LONDON (Alliance News) - Stocks in London closed up Wednesday as tit-for-tat tariffs in the ongoing US-China trade spat were softer than expected with banks and miners pushing the FTSE 100 to end the day higher.CMC Markets UK Market Analyst David Madden said: "US and China tariff attacks yesterday weren't as harsh as some dealers were expecting. Now that Washington DC and Beijing have stepped up their tactics, there is a feeling in the markets that a weight has been lifted as we have gotten over a hump. The trade dispute may have taken a turn for the worse, but traders aren't expecting another escalation in the near-term." The FTSE 100 index closed up 0.4%, or 30.89 points at 7,331.12. The FTSE 250 ended 0.2% higher, or 42.18 points, at 20,500.45, and the AIM All-Share closed marginally higher, up 0.45 points, at 1,092.50.The Cboe UK 100 ended up 0.5% at 12,432.72, the Cboe 250 closed up 0.2% at 18,635.92, and the Cboe Small Companies ended 0.1% higher at 12,217.23.UK inflation rose unexpectedly in August, squeezing consumers' disposable income even as wages showed signs of recovery.Consumer price inflation increased to 2.7% in August from 2.5% in July, the Office for National Statistics reported Wednesday.A similar higher rate was last seen in February. Economists had forecast inflation to ease to 2.4%.Month-on-month, consumer prices climbed 0.7%, faster than the expected 0.5%.The unexpected rise in CPI inflation came as a bit of a nasty surprise, but it does not alter the assessment that inflation will be back at the 2% target by this time next year, Ruth Gregory, an economist at Capital Economics, said.The economist added that the Brexit uncertainty will prevent the Bank of England from lifting interest rates again until May 2019."To highlight the surprise of this report, not a single economist out of 36 surveyed by Bloomberg predicted it would come in this high," said James Knightley, chief international economist at ING.He added: "If today's inflation rise is due to currency, the momentum should fade. Instead, we think it is largely noise with inflation set to return to the 2% target early next year...we continue to think the BoE will wait until after the UK formally leaves the EU in March next year before seriously considering raising interest rates again. This suggests May is the most likely point for the next 25bp move."Another report from ONS showed that output price inflation slowed to 2.9% in August, in line with forecast, from 3.1% a month ago. The rate has remained positive since July 2016.The pound was quoted at USD1.3162 at the London equities close, marginally higher compared to USD1.3145 at the same time on Tuesday. On the London Stock Exchange, blue chip bankers also closed the day higher, reaping the benefits of the higher CPI figures as the four giants closed up."The kneejerk reaction to revived CPI volatility is to link it with rate expectations, despite ambivalent implications for growth and other consumer-led activity, that could eventually crimp the prospects of RBS, Barclays and Lloyds, which are firm on Wednesday," said CityIndex market analyst Ken Odeluga.
HSBC closed up 1.8%,
RBS up 2.5%,
Barclays up 2.1% and
Lloyds finished 1.0% higher.HSBC also has hiked its annual lending fund for UK small businesses to a record GBP12 billion and has ring-fenced GBP1 billion for the first time to help boost overseas trade as Brexit approaches.The banking giant said the annual lending commitment was its highest to date since launch five years ago and GBP2 billion more than in 2017.Miners however, finished at the top of the FTSE 100 thanks to softer than expected tariffs in the ongoing US China trade war.
Antofagasta finished at the top of the FTSE 100, up 5.9%.
Anglo American closed up 5.1%.
Fresnillo finished up 3.7%.
Glencore closed up 3.5% and
BHP Billiton closed up 3.4%."Yesterday's lesser than expected tariffs appears to have had a noticeable knock-on effect for base metals today, with the rise across commodities such as copper, nickel and zinc helping drive substantial gains across the FTSE 100 miners. The widespread selloff in metals as a result of the recent trade spat has helped provide what looks like an attractive long term buying opportunity, thus raising the attractiveness of the mining sector," said Joshua Mahony, market analyst at IG. Insurer
Prudential gained 3.7% after the UK Financial Conduct Authority decided against taking further action over the treatment of customers by life insurance businesses.In 2016, the FCA launched the investigation into six life insurers:
Old Mutual, Police Mutual, Scottish Widows, Prudential,
Countrywide, and Abbey Life. The FCA looked into whether the firms adequately communicated about their policies to closed-book customers, especially regarding the ease with which customers could change policies, amongst other things.The investigation into Police Mutual and Scottish Widows was ended earlier this year. The regulator said the other four investigations are now also closed, with no further action needed.
