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(Alliance News) - Gains for London stocks accelerated as Wednesday's session progressed, encouraged by some green shoots of hope for progress ahead of the latest round of trade talks between the US and China.
The FTSE 100 index was up 44.09 points, or 0.6%, at 7,187.24 Wednesday midday. The FTSE 250 was just 5.34 points higher at 19,206.24 and the AIM All-Share flat at 857.49.
The Cboe UK 100 index was up 0.4% at 12,190.79. The Cboe UK 250 was 0.1% lower at 17,117.58 and the Cboe UK Small Companies also down 0.1%, at 10,804.44.
In mainland Europe, the CAC 40 in Paris and DAX 30 in Frankfurt were up 0.6% and 0.9% respectively in early afternoon trade.
"It has been a modestly positive morning for European equities, but overall stock markets are still stuck in a violent see-saw between buyers and sellers as investors try to position themselves ahead of the US-China trade talks," said IG chief market analyst Chris Beauchamp.
"Hints of a Chinese willingness to accept a partial trade deal have bolstered European markets in morning trading, suggesting that there might be reason for optimism despite the chest-beating of the past few days," Beauchamp noted.
Relations between the US and China have been rocky in the lead-up to Thursday's talks.
The US said Tuesday it would curb visas for Chinese officials until Beijing ends its "repression" of Uighurs and other Muslims in the western region of Xinjiang, a day after imposing commercial restrictions.
China voiced anger at the move, denying any human rights abuses in Xinjiang and accusing the US of using "made-up pretexts for its interference".
The visa step came hours after China issued a similar protest over action by the US Commerce Department. It blacklisted 28 Chinese entities including video surveillance firm Hikvision and artificial intelligence companies Megvii Technology and SenseTime over their involvement in Xinjiang.
US stocks are pointed towards a positive start on Wednesday, with the Dow Jones seen up 0.7%, the S&P 500 up 0.8%, and the Nasdaq Composite up 0.9%.
In economic events on Wednesday, US Federal Reserve Chair Jerome Powell will be speaking at 1600 BST on Wednesday ahead of the release of Federal Open Market Committee minutes at 1900 BST.
"Investors may look to tonight's publication of minutes from the US Federal Reserve's latest interest rate meeting for signs the central bank is prepared to do what it takes to keep the world's largest economy on track," said AJ Bell investment director Russ Mould.
On Tuesday, Powell said the American economy should continue its expansion, with strong jobs markets but with price pressures in check and inflation approaching the central bank's target.
In addition, he said the Fed will soon announce more permanent measures to boost banks' cash reserves after a recent shortage sent short-term interest rates skyrocketing. This will include plans to buy more short-term Treasurys to boost reserve levels, he said.
In the UK, ministers are preparing to summon MPs for a special Saturday sitting of Parliament following next week's crucial EU summit.
Government sources said MPs were expected to be called back to Westminster on October 19 regardless of whether UK Prime Minister Boris Johnson has been able to secure agreement on a Brexit deal.
The summit in Brussels on October 17 and 18 is the last scheduled meeting of EU leaders before Britain is supposed to leave on October 31. If the PM is able to get an agreement, it will be an opportunity for MPs - who will have to give their approval - to debate it. Otherwise, Johnson is expected to set out how he plans to take Britain out of the EU at the end of the month regardless.
The prospects of an agreement were looking slim after Downing Street accused the EU on Tuesday of making it "essentially impossible" for the UK to leave with a deal. Johnson is expected to meet Irish Premier Leo Varadkar on Thursday in a last-ditch effort to break the deadlock over the Northern Ireland backstop.
"The pound is holding up relatively well despite the rise in the political temperature in the past day or so between London and the rest of the EU. Markets appear to be making the calculation, rightly or wrongly that even if no deal is agreed by the end of the week, or the month, that an extension will happen, and a no-deal Brexit avoided, at least in the short term," commented Michael Hewson at CMC Markets.
In London, Just Eat was among the gainers, up 1.7%, after merger partner Takeaway.com reported a solid third-quarter performance.
For the three months ended September, the Dutch firm's total orders almost doubled to 41.6 million from 22.3 million the year prior. Orders growth was driven by its core German market, with orders there more than doubling to 19.2 million from 8.2 million the year before.
In August, Takeaway.com and Just Eat proposed an all-share combination to create one of the largest food delivery companies in the world with a market capitalisation around EUR10 billion and processing orders worth over EUR7 billion per year.
On Wednesday, Takeaway.com said it continues to expect the transaction to close around the end of 2019, subject to shareholder and other approvals.
In the FTSE 250, GVC Holdings was up 2.9% after the gambling firm raised its annual guidance.
The Ladbrokes brand owner raised its earnings before interest, taxation, depreciation and amortisation guidance to a range of GBP670 million and GBP680 million. GVC previously guided for full-year Ebitda in the range of GBP650 million from GBP670 million.
Total net gaming revenue was down 1.0% year-on-year on a like-for-like basis during the quarter ended September 30, though in the year-to-date, it improved 3.0%.
easyJet was up 1.5%, rebounding after a 7.6% fall on Tuesday. easyJet on Tuesday had reported a "solid" performance in the fourth quarter, helped by increased demand following "disruption" seen at rivals British Airways and Ryanair Holdings.
At the bottom of the index was promotional products maker 4imprint, down 5.6% after HSBC initiated the stock with a Hold rating.
Aston Martin Lagonda Global Holdings was 1.1% lower after Deutsche Bank resumed the luxury car maker with a Hold rating.
"At the current market price, we believe the shares reflect Aston Martin's risk/reward profile appropriately and we rate the stock Hold," the German bank said.
By Lucy Heming; lucyheming@alliancenews.com
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