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(Alliance News) - Stocks in London were seeing tepid buying interest at midday on Wednesday ahead of the US Federal Reserve's latest interest-rate decision after the UK market close.
The FTSE 100 was up 7.86 points, or 0.1%, at 7,328.26 Wednesday midday. The FTSE 250 was up 26.73 points, or 0.1%, at 20,067.27, while the AIM All-Share was flat at 884.84.
The Cboe UK 100 index was up 0.1% at 12,428.65. The Cboe UK 250 was up 0.3% at 17,972.53, and the Cboe UK Small Companies up 0.1% at 10,945.37.
"As is typical for Fed days, especially one as anticipated as September's get together, the markets were rather shy coming out of the gate," commented Connor Campbell at Spreadex.
In mainland Europe, the CAC 40 in Paris and DAX 30 in Frankfurt were both up 0.1% in early afternoon trade.
Ahead of the Fed's rate decision, stocks in the US are called for a lower open. The Dow Jones and S&P 500 are both seen 0.1% lower, and the Nasdaq off 0.2%.
An interest rate decision from the US Federal Reserve is due at 1900 BST, followed by an press conference with Fed Chair Jerome Powell at 1930 BST.
"Wednesday's Fed statement is an interesting one. At the start of the month, the chance of a rate cut – according to the CME Group's FedWatch tool – was as close to certain as you could get. Now it sits at 56.5%, itself a sharp decline from the 63.5% likelihood seen just yesterday," said Campbell. "Improving relations between the US and China, a one-year high core inflation reading and surging oil prices have all helped cast doubt on the Fed's next move, making trading the meeting far trickier than, say, its July's counterpart."
"As for whether or not Jay Powell and his peers will give a hint about their future path, that's even less clear," Campbell added.
Elsewhere in the economic events calendar on Wednesday, UK inflation came in below expectations in August.
The UK consumer price index rose 1.7% on an annual basis in August, statistics from the Office for National Statistics showed on Wednesday, slowing from 2.1% in July. August's reading also was below consensus, according to FXStreet, of 1.9%.
"This is the lowest core reading since November 2016 and could be seen to raise the chances of a rate cut from the BoE. There's been a clear trend amongst central banks towards lower interest rates in recent months, but the BoE have yet to follow suit with some data points even suggesting that a tighter monetary policy could be warranted were it not for Brexit uncertainty," commented David Cheetham at XTB.
The Bank of England announces its latest monetary policy decision on Thursday.
Meanwhile, in Europe, no real progress can be made in reaching a Brexit deal until the UK submits formal written proposals, Jean-Claude Juncker has said.
The European Commission president said there remains a "palpable" risk of a no-deal Brexit despite "friendly, constructive and in part positive" talks with Boris Johnson earlier this week.
With the Brexit deadline set for October 31 and Johnson insisting he will not seek an extension despite a law aimed at forcing him to do so if there is not a deal in place, Juncker said the commission is prepared to work "day in, day out, morning until night" on efforts to reach an agreement.
The pound was quoted at USD1.2468 at midday, soft versus USD1.2478 late Tuesday.
In London, Kingfisher was the worst performer in the FTSE 100, down 2.3% after reporting a fall in interim profit.
In the six months to July 31, revenue fell by 1.4% year-on-year to GBP6.00 billion from GBP6.08 billion. Pretax profit fell by 13% to GBP245.0 million from GBP280.0 million.
On a like-for-like basis, sales fell by 1.8%, with growth at UK trade tools provider Screwfix and in Kingfisher's operations in Poland and Romania offset by declines in France and at British DIY retailer B&Q.
Looking ahead, Kingfisher said its outlook remains mixed and highlighted continued uncertainty in consumer demand in the UK.
"Veronique Laury is not going to be remembered in a positive light for her time as Kingfisher's leader. Her last set of results as chief executive follow a similar trend to earlier ones – sales are down, profit is down and there is no growth in the dividend," said Russ Mould, investment director at AJ Bell.
"Incoming boss Thierry Garnier may be a fresh face but he is still inheriting the same challenges that have depressed Kingfisher for so long," Mould noted.
FTSE 250-listed Games Workshop rose 2.6% after saying trading is in line with board expectations.
Sirius Minerals continued its slide, down 14% after closing Tuesday's session 53% lower on news it has failed to complete a crucial refinancing.
Pendragon shares lost 10% amid "challenging" market conditions for motor retailers in the first half of the year.
In the six months to June 30, revenue fell by 0.8% year-on-year to GBP2.46 billion from GBP2.48 billion. Pendragon made a pretax loss of GBP134.6 million, swung from a GBP27.3 million profit in the first half of 2018.
The firm also opted not to pay an interim dividend this year, having made a 0.8 pence per share payout a year prior.
Looking ahead, Pendragon is not anticipating an improvement in market conditions in the rest of the year but said it is "closely monitoring market conditions and customer behaviour", particularly in the month of September, which is a key trading period, as UK car number plates change.
Pendragon now expects its underlying pretax loss to be at the bottom of internal expectations, though it does expects a "meaningful recovery" in profitability during the second half of 2019. The company said it has engaged in various "self-help" measures to improve performance.
Non-Executive Chair Chris Chambers will leave the company the company on October 1, Pendragon said, after six years at the firm. Bill Berman, a non-executive director and former operating chief of American car retailer AutoNation, will become executive chair on an interim basis.
Berman will lead Pendragon's search for a permanent non-executive chair and a new chief executive. Mark Herbert, its former chief executive, departed in June by "mutual agreement".
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