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(Alliance News) - Stocks in London ended Wednesday's session mixed with no further concrete progress on the US-China trade talks offering a boost to sentiment.
Hopes that the US and China were edging closer to formalising a mini-trade agreement helped lift stocks earlier in the week but any upward momentum appears to have ebbed.
The FTSE 100 index closed up 8.57 points, or 0.1%, at 7,396.65. The FTSE 250 lost 78.40 points, or 0.4%, to close at 20,216.59, and the AIM All-Share closed marginally lower at 890.85.
The Cboe UK 100 ended down 0.1% at 12,523.18, the Cboe UK 250 closed down 0.5% at 18,101.61, and the Cboe Small Companies ended down 0.1% at 11,247.97.
"The mood is broadly positive when it comes to the US-China trade relationship, which is why European equity markets are largely higher this afternoon," said CMC Markets analyst David Madden.
He continued: "There has been a lot of talk about Washington DC and Beijing edging towards signing phase one of the trade deal, but the Chinese government are now pressing the US to drop the tariffs they imposed in September. It is a big ask from Beijing, but markets have held up relatively well considering. Recently we have heard that progress has been made in relation to China's position on intellectual property rights as well as the yuan, so things are heading in the right direction."
The UK general election got underway on Wednesday, with the Conservative Party beginning their campaign fighting a series of controversies.
The pound was quoted at USD1.2866 at the London equities close Wednesday, broadly flat compared to USD1.2868 at the close on Tuesday.
UK Prime Minister Boris Johnson, who visited Buckingham Palace for an audience with the Queen before announcing the start of the election drive in Downing Street, faces a first official day of campaigning marred by his party having to defend controversial remarks.
Party Chair James Cleverly, said Commons Leader Jacob Rees-Mogg had "caused a huge amount of hurt and distress" with his comments on Grenfell Tower.
Cleverly also faced questions about a Tory campaign video that critics claim had been "doctored".
The film depicts Labour's Brexit spokesman Keir Starmer struggling to answer a question on TV about his party's position on leaving the EU, despite him answering it "perfectly adequately", according to the BBC's Nick Robinson.
Elsewhere, Welsh Secretary Alun Cairns resigned following the shadow secretary of state for Wales, Christina Rees, accusing Cairns of "brazenly lying" about his knowledge of an allegation that a Conservative candidate had sabotaged a rape trial.
Cairns claims he had been unaware of former staff member Ross England's role in the collapsed trial until after the story broke last week.
Focus will now turn to the Bank of England on Thursday.
With a recently launched general election in the UK only adding to existing Brexit uncertainty, no change in policy is expected from the central bank - with some analysts expecting the central bank to remain on hold "for the foreseeable future".
The BoE will announce its latest monetary policy decision, alongside the release of the Monetary Policy Committee meeting minutes, at midday in London on Thursday. At the same time, the re-branded Inflation Report, now the Monetary Policy Report, will be released. There will be a press conference with BoE Governor Mark Carney shortly after the rate decision, at 1230 GMT.
Since the bank's last meeting, in September, a new Brexit deal has been reached and a general election in the UK called in a bid to find a way through the three-and-a-half year ordeal of trying to leave the EU.
In London, BT was anchored to the bottom of the FTSE 100, losing 4.7%.
FTSE 100-listed Vodafone Group said its UK unit has agreed a five-year deal with Virgin Media to bring new services, including 5G, to more than three million mobile customers.
The new mobile virtual network operator agreement, which runs until 2026, will see Vodafone supply wholesale mobile network services, including both voice and data, to Virgin Mobile and Virgin Media Business.
Vodafone noted Virgin Media's current agreement with BT Enterprise, which has been in place since January 2017, will come to an end in late 2021, at which point Virgin Media's mobile offering will transition to Vodafone.
Vodafone shares ended up 0.3%.
In the FTSE 250, Ultra Electronics added 3.9%, the best performer, as the defence firm said it continues to trade in line with expectations and it has seen "good" order book development since its interim results.
"The ongoing strategic evolution is progressing and there remains good long term opportunities and growth potential for Ultra. Our major markets are growing, and our strong technology base is positioning us well on existing and potential future programs," Ultra said.
