Last checked at 
(Alliance News) - Stock prices in London opened higher on Wednesday, as investors expect to see the US central bank continue to slow the pace of its interest rate hikes.
The FTSE 100 index opened up 23.53 points, 0.3%, at 7,795.23. The FTSE 250 was up 129.18 points, 0.7%, at 19,982.63, and the AIM All-Share was up 3.71 points, 0.4%, at 871.53.
The Cboe UK 100 was up 0.3% at 779.52, the Cboe UK 250 up 0.7% at 17,443.15, and the Cboe Small Companies up 0.1% at 14,093.42.
The Federal Reserve will kick off the week's interest rate announcements on Wednesday at around 1900 GMT. The Bank of England and the European Central Bank will then have their turn on Thursday.
Markets are expecting a 25 basis point hike from the US central bank, slowing from a 50-point hike in December and 75-point hikes before that. In contrast, 50-point hikes are expected from the BoE and the ECB.
In the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average ending up 1.1%, the S&P 500 up 1.5% and the Nasdaq Composite up 1.7%.
"US markets have also got a new lease of life in the last two weeks with the best start to the year for the S&P 500 since 2019. The Nasdaq 100 has also enjoyed a stellar second half of the month gaining 10.6%, with yesterday’s strong finish set to translate into a positive European open," said CMC Markets Chief Market Analyst Michael Hewson.
"Judging by these January gains it would appear that US investors have made up their minds that the Fed is about to hit the pause button today, as it gets set to raise rates by an expected 25bps. This would push the Fed Funds rate to 4.5% to 4.75%, which is still well below what several policymakers have insisted consistently over the past few months is somewhere between 5% and 5.25%."
In the UK, house prices fell on a monthly basis for the fifth month in a row, according to figures from Nationwide on Wednesday.
In January, house prices fell by 0.6% on a monthly basis, worsening after a fall of 0.3% in December. On an annual basis, house prices rose 1.1% in January, slowing from a 2.8% increase in December.
The average UK house price stood at GBP258,297, down from GBP262,068 in December. House prices are now 3.2% below August's peak, Nationwide said.
"However, there are some encouraging signs that mortgage rates are normalising, but it is too early to tell whether activity in the housing market has started to recover. The fall in house purchase approvals in December reported by the Bank of England largely reflects the sharp decline in mortgage applications following the mini-Budget," said Nationwide Chief Economist Robert Gardner.
The Irish factory sector stabilised at the start of the year, edging into slight expansion as order book volumes stabilised, according to survey results on Wednesday.
The AIB manufacturing purchasing managers' index rose to 50.1 points from 48.7 in December.
Being above the 50-point neutral line, the score represented slight growth for the Irish manufacturing sector and was the highest in three months, breaking a two-month string of declines, according S&P Global, which conducts the monthly survey.
"Encouragingly, the Irish data showed the smallest fall in new orders since they first began to decline in June last year, though demand remains muted," commented AIB Chief Economist Oliver Mangan. "The pace of contraction in output also eased considerably, with just a small fall in the month."
The UK manufacturing PMI is due at 0930 GMT.
In European equities on Wednesday, both the CAC 40 in Paris and DAX 40 in Frankfurt were up 0.1%.
Sterling was quoted at USD1.2319 early Wednesday, lower than USD1.2375 at the London equities close on Tuesday.
The euro traded at USD1.0880 early Wednesday, higher than USD1.0861 late Tuesday. Against the yen, the dollar was quoted at JPY130.09, down versus JPY130.17.
In the FTSE 100, GSK gained 0.4%.
The drug maker posted revenue of GBP29.32 billion in 2022, up from GBP24.70 billion a year earlier. Pretax profit climbed in the year to GBP5.63 billion from GBP3.60 billion in 2021. The 2021 figures exclude the consumer healthcare arm.
The company declared a 13.75 pence dividend for the fourth quarter of 2022, bringing the annual dividend to 61.25p. In 2021, before the spin-off of consumer arm Haleon, GSK declared a 100p full-year dividend.
