Last checked at 
(Alliance News) - European stocks stumbled into the afternoon in negative territory on Wednesday, with equities showing signs of discomfort ahead of a US inflation print later.
Should consumer price rises exceed expectations, it would make a second-successive 75 basis point rate hike from the Federal Reserve all but certain. This in turn could spell trouble for the euro, which is sitting just above parity, having fallen briefly below USD1 on Tuesday.
A better-than-expected UK gross domestic product reading failed to lift London equities. It did provide some joy for the beleaguered pound early Tuesday morning, though sterling has since given back all of that gain.
The FTSE 100 was down 52.40 points, or 0.7%, at 7,157.46. The FTSE 250 index was down 45.90 points, or 0.2%, at 18,809.06. The AIM All-Share index was down 2.42 points, or 0.3%, at 879.66.
The Cboe UK 100 index was down 0.8% at 713.45. The Cboe 250 was down 0.3% at 16,371.92, and the Cboe Small Companies was 1.0% lower at 13,098.67.
In mainland Europe, the CAC 40 stock index in Paris was down 0.8%, while the DAX 40 in Frankfurt was 0.9% lower.
The US consumer price index for June is released at 1330 BST. Inflation is expected to have ticked up to 8.8% from 8.6% in May.
The euro ebbed to USD1.0060 midday Wednesday London time from USD1.0068 at the European equities close on Tuesday. Against the yen, the dollar was quoted at JPY137.04, up from JPY136.66.
The euro had fallen to parity with the dollar on Tuesday. A dollar-boosting strong US inflation print could mean it returns below the USD1.000 mark.
"If the EUR/USD holds its own above parity after the US CPI is released, then it may stage a more meaningful comeback ahead of next Thursday's European Central Bank rate decision, when Christine Lagarde and her ECB colleagues will hike rates for the first time since 2011. But the risks remain skewed to the downside," City Index and FOREX.com analyst Fawad Razaqzada commented.
The pound quoted at USD1.1909 midday Wednesday in London, unchanged from USD1.1906 late Tuesday, after sterling's earlier momentum faded.
Cable hit an intraday high of USD1.1931 on Wednesday morning, on the back of a surprising strong reading of UK gross domestic product.
According to the Office for National Statistics, UK GDP grew 0.5% monthly in May, following a 0.2% decline in April.
The figure for May topped FXStreet-cited consensus, which had forecast the economy to register no monthly growth at all.
Consumer-facing sectors struggled, however, the ONS said.
A downbeat update from JD Wetherspoon also provided evidence of the difficulties the UK leisure sector faces, as consumer incomes are squeezed by inflation.
The pub chain lowered annual guidance, warning that a boom in pub sales following the easing of Covid curbs has not quite materialised, while labour costs are rising.
For the financial year ending July 31, Wetherspoon now expects a loss of GBP30 million on an IFRS 16 basis. It had previously guided a "break-even outcome for profits".
Wetherspoon shares were down 10% at midday.
Clarkson rose 12% as it expects to top expectations for 2022.
The shipping services firm expects underlying pretax profit of GBP42 million for the six months ended June 30, up 53% from GBP27.5 million a year earlier.
Clarkson added: "Performance has been strong across all divisions, with the Broking division, which has a market-leading position in nearly all the key shipping sectors, performing particularly well. While mindful of macroeconomic conditions, the board nevertheless remains confident in the outlook for the business and expects results for the year ending 31 December 2022 to be materially ahead of its previous expectations."
Elsewhere in London, ship repair, conversion and offshore construction firm Harland & Wolff rose 18% as it won its first contract in the defence sector.
It is delivering a vessel to the Lithuanian Navy after winning a contract from the UK's defence equipment sales authority, part of the Ministry of Defence.
The contract, worth GBP55 million, is part of the M55 Regeneration Project between the UK and Lithuania, started in June 2020. This aims to expand the military might of Lithuania.
It is Harland's maiden contract in the defence sector. The company is perhaps most recognisable for its eponymous shipyard in Belfast, Northern Ireland, which it agreed to rescue from closure back in 2019.
The Harland & Wolff shipyard was where the Titantic cruise liner was built.
Brent oil was trading at USD100.04 a barrel midday Wednesday - a hair above the USD100 level, below which it had slipped overnight - but down from USD100.37 late Tuesday. Oil prices on Tuesday succumbed to recession fears and worries related to demand due to Covid-19 lockdowns in China.
Gold stood at USD1,728.88 an ounce midday Wednesday, down from USD1,732.30.
Stocks in New York are called higher. The Dow Jones Industrial Average and S&P 500 are called up 0.2%. The Nasdaq Composite is called 0.3% higher.
Eyes will be on Twitter shares, which are up 1.7% in pre-market dealings.
Twitter sued Elon Musk for breaching the USD44 billion contract he signed to buy the tech firm, calling his exit strategy "a model of hypocrisy", court documents showed.
The suit filed in the US state of Delaware urges the court to order the billionaire to complete his deal to buy Twitter, arguing that no financial penalty could repair the damage he has caused.
"Musk's conduct simply confirms that he wants to escape the binding contract he freely signed, and to damage Twitter in the process," the lawsuit contended. "Twitter has suffered and will continue to suffer irreparable harm as a result of defendants' breaches."
By Eric Cunha; ericcunha@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
