged this afternoon - after all, yesterday's CPI continued the theme of weakening inflation, a motif matched by the PPI inflation this afternoon as well.

"Clearly the Fed will not rule out a July hike, but if it gives hints in that direction today stocks may see further gains."

UK economy grows in April, US producer prices fall

In macroeconomic news, the UK saw its economy grow in April, primarily propelled by a resurgence in the services sector, according to the Office for National Statistics (ONS).

GDP exhibited a 0.2% increase, coinciding with earlier forecasts, and signalling a recovery from a 0.3% slump recorded in March.

The services sector, which emerged from a 0.5% contraction in the prior month, was the driving force behind the resurgence, witnessing a growth of 0.3% in April.

However, not all sectors echoed this optimism, as April saw production output and the construction sector both decline, by 0.3% and 0.6% respectively, following growth in March.

Over the three months to April, economic growth was modest, registering an increase of just 0.1%.

"Gross domestic product bounced back after a weak March," said Darren Morgan, director of economic statistics at the ONS.

"Bars and pubs had a comparatively strong April while car sales rebounded and education partially recovered from the effect of the previous month's strikes.

"These were partially offset by falls in health, which was affected by the junior doctors' strikes, along with falls in computer manufacturing and the often-erratic pharmaceuticals industry."

On the continent, the eurozone saw a surprising surge in industrial production in April, recovering from a slump in the previous month, according to fresh official data.

Monthly industrial production in the single-currency bloc rose by 1% in April, which translated to a year-on-year increase of 0.2%.

That upward trend was largely due to a sharp uptick in the output of capital goods counterbalancing reduced production of consumer goods.

It followed a sharp downturn in March, where revised figures showed a 3.8% decrease.

Across the pond, May saw wholesale prices in the US drop more than expected, largely driven by falling energy and food prices, according to the Department of Labor.

In terms adjusted for seasonal fluctuations, final demand prices in May declined at a month-on-month pace of -0.3%, compared to an anticipated -0.1%.

As a result, the annual rate of producer price inflation slowed from 2.3% in April to 1.1% in May.

Miners rise, Entain tumbles on discounted placing

On London's equity markets, heavyweight mining firms reported gains, with Antofagasta leading the way with an increase of 3.48%, closely followed by Anglo American with a rise of 4.01%.

Rio Tinto Group and Glencore also experienced a positive day, with respective growth of 2.59% and 2.25%.

Elsewhere, Vodafone Group saw an uptick of 0.57% in the wake of its agreement to merge its telecoms operations with CK Hutchison's Three UK mobile network.

Games Workshop Group recorded gains of 5.86% after the company announced an expected increase in annual profit to at least £170m, up from £157m a year ago, attributing the boost to substantial increases in revenue and licensing income.

Luxury carmaker Aston Martin Lagonda soared 7.1% following an upgrade from 'underperform' to 'hold' by Jefferies, which also increased the price target from 160p to 300p.

The investment bank highlighted that Aston Martin had broken its cycle of discounted rights issues and was now positioned strongly for mergers and acquisitions.

On the downside, recruiting firms PageGroup and Hays both suffered significant drops of 6.15% and 6.33% respectively, following a warning from Robert Walters that its own full-year profit was expected to be 'significantly' lower than current market expectations.

Materials manufacturer Victrex tumbled 4.36% after a cautionary announcement that annual profits were projected to decline sharply due to falling group volumes and industrial challenges.

Entain, the owner of Ladbrokes, fell 8.7% after the firm's decision to raise around £600m in a discounted placing to facilitate the acquisition of Polish sports betting operator STS Holdings.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,602.74 0.10% FTSE 250 (MCX) 19,175.50 -0.07% techMARK (TASX) 4,559.71 -0.47%

FTSE 100 - Risers

Smith & Nephew (SN.) 1,249.00p 5.05% Anglo American (AAL) 2,582.50p 4.01% Antofagasta (ANTO) 1,560.00p 3.48% CRH (CDI) (CRH) 4,044.00p 3.16% Rio Tinto (RIO) 5,338.00p 2.59% Glencore (GLEN) 470.35p 2.25% Admiral Group (ADM) 2,251.00p 1.90% Prudential (PRU) 1,136.00p 1.84% Smurfit Kappa Group (CDI) (SKG) 2,932.00p 1.66% Ocado Group (OCDO) 409.10p 1.51%

FTSE 100 - Fallers

Entain (ENT) 1,206.50p -8.70% BT Group (BT.A) 136.80p -2.74% Hargreaves Lansdown (HL.) 844.40p -2.20% AstraZeneca (AZN) 11,510.00p -1.96% Flutter Entertainment (CDI) (FLTR) 15,505.00p -1.71% RS Group (RS1) 794.40p -1.61% Reckitt Benckiser Group (RKT) 5,906.00p -1.30% DCC (CDI) (DCC) 4,665.00p -1.08% Bunzl (BNZL) 3,106.00p -0.99% Halma (HLMA) 2,429.00p -0.94%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 298.60p 7.10% Games Workshop Group (GAW) 10,210.00p 5.86% TUI AG Reg Shs (DI) (TUI) 585.50p 3.54% Hammerson (HMSO) 26.42p 3.28% CLS Holdings (CLI) 137.00p 3.01% Liontrust Asset Management (LIO) 812.00p 2.59% Helios Towers (HTWS) 92.75p 2.49% Abrdn Private Equity Opportunities Trust (APEO) 452.50p 2.26% Senior (SNR) 172.40p 2.25% Carnival (CCL) 1,088.00p 2.21%

FTSE 250 - Fallers

Hays (HAS) 102.10p -6.33% Pagegroup (PAGE) 415.00p -6.15% SThree (STEM) 372.50p -5.70% Victrex plc (VCT) 1,470.00p -4.36% Marshalls (MSLH) 274.60p -3.51% Bridgepoint Group (Reg S) (BPT) 217.40p -3.38% Auction Technology Group (ATG) 756.00p -2.70% Vanquis Banking Group 20 (VANQ) 202.00p -2.65% Mitchells & Butlers (MAB) 215.00p -2.54% Molten Ventures (GROW) 300.00p -2.47%