(Alliance News) - Stocks in London were mixed at midday on Thursday as the latest meeting minutes from the US Federal Reserve showed some officials contemplating a wind-down of its vast monetary easing measures.
The FTSE 100 index was up 9.56 points, or 0.1%, at 6,959.58. The mid-cap FTSE 250 index was down 7.72 points at 22,226.77. The AIM All-Share index was up 0.5% at 1,235.35.
The Cboe UK 100 index was flat at 692.04. The Cboe 250 was flat at 20,001.69. The Cboe Small Companies was down 0.1% at 14,780.60.
In mainland Europe, the CAC 40 in Paris was up 0.2%, while the DAX 30 in Frankfurt rose 0.4%.
US stock market futures were pointed lower as investors digested the latest meeting minutes from the Federal Reserve. Attention now turns to the latest jobless claims figures at 1330 BST.
The Dow Jones Industrial Average was called down 0.5%, the S&P 500 index down 0.4%, and the Nasdaq Composite down 0.5%.
Some US Federal Reserve officials believe it may soon be time to consider tapering asset purchases meant to aid the US economy's recovery from the virus pandemic, according to meeting minutes released Wednesday.
In the minutes, policy makers noted the economy "remained far from the [FOMC's] maximum-employment and price-stability goals" and, as a result, "it would likely be some time until the economy had made [the] substantial further progress "needed to begin tapering those purchases".
The minutes continued: "A number of participants suggested that if the economy continued to make rapid progress toward the committee's goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases." The "participants" were not named.
The Fed also said "the expected surge in demand as the economy reopens further, along with some transitory supply chain bottlenecks, would contribute to [personal consumption expenditure] price inflation temporarily running somewhat above 2%."
The dollar remained stronger following the Fed meeting minutes.
The pound was quoted at USD1.4131 at midday on Thursday, down from USD1.4155 at the London equities close Wednesday.
The euro was priced at USD1.2193, lower from USD1.2216. Against the yen, the dollar was trading at JPY109.06, up from JPY108.68.
"After steep losses in the previous session and a weak handover from Wall Street, European bourses are advancing on Thursday. Upbeat earnings and signs of the third Covid wave easing on the continent are bringing a more promising tone to the markets, although softer US futures are pulling European indices off their highs heading towards Wall Street's open," said Oanda Markets analyst Sophie Griffiths.
"Yesterday, the minutes from the April FOMC meeting revived taper jitters. The minutes revealed that Fed policymakers were ready to start considering the tapering of asset purchases over the coming months, largely confirming market fears. In the same breath, tapering comments were somewhat unexpected given the constant reiteration from the Fed of an accommodative stance for the foreseeable future. The move surprised the market, treasury yields bounded higher, the greenback rallied, and equities declined."
In the FTSE 100, National Grid was up 1.1% after the UK power line operator reported earnings growth in the 2021 financial year.
For the year ended March 31, revenue was GBP14.78 billion, up 1.7% year-on-year from GBP14.54 billion. Pretax profit was GBP2.08 billion, up 19% from GBP1.75 billion.
The London-based gas and electricity utility declared a final dividend of 32.16 pence per share, bringing the total dividend to 49.16p. That's up 1.2% from 48.57p last year, in line with the consumer price index with housing costs measure of inflation.
National Grid also signed a joint venture with Germany's RWE to develop offshore wind projects in northeast US. The two companies plan to bid in the upcoming New York Bight seabed lease auction, RWE said.
At the other end of the large-caps, Fresnillo and Tesco were still the worst performers, down 2.8% and 3.0% respectively, after the stocks went ex-dividend, meaning new buyers no longer qualify for the latest payout.
BT Group was down 1.5% after Berenberg downgraded the telecommunications firm to Hold from Buy. In addition, BT shares were hurt after the GBP31 billion mega-merger between Virgin Media and O2 was given the green light by UK regulators.
The Competition & Markets Authority waved through the deal following an in-depth investigation, concluding that concerns that customers would see price hikes from the telecoms deal were unfounded. Officials had provisionally cleared the deal last month and on Thursday confirmed the tie-up, which was first announced a year ago.
In the FTSE 250, Future remained the best performer, up 8.7% at 2,880 pence, after Deutsche Bank hike its price target to 2,900p from 2,190p and reiterated its Buy rating. The stock set a record high of 2,914.00p in early trade.
Future on Wednesday closed up 12% after the magazine publisher said it delivered a robust first-half performance extending its track record of growth in revenue and profit.
Euromoney Institutional Investor was up 6.0%. The business information publisher and events organiser reported a fall in interim profit as the pandemic hit physical events, but it still declared a dividend for the half year.
Revenue for the half-year to March 31 fell 17% to GBP155.5 million from GBP186.3 million year-on-year, while the London-based firm's pretax profit dropped 53% to GBP17.5 million.
The company declared an interim dividend of 5.7p per share, versus none a year ago, reflecting its "strong balance sheet, cash generative nature of the business and confidence in the future."
At the other end of the mid-caps, Trainline was by far the worst performer, down 22%. The UK government plans to create a new public railway operator called Great British Railways, to simplify a system that is "too complicated", Transport Secretary Grant Shapps said.
Great British Railways will own and manage rail infrastructure, issue contracts to private firms to run trains, set most fares and timetables, and sell tickets. It will absorb Network Rail in a bid to end what the UK Department for Transport branded a "blame-game system" between train and track operations when disruption occurs. GBR is not expected to be established until 2023.
Still, the move poses a direct threat to Trainline which operates an online platform for train tickets and railcards.
Shapps said during the 2018 timetable fiasco there was no "Fat Controller" in charge of the system, referencing the Thomas The Tank Engine stories.
He told Sky News: "It's just too complicated". The Cabinet minister, who described himself as a commuter who wants "a railway that works", added: "It's a simplification which I think people will broadly welcome."
Brent oil was quoted at USD65.31 a barrel Thursday at midday, down from USD66.06 late Wednesday. Gold was trading at USD1,868.15 an ounce, lower against USD1,883.00, as the dollar strengthened.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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