Kingfisher finished the worst performer in the FTSE 100, down 6.3% as interim profit slumped.The owner of DIY retailer B&Q said difficult trading in France sent its half-year profit down by almost a third, despite "strong" performances in the UK and Polish markets.For the six months to July 31, the home improvement and garden centres retailer posted pretax profit down 30% to GBP281 million from GBP402 million a year ago. On an adjusted basis, pretax profit also fell, by 18% to GBP323 million. Meanwhile, revenue increased 1.2% to GBP6.08 billion compared to GBP6.01 billion a year prior.
Royal Mail closed down 2.4% after Non-Executive Chairman Peter Long stood down from his role after becoming executive chairman of Countrywide.Long will be replaced by Les Owen. Owen joined Royal Mail in 2010. He chaired the Pensions Committee during the key review of Royal Mail's pension arrangements, the company noted.
Unilever closed down 2.2% after The Times reported M&G Investments became the latest Unilever shareholder to oppose the consumer goods company's proposal to move its headquarters to the Netherlands.According to the newspaper, M&G - Unilever's thirteenth largest shareholder - came out against Unilever's plans to scrap its dual UK-Dutch structure, joining other investors who are against it such as Aviva Investors, Lindsell Train and Columbia Threadneedle. Together, the four shareholders own more than 5% of Unilever.In the FTSE 250, industrial software firm
AVEVA gained 0.9% after setting out its medium-target targets as it holds a capital markets day.AVEVA said it continued to deliver constant currency revenue growth in the financial year-to-date and aims to deliver medium-term revenue growth on a constant currency basis at least at a mid-single digit rate.This revenue growth target reflects AVEVA's expectations to grow its underlying software business, driven by a combination of sales execution, revenue synergies and additional value levers, including pricing. AVEVA also said it aims to grow the proportion of recurring revenue to total revenue to over 60% from 52% in the medium-term.
SSP, which operates food and retail concessions in airports and motorway service stations, rose 1.0% as UBS raised the group to Neutral from Sell.Defence firm
Babcock International advanced 3.4% as it held its annual guidance and said current trading remains in line with expectations.The company, which designs and builds naval patrol vessels and aircraft carriers, said 87% of revenue for its current financial year is now in place and around 57% for the year after.For the year ending March 31, 2019, the company expects low single-digit underlying organic revenue growth at constant currency with stable margins. Underlying earnings guidance remains unchanged and revenue and cash flow performance is predicted to be second half weighted.In Paris the CAC 40 ended 0.6% higher, while the DAX 30 in Frankfurt ended up 0.5%. Britain's proposals on future relations with the EU and the Irish border issue will need to be "reworked," European Council President Donald Tusk said ahead of a key meeting of EU leaders in the Austrian city of Salzburg.Tusk welcomed the "positive evolution" in Britain's stance on some issues, notably security and foreign policy cooperation after Brexit."On other issues, such as the Irish question or the framework for economic co-operation, the UK's proposals will need to be reworked and further negotiated," he added.Brexit negotiations are entering a "decisive phase," Tusk said in Salzburg. "Today there is perhaps more hope. But there is surely less and less time."Eurostat reported Eurozone construction output grew at a slower pace in July reflecting contraction in civil engineering. Construction output rose 0.3% month-on-month, slower than the 0.7% increase in June. This was the fourth consecutive rise in production.The euro stood at USD1.1685 at the European equities close, against USD1.1685 the prior day.Stocks in New York were mixed at the London equities close. The DJIA was up 0.8%, the S&P 500 index up 0.2% and the Nasdaq Composite down 0.2%.A report released by the US Commerce Department showed a sharp increase in new residential construction in the US in the month of August, although the report also showed a steep drop in building permits during the month.The Commerce Department said housing starts spiked by 9.2% to an annual rate of 1.282 million in August from the revised July estimate of 1.174 million.Economists had expected housing starts to jump by 5.7% to a rate of 1.235 million from the 1.168 million originally reported for the previous month.Brent oil was quoted at USD79.27 a barrel at the equities close from USD78.69 at the same time the prior day. Gold was quoted at USD1203.30 an ounce at the London equities close against USD1,198.69 on Tuesday.The economic on Thursday has UK August retail sales at 0930 BST, Eurozone consumer confidence at 1500 BST and US initial jobless claims at 1330 BST. The UK corporate calendar has first quarter results from IG Group and half year results from fashion brand French Connection, construction firm Kier Group and oil and gas company SOCO International.
Last checked at 