Looking ahead, GSK said it expected 2023 turnover to increase by between 6% and 8%, adjusted operating profit to rise by between 10% and 12%, and earnings per share to be up by between 12% and 15%. The expected dividend for 2023 is 56.5p per share.
Vodafone lost 3.2% in early trade, making it the FTSE 100's worst performer.
Vodafone said "we can do better", as it reported that growth slowed in the third-quarter.
On an organic basis, service revenue rose 1.8% year-on-year during the quarter ended December 31. It had risen 2.5% yearly in the second quarter.
On a reported basis, service revenue was 1.3% lower on-year at EUR9.52 billion from EUR9.65 billion. Total revenue amounted to EUR11.64 billion, down 0.4% from EUR11.68 billion a year earlier, but up 2.7% on an organic basis.
Vodafone backed yearly guidance, expected adjusted earnings before interest, tax, depreciation, amortisation and after leases between EUR15.0 billion and EUR15.2 billion. At best, that would be around the EUR15.21 billion achieved in financial 2022.
Vodafone also expects adjusted free cashflow of around EUR5.1 billion, which would be down around 6.2% from EUR5.44 billion the year prior.
"Although we're continuing to target our financial guidance for the year, the recent decline in revenue in Europe shows we can do better. We need to do more for our customers by delivering quality connectivity in an easy way. We've already taken action, including simplifying our structure to give local markets full autonomy and accountability to make the best commercial decisions for their customers," Chief Executive Margherita Della Valle said.
In the FTSE 250 index, FDM Group gained 1.5%, after the IT-focused professional services provider said it expects 2022 results in line with expectations.
FDM said it performed "well" in 2022, with each of its primary regions showing year-on-year growth in Consultants deployed, and a particularly strong performance in North America.
It noted that it expects to report revenue for the year of GBP330 million, up 23% year-on-year from GBP267 million. It also ended the year with 4,905 consultants placed with clients, up 22% annually from 4,033.
Looking ahead, CEO Rod Flavell said: "As we enter 2023 there remains a high degree of macro-economic and political uncertainty in some of the regions where we operate. However, across the group we continue to see healthy levels of client engagement and activity."
FDM will release its full annual results on March 15.
On AIM, Orcadian Energy lost 22% to 11.73 pence.
The company said it plans to raise GBP500,000 from a placing of 5.0 million shares. The placing shares are priced at 10p per share, which represents a discount of 33% to the closing price of 15p per share on January 31.
Orcadian said the proceeds will help fund licence fees and progress its field development plan.
Stocks in Asia rose on Wednesday, despite some disappointing data about China and Japan's manufacturing sectors.
In Tokyo, the Nikkei 225 index closed up 0.1%. The Shanghai Composite closed up 0.9%, and the Hang Seng index in Hong Kong was up 1.1%. The S&P/ASX 200 in Sydney closed up 0.3%.
China's manufacturing sector continued to decline for the sixth month in a row in January, according to new data.
The Caixin China manufacturing PMI rose to 49.2, from 49.0 in December. Coming in below the 50.0 no-change mark, it shows the sector remains in contraction, though the rate of deterioration eased marginally.
"Both manufacturing supply and demand continued to shrink last month, as Covid infections remained high. Output and total new orders shrank for the fifth and sixth straight months, respectively, but the contraction was milder than in December. Due to mounting recession risks overseas, external demand remained weak, with the reading for new export orders also contracting for the sixth consecutive month," said Wang Zhe, Caixin senior economist.
Japan's manufacturing sector also stayed in contraction territory at the beginning of 2022. The au Jibun Bank manufacturing PMI was unchanged from the previous month at 48.9 in January, suggesting an "overall stabilisation of manufacturing business conditions".
Gold was quoted at USD1,924.43 an ounce early Wednesday, lower than USD1,927.04 on Tuesday.
Brent oil was trading at USD85.88 a barrel early Wednesday, higher than USD85.27 late Tuesday. An OPEC meeting is scheduled for Wednesday.
In addition to the Fed's interest rate announcement, the economic calendar on Wednesday has a slew of PMI readings and an inflation reading for the eurozone at 1000 GMT.
By Sophie Rose, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