Softcat ended 2.9% higher after Jefferies upgraded the IT infrastructure provider to Buy. Jefferies believes the market is underestimating Softcat's earnings trajectory in both the near- and long-term.
The stockbroker said: "Our analysis suggests Softcat is well positioned to capture nearly GBP700 million of wallet share over the next 3 years. Leveraging its lean cost structure, as measured by our proprietary benchmarking analysis of 30+ UK value added resellers, Softcat is likely to convert revenue growth into 20%+ Ebit growth in the next 3 years and return about 20% of market cap in dividends in the next 5 years."
Hammerson was heading in the opposite direction in the midcaps, losing 2.5% after suffering a negative-across from an update put out by peer intu Properties.
Shopping centre owner intu Properties slumped 17% after warning like-for-like net rental income will fall in 2019.
intu said leasing activity slowed in the period to September 30, with customers more reluctant to dig into their coffers due to prevailing political and economic uncertainty.
intu footfall was up 1.2% year-on-year in the third quarter, and the company's rental income was lifted by 4% after 34 rent reviews during the period.
However, intu said: "We anticipate that like-for-like net rental income for 2019 will be down by around 9%, with more than half the reduction coming from the impact of CVAs such as Arcadia and Monsoon."
In a busy UK corporate calendar on Thursday, there is half year results for supermarket chain J Sainsbury, car marketplace Auto Trader and car parts retailer Halfords. There is a number of third quarter updates, including from general insurer RSA Insurance, gambling firm Flutter Entertainment, luxury car maker Aston Martin Lagonda, outsourcer G4S and housebuilder Persimmon.
In European equities on Wednesday, the CAC 40 in Paris ended up 0.3%, while the DAX 30 in Frankfurt ended 0.2% higher.
The euro stood at USD1.1072 at the European equities close Wednesday, up from USD1.1067 at the same time on Tuesday.
Business activity recovered modestly in the euro area in October, though the European bloc remains close to flatlining, figures from IHS Markit showed.
The composite purchasing managers' index improved to 50.6 in October from 50.1 in September, with the reading also above the flash estimate of 50.2. However, this rate of growth was amongst the weakest seen in the past six-and-a-half years.
Any reading over the no-change mark of 50 indicates expansion, while one below signals contraction.
France saw the strongest growth in October with a composite PMI of 52.6, marking a two-month high. Germany's was the worst at 48.9, though this also marked a two-month high for Europe's largest economy.
There was a divergence between manufacturing and service sectors in October, observed IHS Markit. Manufacturing firms recorded a ninth successive month of declining production, while service sector firms saw growth, albeit at a subdued rate.
The eurozone's services PMI improved to 52.2 in October from September's 51.6.
There was a marginal increase in new business volumes signalled in October, though export trade remained "especially weak".
Meanwhile, the manufacturing reading, released on Monday, rose only marginally to 45.9 compared to September's 45.7. The October figure was the second-worst in seven years.
Stocks in New York were mixed at the London equities close, with the Dow Jones and the S&P 500 index up marginally, while the Nasdaq Composite was 0.3% lower.
Madden commented: "The major US equity benchmarks are all a little lower as the bulls have taken a breather. The Dow Jones hit an all-time high yesterday, but today it has drifted lower. It was reported that China want the Trump administration to row back on the tariffs that were introduced in September. Donald Trump loves having the stock markets close to record highs but he can't be seen to be soft on China, so this issue might hold up the talks."
In commodities, Brent oil was quoted at USD62.17 a barrel at the London equities close Wednesday versus USD62.72 late Tuesday.
Gold was quoted at USD1,488.80 an ounce at the London equities close Wednesday, up from USD1,483.02 at the close on Tuesday.
Against the yen, the dollar was trading at JPY109.06, slightly lower compared to JPY109.14 late Tuesday.
Away from the Bank of England, the economic calendar has German industrial production at 0700 GMT, UK Halifax house prices at 0830 GMT, Irish CPI at 1100 GMT and in the US there is a 4-week average continuing and initial jobless claims reading at 1330 GMT.
By Paul McGowan; paulmcgowan@alliancenews.com
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