(Alliance News) - Stock prices in London were lacking direction on Wednesday morning as investors await the UK government budget.
Chancellor of the Exchequer Rishi Sunak will deliver his budget statement starting at 1230 BST.
"With some spending plan details already released, the gaps will be filled when the budget is announced later today," noted Richard Hunter, head of Markets at Interactive Investor.
"Traditionally any impact from the measures announced tends to move sterling, although there could be some market impact in terms of specific sectors and perhaps general sentiment," added Hunter.
The large-cap FTSE 100 index was down 4.76 points, or 0.1%, at 7,272.86 early Wednesday. The mid-cap FTSE 250 index was up 23.95 points, or 0.1%, at 23,185.22. The AIM All-Share index was down 0.1% at 1,232.53.
The Cboe UK 100 index was down 0.1% at 720.91. The Cboe 250 was up 0.1% at 20,857.21, but the Cboe Small Companies was down 0.1% at 20,981.74.
In mainland Europe, the CAC 40 stock index in Paris was up marginally, 0.39 of a point, while the DAX 40 in Frankfurt was down 0.1%.
The pound was quoted at USD1.3766 early Wednesday in London, slightly lower than USD1.3774 at the London equities close Tuesday.
The euro was priced at USD1.1609, up from USD1.1587. Against the yen, the dollar was trading at JPY113.98, down from JPY114.25.
In the FTSE 100, Fresnillo was down 2.5%, the second-worst performer among the blue-chips on Wednesday. The move came despite Mexican gold and silver miner expressing confidence in achieving full-year guidance amid a strong performance so far in 2021.
The miner reported year-to-date attributable silver production of 40.2 million ounces in line with the prior year due to a higher ore grade at the San Julian disseminated ore body in Mexico and, to a lesser extent, the contribution of development ore from the Juanicipio mine, also in Mexico.
Year-to-date attributable gold production of 600,900 ounces was up 8.5% year-on-year, primarily due to the higher volume of ore processed at Herradura mine in Mexico following the lifting of Covid-19 restrictions, which had resulted in lower volumes of ore deposited last year.
Fresnillo said it remains on track to meet its 2021 full-year guidance of 53.5 million to 59.5 million ounces of silver and 675,000 to 725,000 ounces of gold.
Cambridge-based Aveva lost 0.8% despite reporting growth in the first half of its current financial year. The engineering, design and information management software provider said revenue grew by 9% in the six months to September 30 on a pro forma organic constant currency basis.
This increase drove significant margin leverage and growth in adjusted earnings before interest and tax, it said. For the first half of financial 2021, Aveva reported revenue of GBP332.6 million.
Among mid-caps, Network International Holdings was trading 0.9% lower. The payments solutions provider reported strong trading in its United Arab Emirates merchant business, resulting in 19% group revenue growth in the third quarter of 2021. However, when compared to the third quarter of 2019, revenue was still down 1%.
Network International said the UAE business traded strongly during the quarter and total direct processed volume fully recovered to 2019 levels.
"This is a reflection of our enhanced sales strategies, faster merchant onboarding and new capability launches; as well as improving underlying market dynamics. Consumer spending in the region has continued to improve, supported by the ongoing return of tourism and growing domestic consumer confidence," said Chief Executive Nandan Mer.
Elsewhere, Network International said its market entry to Saudi Arabia is on-track. The company said it has made progress in the building of its technology platform and a pipeline of customer commitments, and it expects to launch services in early 2022.
"Our efforts are laying the foundations for future growth and we remain confident in our outlook," added Mer.
Elsewhere, holiday retailer On the Beach Group was down 2.2% after reporting suppressed trading in the second half of its most recent financial year, which ended on September 30.
While demand for international leisure travel currently remains below pre-pandemic levels, the company highlighted that its specific initiatives, including its 'free Covid tests' promotion, combined with a further softening of government restrictions, have stimulated bookings in the final weeks of the financial year.
Going forward, On The Beach said it remains committed to investing for long-term market share gains in its current financial year, ahead of full market recovery.
In economic data, UK shop price deflation eased again in October, numbers on Wednesday showed, leaving consumers with the prospect of price rises during the festive period.
The UK retail sector has faced pressure from supply chain issues and material shortages. The latest British Retail Consortium-Nielsen IQ shop price index was further proof that some of these costs are being passed onto the consumer.
In October, shop prices declined 0.4% annually, easing from September's 0.5% fall.
"This is a slower rate of decline than the 12 and six-month average price decreases of 1.3% and 0.7%, respectively. This is the slowest rate of decline since January 2020," the BRC explained.
Meanwhile, food inflation accelerated to 0.5% in October from 0.1% in September. Fresh food prices alone were 0.3% higher, following 10 months in deflationary territory.
Stocks closed mostly lower in Asia on Wednesday. The Japanese Nikkei 225 index ended marginally lower, down 7.77 points. In China, the Shanghai Composite closed down 1.2%, while the Hang Seng index in Hong Kong was down 1.6% in late trade. The S&P/ASX 200 in Sydney closed up 0.1%.
Chinese authorities have told Evergrande founder Xu Jiayin, once the country's richest man, to use his personal wealth to alleviate the embattled company's debt crisis, according to media reports.
The liquidity crunch at one of China's biggest property developers has hammered investor sentiment and rattled the country's crucial real estate market, while fanning fears of a possible contagion of the wider economy.
Brent oil was quoted at USD85.52 a barrel Wednesday morning, down from USD86.37 late Tuesday. Gold stood at USD1,786.64 an ounce, marginally lower from USD1,788.24.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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