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(Alliance News) - The FTSE 100 underperformed on Wednesday, weighed down by oil and mining stocks, but other European indices rallied.
The FTSE 100 index closed up 31.10 points, 0.4%, at 7,585.19. The FTSE 250 ended up 256.73 points, 1.3%, at 19,391.07 and the AIM All-Share closed up 5.30 points, 0.6%, at 843.93.
The Cboe UK 100 ended up 0.4% at 758.45, the Cboe UK 250 closed up 1.4% at 16,824.02, and the Cboe Small Companies ended up 1.0% at 13,612.46.
"While US stocks will have been kept in check today because of Fed minutes and then the run of job data, it still looks like investors are much keener on putting their money to work this side of the Atlantic. Sadly for the UK the FTSE 100 hasn't had another day of gains, with miners and oil firms weighing down the index," commented IG's Chris Beauchamp.
Investors were looking ahead to the Federal Open Market Committee meeting minutes from December, which are due to be released at 1900 GMT.
"At that meeting, the FOMC reduced the pace of tightening to 50 basis points but appeared more hawkish than expected, in that policymakers projected a higher terminal interest rate and indicated that monetary policy will remain contractionary for longer. The minutes should reveal more details, which should set the tone for next few days at least," said Fawad Razaqzada, market analyst at City Index and Forex.com.
Meanwhile, the latest data showed the downturn in the US manufacturing sector deepened in December, according to the latest figures from the Institute for Supply Chain Management on Wednesday.
The ISM manufacturing purchasing managers' index fell deeper into contraction at a reading of 48.4 in December, from 49.0 in November.
The reading confirmed a separate PMI survey from Tuesday from S&P Global, showing a reading of 46.2 in December, worsening from 47.7 in November.
There was also the latest US job openings and labour turnover summary from the Bureau of Labor Statistics.
Job openings were little changed in November, edging down by 54,000 to 10.46 million from a revised figure of 10.51 million in October.
In addition, the number of hires in November fell by 56,000 to 6.06 million, from 6.11 million in October.
"The JOLTs data provided little in the way of support for a cooling job market... Though we do expect easing in the months ahead as the economy cools and enters a recession in Q2, today's report keeps the Fed on track to lift rates again at February's meeting," commented Matthew Martin, US economist at Oxford Economics.
Stocks in New York were higher at the London equities close, with the DJIA up 0.3%, the S&P 500 index up 0.6%, and the Nasdaq Composite up 0.5%.
US stocks had mostly dipped into the red upon the release of the PMI and jobs data at 1500 GMT, before staging a recovery.
The dollar was mostly weaker against major currencies ahead of the FOMC minutes, but firmed against the yen.
The pound was quoted at USD1.2054 at the London equities close on Wednesday in London, higher compared to USD1.1980 late Tuesday. The euro stood at USD1.0598, higher against USD1.0550.
Against the yen, the dollar was trading at JPY131.87, higher compared to JPY130.89.
Meanwhile, Brent oil was quoted at USD78.07 a barrel, down significantly from USD83.03.
"Oil prices have tumbled again today, hit it seems by the uncertain near-term economic prospects for China amid surging Covid cases. While reliable data is seemingly hard to come by, the view appears to be that there'll be significant disruption in the coming months and then a recovery from around the middle of the year which should then boost demand," said Oanda's Craig Erlam.
The World Health Organization criticised China's "very narrow" definition of Covid deaths, warning that official statistics were not showing the true impact of the outbreak.
"We still do not have complete data," the WHO's emergencies director Michael Ryan told reporters.
"We believe that the current numbers being published from China under-represent the true impact of the disease in terms of hospital admissions, in terms of ICU admissions, and particularly in terms of deaths," Ryan said.
Oil majors BP and Shell were weighing on the FTSE 100, down 3.6% and 3.5% respectively.
The dimmer prospects for mineral demand from China also drove mining stocks lower. Glencore fell 6.9%, with Anglo American down 2.7%.
The price of gold was firming, however, on account of the weaker dollar. Gold was quoted at USD1,857.48 an ounce on Wednesday, sharply higher against USD1,829.14 late Tuesday.
Mexico-focused gold and silver miner Fresnillo, surged 7.3%.
Online grocery Ocado was also putting in a strong performance, up 9.0%.
Data from Kantar showed Ocado sales increased by 8.2% year-on-year in the 12 weeks to Christmas Day, as it maintained a market share of 1.7%.
Tesco sales, meanwhile, grew by 6.0%. It remained the UK's most popular supermarket though its market share slipped to 27.5% from 27.9%. Peer Sainsbury saw sales growth of 6.2%, though its market share fell to 15.5% from 15.7%.
Shares in Sainsbury's and Tesco closed up 4.8% and 2.6% respectively.
Meanwhile, FTSE 250-listed Wizz Air climbed 10%, as easyJet gained 7.5%. The airlines received a boost from positive passenger numbers from low-cost peer Ryanair.
The Dublin-based firm said passenger numbers grew 21% to 11.5 million in December from 9.5 million the previous year.
Ryanair said it operated over 65,500 flights in December with a load factor of 92%, compared to 81% a year prior.
On AIM, United Oil & Gas plunged 18% as it said drilling had failed to find hydrocarbons at the Abu Sennan licence.
The oil and gas company with exploration and appraisal assets in the Abu Sennan licence, onshore Egypt, announced it completed its drilling operations on the ASW-1X exploration well, drilling the well to a depth of 3,640 metres.
The company said although the well encountered net reservoir in the Abu Roash, Bahariya, and Alam El Bueib targets, the logs did not indicate that there were hydrocarbons present.
The ASW-1X well will be plugged and abandoned, and the Sino Tharwa-1 rig will be used to drill the ASH-8 development well, the first of the 2023 drilling campaign, the company said.
In European equities on Wednesday, the CAC 40 in Paris ended up 2.2%, while the DAX 40 in Frankfurt ended up 2.1%.
"In Europe, sentiment has been boosted because of warmer-than-expected weather at the start of the winter season, which has reduced fears about gas shortages. What’s more, data from Eurozone has improved, albeit from a very low base," Razaqzada continued.
The eurozone economy remained in a downturn at the end of 2022, though displayed some signs of improvement, data from S&P Global showed on Wednesday.
The seasonally adjusted S&P Global eurozone composite purchasing managers' index output index was 49.3 in December, up from 47.8 in November. Market consensus, as cited by FXStreet, had expected a reading of 48.8.
In the global calendar for Thursday, there's are services PMIs from China and Ireland overnight, with the UK to follow at 0930 GMT, and the US at 1600 GMT.
On the corporate side, there will be post-Christmas trading update from clothing retailer Next, bakery chain Greggs, and budget retailer B&M.
By Elizabeth Winter, Alliance News senior markets reporter
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