(Alliance News) - Stock prices in London opened lower on Wednesday, before moving closer to flat, with sharp declines in tech stocks in both the US and Asia unsettling local markets.
Risk taking was curbed ahead of the release later Wednesday of the minutes of the most recent US Federal Reserve policy meeting, though shares in Paris and Frankfurt managed to notch minor gains.
The FTSE 100 index was down 5.40 points, or 0.1%, at 7,499.75 early Wednesday. London's flagship index advanced more than 120 points on Tuesday, in a positive start to the new year.
The mid-cap FTSE 250 index was down 16.01 points, or 0.1%, at 23,880.64. The AIM All-Share index was down 1.00 points, or 0.1%, at 1,211.85.
The Cboe UK 100 index was flat at 743.97. The Cboe 250 was down 0.1% at 21,225.01, and the Cboe Small Companies up 0.1% at 15,549.24.
The CAC 40 in Paris and DAX 40 in Frankfurt were both 0.1% higher.
"Market risk tone turned cautious overnight, with mixed equity market performances in the Asia-Pacific region. The main Japanese index ended slightly higher, but there were lower outcomes in China reflecting weaker tech stocks," analysts at Lloyds Bank commented.
In China, the Shanghai Composite ended down 1.0% on Wednesday, while the Hang Seng in Hong Kong lost 1.6%. The Nikkei 225 in Tokyo inched up 0.1%, while in Sydney, the S&P/ASX 200 lost 0.3%.
The latest Fed minutes are released at 1900 GMT. After the most recent Fed meeting, the central bank said it was on track to end its pandemic-era bond purchases by March.
In addition to the latest Fed minutes, eyes also will be on the ADP jobs report in the US, a precursor to Friday's nonfarm payrolls. The ADP numbers are reported at 1315 GMT.
The ADP report is expected to show that 400,000 jobs were added in the US in December, according to FXStreet-cited consensus. Lloyds expects the ADP figure to be higher, however.
Analysts at the bank commented: "There is some uncertainty about the possible impact of Omicron, but labour market conditions are expected to have remained strong. We have pencilled in a 500,000 rise in ADP private sector jobs which would add confidence to our central forecast for a bigger rise in official payrolls than in November which rose by just 210,000."
Elsewhere, the economic events calendar on Wednesday has services PMI readings from Germany, the eurozone and the US at 0855 GMT, 0900 GMT and 1445 GMT respectively.
The pound was quoted at USD1.3551 early Wednesday, up from USD1.3542 at the London equity market close on Tuesday. The euro stood at USD1.1306, up slightly from USD1.1303. Against the yen, the dollar was trading at JPY115.92, fading from JPY116.03.
Brent oil was quoted at USD79.72 a barrel early Wednesday, surrendering overnight gains and down from USD80.27. A slightly weaker dollar and Wednesday's more cautious mood meant gold has fared better so far. An ounce of the precious metal fetched USD1,817.31, up slightly from USD1,814.05.
"Oil prices rallied overnight, despite OPEC+ announcing its pre-planned 400,000 barrels per day increase in monthly production. The Omicron is 'omi-gone' trade continued to hold sway, with its brighter outlook for world growth and oil consumption lifting oil prices," Oanda analyst Jeffrey Halley commented.
In London, Ocado was the best performing blue-chip company, rising 4.0% after Berenberg raised the stock to Buy from Hold. What's more, the latest Kantar survey of the UK grocery market found that Ocado was the only major player to record an annual increase in the lead-up to Christmas.
The German bank also lifted Ferguson to Buy from Hold, the plumbing and heating products supplier was trading 1.0% higher.
Cineworld was the best performing mid-cap stock, rising 3.0% and adding to gains from Tuesday. The leisure sector was boosted by hopes the Omicron variant of Covid-19 will not lead to strict lockdown measures.
Elsewhere, low-cost gym operator Gym Group added 2.2% and ten-pin bowling firm Hollywood Bowl climbed 2.6%.
Among AIM listings, Verici Dx advanced 6.4% in early dealings. The kidney transplant test developer said it struck a deal with New York-listed biotechnology firm Illumina.
The collaboration will help "expedite" the launch of predictive artificial intelligence components of Verici Dx products. Verici Dx will have access to the Illumina Connected Analytics cloud-based data management and analysis software platform.
Verici Dx said the deal is an "important milestone".
"Having access to this state-of-the-art platform provides a substantial enhancement to Verici Dx's data management and interrogation capabilities and bolsters its ability to develop highly predictive future products. It will also enable Verici Dx to stay at the forefront of improving patient outcomes," the company added.
THG fell by another 5.2%, after plunging 10% on Tuesday. Shares are now worth 195.58 pence. The company, which trades as The Hut Group, priced its IPO at 500p back in September 2020.
The e-commerce platform provider had a promising start to life on the London Stock Exchange, but trades since then have been overshadowed by a wave of selling amid a lack of investor confidence. Its first post-float capital markets day fell flat back in October 2021 and the stock has continued its descent since then, getting little respite at the start of the new year.
By Eric Cunha; ericcunha@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
