LONDON MARKET MIDDAY: Stocks Mixed As US Rate Cut Expectations Rise

(Alliance News) - London shares were mixed at midday on Friday with the FTSE 100 hindered by the rising pound, as investors digested comments from the US Federal Reserve.Central banks should move quickly to address economic pain when interest rates are already low, a senior Federal Reserve official said. Wall Street took the remarks by John Williams - the influential vice chairman of Federal Reserve's monetary policy committee - as another sign the Fed is prepared to cut the benchmark lending rate later this month as insurance against an economic slowdown. Williams cited studies suggesting that when monetary policy is already easy, central banks should "move more quickly than you otherwise might" rather than waiting "for disaster to unfold." When rates are higher, authorities "can afford to move slowly and take a 'wait and see' approach," he said in a speech to a meeting of economic researchers. "When you only have so much stimulus at your disposal, it pays to act quickly to lower rates at the first sign of economic distress," said Williams, who is president of the New York Federal Reserve Bank.The FTSE 100 was 3.42 points lower at 7,489.43. The mid-cap FTSE 250 index was up 5.91 points at 19,541.04, while the AIM All-Share was 0.2% higher at 912.65.The Cboe UK 100 index down 0.2% at 12,677.18. The Cboe UK 250 was 0.1% higher at 17,438.05. The Cboe UK Small Companies was down 0.4% at 11,075.40.In mainland Europe, the CAC 40 index in Paris and DAX 30 in Frankfurt were up 0.3% and 0.4%, respectively. "European markets are higher, with hopes of a double rate cut from the Fed ramping up market optimism as we close out the week. New York Fed president John Williams' statement highlights a growing feeling that we could see the FOMC take more drastic steps to reverse their overzealous monetary tightening. With market expectations of a 50-basis point cut rising from 3.5% to 45.5% in just two weeks, the pricing of such a drastic move is going to continue dictating the pathway for the dollar," said IG Group's Josh Mahony. The pound was quoted at USD1.2528 at midday, up from USD1.2487 at the London equities close Thursday. In the FTSE 100, heavyweight mining stocks were among the risers as risk-on sentiment prevailed.Antofagasta was up 1.3%, Anglo America, up 1.2%, Rio Tinto, up 1.1% and BHP, up 1.0%. At the other end of the large cap index, advertising firm WPP was the worst performer, down 3.1% - suffering a negative read-across from French peer Publicis Groupe.Publicis late Thursday warned that traditional marketing trends were declining and this would have a detrimental effect on its key US business, as the company reported second-quarter earnings. "Our progress has been slowed down by the ongoing fee reduction on traditional advertising that continued to impact our overall US operations by around 300 basis points in the quarter," Chief Executive Officer Arthur Sadoun said.Publicis shares were down 8.8% in Paris.DS Smith was down 1.2% after the UK Competition & Markets Authority said customers could get a worse deal if flexible packaging solutions firm Liqui-Box completes its acquisition of DS Smith's plastic division. The initial phase of the regulator's investigation found the acquisition would create "insufficient competition" given Liqui-Box and DS Smith's are only two of four companies offering specialist Bag-in-Box packaging to food and drink suppliers in the UK. In the FTSE 250, Acacia Mining was the standout performer, up 20% at 223.27 pence after the gold miner agreed to be taken over by parent company Barrick Gold. Acacia has agreed a deal with Canada's Barrick, which already owns 64% of its shares, which will see Barrick pay 0.168 of its own shares per Barrick share, equivalent to a value of 232 pence per Acacia share. The deal values Acacia at GBP951 million in total, though the stake under offer is worth GBP343 million. Barrick first made a move to acquire the rest of Acacia in late May, after the government of Tanzania said it would not enter any discussions with Acacia over its problems in the country. Barrick has been leading the talks on Acacia's behalf.Acacia will not be the first London gold miner to be gobbled up by Barrick. In late 2018, then-FTSE 100 gold miner Randgold Resources merged with Barrick, creating the world's largest gold miner. This resulted in Mexico's Fresnillo being the only pure gold miner in the large cap index in London.Aston Martin Lagonda was up 3.8% at 999.20p after the company's largest investor offered to buy another 3% stake in the DB9 sports car maker.Strategic European is to buy 6.8 million Aston Martin shares at GBP10.00 each, for approximately GBP68.4 million. This will take the combined stake of Investindustrial Advisors' funds to 34%. Strategic European Investment Group was set up last December, and is a subsidiary of Investindustrial VI, a fund managed by Investindustrial Advisors.At the other end of the midcaps, Close Brothers was the worst performer, down 3.4% after the merchant bank said it continued to deliver a solid performance amid mixed trading conditions. The firm said its banking division's loan book grew during the first 11 months of financial 2019, as the company saw a "solid" performance despite mixed trading conditions. The company's loan book reached GBP7.6 billion as at June 30, up from GBP7.3 billion at the end of the first 11 months of the last financial year. The euro stood at USD1.1235 at midday, higher than USD1.1224 at the European equities close Thursday. Stocks in New York were set to open higher, with the DJIA was called up 0.2%, the S&P 500 index up 0.1% and the Nasdaq Composite up 0.2%.Ahead in the US earnings calendar, credit card company American Express is slated to report second-quarter earnings before the US market opens on Friday.London Midday is available to subscribers as an email newsletter. Contact info@alliancenews.com