DC..L Share News (DC.)

LONDON (Alliance News) - Stocks in London were mostly lower on Wednesday at midday, with all eyes on the Federal Reserve monetary policy decision after the European market close.

"Markets are trading in the red this morning, but only by a small amount, as investors ready themselves for the first US rate increase in a year," said IG chief market analyst Chris Beauchamp.

The Fed decision is the main event in the economic calendar. The Federal Open Market Committee is set to announce the results of its two-day policy meeting at 1900 GMT, followed by a press conference with Chair Janet Yellen at 1930 GMT.

The FTSE 100 index was down 0.1%, or 8.70 points, at 6,959.87. The FTSE 250 index was down 0.4% at 17,644.05, but the AIM All-Share was up 0.2% at 822.62.

The BATS UK 100 index was down 0.3% at 11,769.00, and the BATS 250 was down 0.4% at 16,041.38. The BATS Small Companies was up 0.2% at 20,399.94.

Micro Focus International was the best performer among large-cap stocks, after the business software provider said profit and revenue grew in the first half ahead of its reverse takeover of the software arm of Hewlett Packard Enterprise.

Meanwhile, Dixons Carphone was the biggest blue-chip faller, as the mobile phone and electronics retailer reported growth in profit in the first half of its financial year but pointed to uncertainty ahead.

In mainland Europe, the CAC 40 index in Paris and the DAX 30 in Frankfurt were down 0.7% and 0.3%, respectively.

In New York, US stocks were called for a mixed open. The Dow Industrials was seen down 0.1%, the S&P 500 index flat and the Nasdaq Composite 0.1% higher.

IG's Beauchamp noted that, having seen equities rally throughout the past month, the "big question" is now what will keep the surge going into 2017.

"So much has been baked into the price, both in terms of Fed policy and also the impact of the new [US presidential] administration, that investors are going to struggle to find a new narrative to drive everything forward," the analyst says.

Before the Fed decision, there is a busy US economic calendar. US MBA mortgage applications are at 1200 GMT, US retail sales and producer price index are at 1330 GMT, US industrial production is at 1415 GMT, and EIA crude oil stocks are at 1530 GMT.

Already released, figures from the Office for National Statistics showed that the UK unemployment rate was 4.8% in three months to October, down from 5.2% a year ago, and unchanged from the three months to September.

Average earnings including bonuses increased by 2.5% in the three months to October, above expectations for a 2.3% rise and the 2.4% increase in the three months to September. Earnings excluding bonuses advanced 2.6%, above consensus for a 2.5% rise and the 2.4% rise seen in the three months to September.

The claimant count held steady at 2.3% in November as economists had expected. The number of people claiming unemployment-related benefits rose by 2,400 from October, which was smaller than the expected increase of 6,500.

The reaction in the pound was slightly negative, with the UK currency quoted at USD1.2638 at midday, compared to USD1.2691 at the London equities close on Tuesday.

Meanwhile, Eurostat data showed that eurozone industrial output slid 0.1% month-on-month in October, much slower than the 0.9% decline seen in September. However, economists expected a 0.2% rise. On a yearly basis, industrial production growth rose 0.6%, slowing from the 1.3% growth seen in September, below expectations for a 0.8% rise.

The euro was standing at USD1.0638 at midday, flat compared to USD1.0649 at the London close on Tuesday.

On the London Stock Exchange, shares in Micro Focus were up 6.3%. The firm agreed in September a USD8.80 billion reverse takeover deal for the software arm of HP Enterprise. On Wednesday, the company said the HP unit acquisition is on track to complete in the third quarter of 2017.

For the half-year to the end of October, Micro Focus reported pretax profit of USD113.2 million, up 15% from USD98.8 million a year before, as revenue grew 13% to USD684.7 million from USD604.5 million. Like-for-like revenue, in constant currencies and stripping out any acquisition effects, rose 1.2%. It declared an interim dividend of 29.73 US cents per share, 76% higher than the 16.94 cents paid a year before.

Dixons Carphone was down 6.6%. It said pretax profit in the 26 weeks ended October 29 grew to GBP104 million from GBP78 million the year before, as revenue rose to GBP4.87 billion from GBP4.39 billion and like-for-like sales increased by 4%. Dixons said its sterling results were boosted by the weakening of the pound against the euro and Norwegian krone following the UK's vote to leave the European Union.

The firm said that "while we have still not seen any effect on consumer demand as a consequence of Brexit, we have been planning for the possibility of more uncertain times ahead".

FTSE 250-listed CMC Markets is likely to consider moving a large part of its operations to Germany due to the UK Financial Conduct Authority's proposed crackdown on contract-for-difference products, Sky News reported on Tuesday.

However, such plans are at the "embryonic stage", with no decision to be taken until the end of the FCA's consultation on its proposed rules in 2017, said Sky News.

Sky News also reported that sources said Peter Hetherington, the chief executive of CMC's rival IG Group Holdings, was in Germany on Tuesday to talk to the German financial regulator about proposed contract-for-difference product reforms in Germany.

IG Group Holdings was up 4.4%, the best mid-cap performer, while CMC Markets was flat.

NMC Health was down 3.3%. The healthcare provider said it has entered into a deal to buy the Al Zahra Hospital in Sharjah from Gulf Medical Projects Co for around USD560.0 million. NMC said it will undertake a placing of around 10% of its issued share capital, or 18.6 million shares, to help finance the acquisition.

NMC's three largest shareholders, who together control 61.6% of NMC, have provided letters of intent that they plan to subscribe for up to USD170.0 million, or GBP134.0 million, of the placing, taking into account the fact the shares fell on the announcement. The placing is conditional on the participation of these shareholders, NMC said.

By Daniel Ruiz; danielruiz@alliancenews.com

Copyright 2016 Alliance News Limited. All Rights Reserved.