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(Alliance News) - European markets were looking for direction at midday on Wednesday, as investors awaited the minutes of the most recent US Federal Reserve policy meeting, and as business survey results pointed to a recession.
The FTSE 100 index was up 21.03 points, 0.3%, at 7,473.87. The FTSE 250 was down 6.52 points at 19,415.85, and the AIM All-Share was down 1.32 points, 0.2%, at 836.62.
The Cboe UK 100 was up 0.3% at 747.52. The Cboe UK 250 was down 0.1% at 16,744.64, and the Cboe Small Companies was down 0.4% at 12,934.11.
Adding to mounting evidence of an impending recession, preliminary figures show the UK private sector continued to contract in November.
The S&P Global/CIPS flash composite purchasing managers' index edged up to 48.3 points in November from 48.2 in October. Staying below the 50.0-point no-change mark, it shows the UK's private sector remains in contraction.
However, the reading was better than expected, with FXStreet-cited consensus anticipating a deterioration to 47.5 points.
"A further steep fall in business activity in November adds to growing signs that the UK is in recession, with GDP likely to fall for a second consecutive quarter in the closing months of 2022," commented Chris Williamson, chief business economist at S&P Global Market Intelligence.
"If pandemic lockdown months are excluded, the PMI for the fourth quarter so far is signalling the steepest economic contraction since the height of the global financial crisis in the first quarter of 2009, consistent with the economy contracting at a quarterly rate of 0.4%."
In European equities on Wednesday, the CAC 40 in Paris was marginally higher, while the DAX 40 in Frankfurt was down 0.2%.
The eurozone's private sector economy also remained in reverse in November, although the pace of decline eased.
The flash composite PMI hit a two-month high of 47.8 in November, up from 47.3 in October. However, November's performance was still among the single currency area's worst over the past 10 years or so.
Still to come in the economic calendar there is a US PMI reading at 1445 GMT.
Later, at 1900 GMT, the Fed will publish the minutes of the most recent meeting of its policy-making Federal Open Market Committee. Investors will be looking for any clues about the US central bank's decision-making process for future interest rate hikes.
There will also be US initial jobless claims a day early because of the Thanksgiving Day holiday on Thursday. Stock trading will be closed on Thursday and have a half-day session on Friday.
FXStreet-cited consensus expects the number of US workers filing for first-time unemployment benefits to increase to 224,000 in the week that ended November 18 from 222,000 a week earlier.
The dollar was softer against the pound and the euro ahead of the FOMC minutes.
Sterling was quoted at USD1.1935 at midday in London on Wednesday, rising from USD1.1871 at the London equities close on Tuesday. The euro traded at USD1.0315 early Wednesday, higher than USD1.0275 late Tuesday. Against the yen, the dollar was quoted at JPY141.50, marginally higher than JPY141.35.
Stocks in New York were called mostly flat, with the DJIA up 0.1%, the S&P 500 index up 0.1%, and the Nasdaq Composite up 0.1%.
In London, the FTSE 100 index was still being supported by mining stocks, with Glencore up 3.1%, Antofagasta up 0.8%, and Anglo American 1.0% higher. This follows a swathe of price target upgrades by brokers in the morning.
However, oil stocks gave back their gains from earlier in the day, with BP down 0.2%, and Shell losing 0.4%.
Gold was quoted at USD1,737.17 an ounce on Wednesday, lower than USD1,741.10 on Tuesday, while Brent oil was trading at USD86.39, down from USD88.86.
Gambling stocks were performing well, with Flutter Entertainment up 3.7%, and Entain up 2.0%.
Entain said a subsidiary Entain CEE completed its EUR920 million acquisition of Croatian gaming and sportsbook operator SuperSport Group. The London-based gaming and sports-betting firm said SuperSport holds around 50% market share in the fully-regulated Croatian market.
"SuperSport expands our operations into the highly attractive and regulated Croatian market, as well as establishing Entain CEE as a strategic growth platform into the wider region," said CEO Jette Nygaard-Anderson.
In the FTSE 250, Pets at Home lost 4.6%, as costs ate into profit.
The pet supplies retailer said revenue grew to GBP727.2 million in the 28 weeks to October 13 from GBP677.6 million in the previous year. Pretax profit fell to GBP53.4 million from GBP65.7 million, due to higher costs of freight and energy, as well as digital investment.
Looking ahead, Pets at Home said there was no change to its financial 2023 guidance for underlying pretax profit of GBP131 million, with a range of GBP121 million to GBP136 million. This would be flat on GBP130.1 million in financial 2022, which was a 53-week year.
"All in all, it's not the best start for new CEO Lyssa McGowan who had a hard act to follow. Her predecessor Peter Pritchard helped to lay the foundations for the company's recent success. Investors will be hoping she can use her consumer-facing experience at pay-TV broadcaster Sky to better understand and serve its customer base during what is likely to be a tricky period," said AJ Bell's Russ Mould.
McGowan joined the firm back in June.
Fellow retailer Halfords's interim performance also was hit by rising costs.
The Worcestershire-based motor and cycling products seller said pretax profit fell 54% to GBP29.3 million in the six months to September 30, from GBP64.3 million a year prior. Revenue grew 10% to GBP765.7 million from GBP694.8 million.
Total operating costs before non-underlying items increased by 21% to GBP358.7 million from GBP295.7 million a year ago. Cost of sales increased by 11% to GBP372.6 million from GBP335.4 million.
Halfords expects underlying pretax profit to be at the lower end of the GBP65 million to GBP75 million range, falling by up to 28% from GBP89.8 million in financial year 2022.
Halfords was down 5.7%
"A slight weakening in the outlook for profit is never ideal, and markets have reacted badly, but weakness was bound to make its way through to performance given the scale of the macro challenges," considered Hargreaves Lansdown's Matt Britzman.
On AIM, Applied Graphene tumbled 29%.
The graphene product developer said it has begun a strategic review in light of its "funding position and...the unfavourable conditions in small-cap equity markets".
The options pursued may include raising funds from a specialist debt provider or strategic investor, selling its trade and assets, or selling shares in its main operating subsidiary.
It has also statutory redundancy consultations with its employees, to protect its financial position in case the review does not reach "a satisfactory conclusion".
By Elizabeth Winter; elizabethwinter@alliancenews.com
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