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(Alliance News) - Stock prices in London improved in midday trade on Wednesday as power suppliers were boosted by news of a potential multi-billion package to freeze energy costs, while European market benchmarks benefited slightly from faster-than-expected second quarter growth.
"Action on energy bills continues to be widely trailed as new prime minister, Liz Truss, prepares for an official announcement on her policy. Given the big package that is expected, anything short could spark renewed selling in consumer-facing stocks," said AJ Bell investment director Russ Mould.
The FTSE 100 index was down 47.08 points, or 0.6%, at 7,253.36 midday Wednesday. The mid-cap FTSE 250 index was down 63.88 points, or 0.3%, at 18,757.20. The AIM All-Share index was up 0.60 points, or 0.1%, at 865.98.
The Cboe UK 100 index was down 0.6% at 724.79. The Cboe 250 was down 0.3% at 16,167.92, and the Cboe Small Companies was down 0.6% at 12,724.24.
However, sterling wasn't benefiting from the political developments. It was quoted at USD1.1469 midday Wednesday, down from USD1.1531 at the London equities close on Tuesday.
In mainland Europe, the CAC 40 in Paris was down 0.3% and the DAX 40 in Frankfurt was also 0.4% lower.
In the three months to the end of June, the eurozone recorded sequential growth of 0.8% from the first quarter, a second estimate showed on Wednesday, revised up from last month's flash reading of 0.6%. This was also ahead of the first quarter's growth of 0.7%.
Annually, the eurozone notched growth of 4.1%, above the prior estimate of 3.9%. However, this marked a slowdown from first-quarter growth of 5.4%.
The euro traded at USD0.9902 midday Wednesday, marginally lower than USD0.9910 late Tuesday. Against the yen, the dollar was quoted at JPY144.49, up from JPY142.90.
The European Central Bank will announce its interest rate decision on Thursday at 1315 BST. The bank is set to carry out just its second interest rate hike in over 10 years, with another rise of half a percentage point expected from the September meeting.
In the FTSE 100, Centrica rose 1.6% and SSE added 4.7%, as the Truss worked to finalise a multi-billion package to freeze energy bills.
A report in The Times stated the energy bill freeze will be around the GBP2,500 mark – more than GBP500 above the current price cap but GBP1,000 less than the limit due to be imposed in October.
The package will be funded through borrowing and general taxation. The new chancellor, Kwasi Kwarteng, has summoned the bosses of major banks to discuss the fresh economic strategy.
Miners Rio Tinto, Glencore, and Anglo American remained in the red at midday. The stocks were down 1.7%, 1.8% and 1.6%, respectively on news that China - a major buyer of metals - saw a slowdown in import and export growth during August.
In the FTSE 250 index, NCC rose 15%. On Tuesday, the cybersecurity firm reported a double-digit rise in annual revenue and a surge in profit as a result of higher demand throughout the year.
In the financial year that ended on May 31, pretax profit doubled to GBP31.0 million from GBP14.8 million the year before, as revenue rose by 16% to GBP314.8 million from GBP270.5 million.
Among small-caps, Halfords soared 15% after the motor and cycling products retailer reported revenue in the 20 weeks to August 19 was up 9.2% year-on-year, but like-for-like sales were down 1.9%. Halfords pinned the revenue slowdown on a surge in sales when the UK emerged from its final Covid lockdown last year.
Halfords said second half profit will top its first half profit.
Avon Protection rocketed 33% after announcing an order worth over USD15 million from the US Department of Defense and reporting improved trading in the second half of its financial year.
Trading in the second half of its current financial year, which ends September 30, has improved as expected, Avon said. The company cited a "modest improvement" in mix in its respiratory portfolio and the commencement of body armour deliveries for the stronger performance.
James Fisher fell 5.9%, after posting a fall in interim profit as administrative expenses and cost of sales outpaced revenue growth.
Pretax profit in the six months to June 30 narrowed to GBP3.2 million from GBP8.1 million a year prior, while revenue increased 2.0% to GBP238.4 million from GBP233.7 million.
However, this was offset by administrative expenses widening by 9.6% to GBP49.2 million from GBP44.9 million. Cost of sales also outpaced revenue growth, increasing by 2.9% to GBP182.7 million from GBP177.6 million.
Looking ahead to the open on Wall Street, the Dow Jones Industrial Average was seen opening 0.1% higher, the S&P 500 was seen 0.1% higher, while the Nasdaq Composite was called up 0.2%.
Apple is expected to unveil the next generation of iPhone with an 'always on' display widely tipped as a major upgrade.
The announcement is expected to feature an iPhone 14 Pro and a cheaper iPhone 14, each available in normal and large sizes.
However, reports suggest that the cheaper model might contain the same series of processors – Apple's A15 Bionic chips – that are already used in the iPhone 13, meaning that there is unlikely to be a noticeable performance difference.
Apple was up 0.4% in pre-market trade in New York.
Brent oil was trading at USD93.52 a barrel, higher from USD93.17 late Tuesday.
Gold was quoted at USD1,702.95 an ounce midday Wednesday, flat on USD1,702.85 on late Tuesday.
Still to come on Wednesday, there is international trade data from the US at 1330 BST.
By Heather Rydings; heatherrydings@alliancenews.com
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