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(Alliance News) - Stocks in London ended higher on Wednesday, with the FTSE 100 hitting its highest level in almost a year as the pound fell on hopes of a UK interest rate cut. The FTSE 100 index closed up 50.13 points, or 0.7%, at 7,609.32. The large cap index closed at its highest level since late August 2018. The FTSE 250 ended up 131.50 points, or 0.7%, at 19,790.83, and the AIM All-Share closed up 3.74 points, or 0.4%, at 924.27.The Cboe UK 100 ended up 0.6% at 12,905.57, the Cboe UK 250 closed up 0.7% at 17,681.09, and the Cboe Small Companies ended up 0.5% to 11,369.96.In Paris the CAC 40 ended up 0.8%, while the DAX 30 in Frankfurt ended up 0.7%. "The FTSE charged higher for a fourth straight session on Wednesday, helped in part by a weaker pound, easing monetary policy expectations and M&A. Stocks across the globe are extending gains on optimism of more dovish central banks. UK & US data have missed expectations, the ECB has appointed a cautious Christine Lagarde and Trump is appointing two Fed members who are known for their dovish streak. The prospect of easing financial conditions and lower borrowing costs is sending stocks higher," said City Index analyst Fiona Cincotta. On the London Stock Exchange, tobacco stocks ended among the best blue chip performer after Boris Johnson, the frontrunner in the race to succeed Theresa May as UK prime minister, pledged to halt hikes on so-called "sin taxes", which include levies on tobacco, alcohol and sugar. British American Tobacco and Imperial Brands closed up 2.5% and 2.4%, respectively. The former foreign secretary committed to review the effectiveness of such taxes and to ask whether they unfairly hit those on low incomes. The Tory MP for Uxbridge & South Ruislip also vowed not to introduce new ones until the review has been completed, as he hailed Brexit as an opportunity to examine tax policy. Johnson's campaign cited taxes on products high in salt, fat and sugar as examples. His team did not immediately respond to requests as to whether the review would also include cigarettes and alcohol taxation.In the FTSE 250, soft drinks makers Britvic and AG Barr closed up 2.1% and 0.3%, respectively. Blue chip sportswear retailer JD Sports Fashion closed up 2.9% after the Bury, Greater Manchester-based firm expressed confidence in delivering pretax profit for its current financial year in line with market expectations, as its sales grew across all regions in the year-to-date.JD Sports - which was promoted to the FTSE 100 index last month - said it has continued to achieve "encouraging" like-for-like sales growth in the year-to-date, both in the UK and internationally.Vodafone Group closed up 2.1% after the telecommunications firm said it has launched its 5G network, and will offer unlimited data on both the new 5G network and its 4G network with effect on Wednesday next week. J Sainsbury closed down 0.5% after the supermarket chain said it intends to reduce costs after sales in the first quarter of its current financial year were hurt by a poor performance from the general merchandise and clothing units. The FTSE 100-listed grocer said like-for-like sales, excluding fuel, declined by 1.6% in the 16 weeks to last Saturday. Including fuel, like-for-like sales in the first quarter fell by 1.0%. Total sales excluding fuel, meanwhile, reduced by 1.2%, with total sales including fuel falling by 0.6%. By comparison, like-for-like sales excluding fuel in the first quarter of Sainsbury's financial 2018 rose by 0.2%, and like-for-like sales including fuel were up by 2.6%.Sainsbury's said retail markets remain highly competitive, and promotional, and the consumer outlook continues to be uncertain.In the FTSE 250, Sophos Group closed up 8.1% after JPMorgan raised the cybersecurity firm to Overweight from Neutral. In addition, Sophos was benefitting from a positive read-across after reports emerged that US chipmaker Broadcom is nearing a USD15 billion deal to buy cybersecurity company Symantec Corp. Symantec shares were up 13% while Broadcom shares were down 3.9% on Wall Street. The pound was quoted at USD1.2564 at the London equities close, down from USD1.2595 at the close Tuesday, following disappointing domestic economic data.The latest UK services purchasing managers' index points to near stagnation in the key sector and economic contraction in the second quarter, the latest survey by IHS Markit and the Chartered Institute of Procurement & Supply showed. The Business Activity Index slipped to 50.2 in June, down from 51.0 in May and registering the