(Alliance News) - The FTSE 100's gains were trimmed as Wednesday's session progressed, with anticipation growing ahead of the latest US interest rate decision, and miners weighing on the blue-chip index following disappointing Chinese industrial production figures.
The FTSE 100 index was up 9.24 points, or 0.1%, at 7,181.72 midday Wednesday. The mid-cap FTSE 250 index was down 80.04 points, or 0.4%, at 22,551.68. The AIM All-Share index was down 0.2% at 1,242.27.
The Cboe UK 100 index was up 0.2% at 715.84. The Cboe 250 was down 0.4% at 20,298.38, and the Cboe Small Companies down 0.2% at 15,280.46.
In mainland Europe, the CAC 40 in Paris was up 0.2%, while the DAX 30 in Frankfurt was up 0.1% on Wednesday.
The key event in Wednesday's calendar is the US Federal Reserve's monetary policy decision at 1900 BST. This will be followed by a press conference with Fed Chair Jerome Powell at 1930 BST.
"It's Fed day, and European stocks are looking nervous. Bourses are trading mixed ahead of the Federal Reserve monetary policy announcement later today as investors question whether the Fed will start to indicate a move towards normalising policy," said Sophie Griffiths, market analyst at Oanda.
The latest monetary policy decision comes as US consumer prices recorded their strongest growth in nearly 13 years. Data last week showed US inflation accelerated further in May, hitting an annual rate of 5.0% in the strongest 12-month increase since 2008.
"The Fed is not expected to adjust monetary policy today," said Griffiths. "However, there are growing expectations that Jerome Powell and company could start to gradually introduce the idea of reining in monetary policy."
Wall Street is tipped for a cautious start ahead of the Fed announcement. The Dow Jones is called down 0.1%. The S&P 500 is seen flat. The Nasdaq Composite is set for a modest 0.1% gain.
The dollar was mixed heading into the rate decision.
The euro traded at USD1.2117 on Wednesday, lower than USD1.2127 late Tuesday in London. Against the yen, however, the greenback fell to JPY109.93 versus JPY110.08.
Sterling was changing hands at USD1.4119 midday Wednesday, rising from USD1.4088 at the London equities close on Tuesday, after UK inflation topped the Bank of England's 2% target for the first time in nearly two years.
The Office for National Statistics said the UK consumer price index jumped 2.1% on an annual basis in May, accelerating from 1.5% growth in April.
May's annual inflation print was the highest reading since the same 2.1% growth rate was registered in July 2019. Consumer price growth has remained below 2% ever since then.
"Headline CPI is likely to be at 2.5%, or perhaps slightly above, by year-end. But for the Bank of England, the fact that inflation is likely to ease through 2022 suggests less imminent pressure to move towards tightening," commented ING.
The Bank of England's meets next week.
The pound's strength on Wednesday was capping the FTSE 100's gains at midday, given its large contingent of dollar-earners, while miners also tugged on the blue-chip index.
Glencore fell 2.8%, Anglo American by 2.2% and Antofagasta by 1.2% after figures showed China's industrial production growth slowed in May.
Industrial output rose 8.8% annually in May, a hair below forecasts of 9% growth. Industrial production was 9.8% higher yearly in April.
The miss "highlights the pressure put on economic growth by rising input prices", said Joshua Mahony, senior market analyst at IG. "With the Chinese announcing that they will start to periodically release reserves of aluminium, copper, and zinc, we are seeing that the country clearly has intentions to do all it can to quell the rise in commodity prices."
Oil prices were higher on Wednesday with North Sea benchmark Brent trading at USD74.11 a barrel, higher than USD73.70 late Tuesday.
Gold was quoted at USD1,858.05 an ounce midday Wednesday, soft compared to USD1,860.80 on Tuesday.
Back on the London Stock Exchange, Helios Towers shares fell 3.8% as the telecommunications infrastructure company focused on Africa set out to raise USD160 million via a placing, retail offer and convertible bond offering.
Helios will issue 46.8 million placing shares and 1.3 million retail offer shares to raise around USD110 million. Shares will go for 163 pence each in both the placing and retail offer, giving buyers a 5.3% discount on Helios's closing share price of 172.2 pence per share on Tuesday. It is looking to raise around USD50 million from a convertible bond issue as well.
ScS shares jumped 12% as the furniture and flooring retailer raised its annual outlook and resumed dividends on the back of a strong sales performance.
In the 46 weeks ended June 12, like-for-like order intake was 11% higher annually, though down 9.5% from financial 2019. Trading was "very encouraging" following the reopening of stores from lockdown, it said.
For the current financial year, ending July 31, ScS expects its performance to be "ahead of market expectations", and its outlook for the next financial year is "substantially" higher than market forecasts.
ScS was outperforming online furniture retailing peer Made.com, which slipped on its London debut.
Made.com was trading at 182.63 pence at midday, down 8.7% from its 200p IPO price. The 200p IPO price gave the company a GBP775.3 million market capitalisation on admission.
"A listing in London, where the business was founded, will enable us to accelerate our growth as we lead the development of the online furniture and homewares market as it moves online, both in the UK and internationally," said Chief Executive Philippe Chainieux.
London-based Made sells its sofas, armchairs and other furniture in the UK, Germany, Switzerland, Austria, France, Belgium, Spain and the Netherlands through its eponymous website.
By Lucy Heming; lucyheming@alliancenews.com
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