lowest reading for three months. June's print was only just above the no-change mark of 50 which separates expansion from contraction. Subdued activity was often attributed to "sluggish" domestic economic conditions and greater risk aversion due to ongoing Brexit uncertainty, said IHS Markit. Service providers remain optimistic over their prospects, but the degree of confidence dipped in June after May's eight-month high. Some firms anticipated a rebound in demand following greater clarity over Brexit, while others thought domestic political uncertainty would continue to hold back spending.On Monday, IHS Markit had reported the UK manufacturing PMI fell to 48.0 points in June from 49.4 in May, while saying on Tuesday the UK construction PMI dropped dramatically 43.1 points in June from 48.6 in May."This week's data will have heaped pressure on the Bank of England to cut interest rates. With all three major sectors in contraction or on the brink of contraction, it would be unusual for a central bank not to look towards easing monetary policy. The prospect of a rate cut sent the pound lower. The weaker pound boosted the multinationals on the FTSE 100, which earn profits abroad, so gain on the beneficial exchange rate," said Cincotta. The euro stood at USD1.1284 at the European equities close, marginally lower from USD1.1297 late Tuesday, after Christine Lagarde, head of the International Monetary Fund, was nominated to replace Mario Draghi when he steps down as the European Central Bank president at the end of October.Lagarde's nomination was not widely expected by investors due to the former French finance minister's lack of economic training and experience in monetary policy.Analysts at Oxford Economics said: "The fact that she is not a trained economist means she will heavily rely on ECB staff and the more technically oriented members on the Executive Board to decide the right policy mix within the ECB's toolkit. In that sense, the choice of Philip Lane as chief economist becomes even more relevant in the absence of a president without a well-known bias on monetary policy (eg Bundesbank's Jens Weidmann), as it ensures a strong level of policy continuity. "With no central bank experience, it's difficult to gauge Lagarde's views on monetary policy, but based on previous statements, she seems to favour a moderately dovish stance and she has expressed support for the central bank's use of unconventional policies. In this sense, Lagarde's choice fits well with our long-held view that Draghi's departure should not cause a major shift in the ECB's monetary policy stance."Stocks in New York were higher at the London equities close, on track for their third straight record high close of the week.The DJIA was up 0.4%, the S&P 500 index up 0.5% and the Nasdaq Composite up 0.6%.Financial markets will close early at 1300 EST on Wednesday and remain closed on Thursday for the Independence Day public holiday. Brent oil was quoted at USD63.12 a barrel at the equities close, up from USD62.96 late Tuesday.US crude and gasoline stockpiles fell less than forecast in the week to June 28, the Energy Information Administration said.Crude oil inventories fell by 1.1 million barrels in the last week, compared with analysts' expectations for a decrease of 2.9 million barrels.Gold was quoted at USD1,418.40 an ounce at the London equities close, up from USD1,399.05 late Tuesday. The precious metal touched a high of USD1,435.82 overnight. Commenting on the gold price rise, analysts at FXPro said: "Recently, the world's largest central banks have softened their policies or promised to carry out stimulus. Investors, in search of a safe haven, now pay attention to defensive assets - especially gold. As a result, it's course abruptly returned to the 6-year highs area, above USD1,430. Purchases intensified on the declining profitability of debt markets and historical lows on EU bonds, including Germany."When the world central banks soften the policy actively, it reduces the profitability of the debt markets and provokes increased inflation. In addition, US markets continue to update their historic highs, forcing investors to think about the need for diversification. In this case, gold is one of the ways of preserving the investment value."A light economic events calendar on Thursday has eurozone retail sales figures at 1000 BST. The UK corporate calendar on Thursday has third-quarter results from Primark clothing chain owner Associated British Foods and from housebuilder Persimmon. London Close is available to subscribers as an email newsletter. Contact info@alliancenews.com