LONDON MARKET MIDDAY: Wait-and-see mode ahead of Jackson Hole

(Alliance News) - London stocks moved lower on Wednesday amid a dearth of corporate news and economic data to trade off, leaving investors bracing for remarks from the head of the US central bank at this week's annual Jackson Hole meeting.

The FTSE 100 index was down 22.31 points, or 0.3%, at 7,465.80 midday Wednesday. The mid-cap FTSE 250 index was down 107.83 points, or 0.6%, at 19,199.06. The AIM All-Share index was down 3.79 points, or 0.4%, at 895.90.

The Cboe UK 100 index was down 0.2% at 745.58. The Cboe 250 was down 0.5% at 16,550.57, and the Cboe Small Companies down 0.4% at 14,076.20.

In mainland Europe, the CAC 40 in Paris and the DAX 40 in Frankfurt were flat and down 0.1% respectively.

"Markets seem to have lost their momentum following the rally since mid-June. Investors have become nervous once again, with all eyes on Federal Reserve chair Jerome Powell and what he says this coming Friday," said Russ Mould, investment director at AJ Bell.

"Investors are worried that the US central bank will continue to raise interest rates at a rapid pace, despite lower-than-expected inflation figures in July. If this happens, we could well see another leg down in global markets as the summer draws to a close."

The gathering of central bankers at the annual Jackson Hole Economic Symposium in Wyoming starts on Thursday, under the theme 'Macroeconomic Policy in an Uneven Economy'. Federal Reserve Chair Jerome Powell delivers the keynote speech on Friday morning local time in the western US state.

With the economic calendar quiet on Wednesday, investors were left mulling over some weak economic data from Tuesday.

The S&P Global US composite purchasing managers' index registered 45.0 index points in August, down from 47.7 in July, and also reflecting a 27-month low, flash estimates showed.

Meanwhile, in the UK, the composite PMI slipped to an 18-month low of 50.9 in August from 52.1 in July. This was due to the manufacturing PMI slumping to 46.0 from 52.1, well below expectations of 51.1.

The data added to existing recession concerns, and was compounded by renewed inflationary worries after Russian energy giant Gazprom last week said Nord Stream gas deliveries to Europe will be halted from August 31 to September 2 for "maintenance".

Brent oil was trading at USD101.26 a barrel midday Wednesday, up from USD99.90 late Tuesday amid supply concerns.

Higher energy prices will only compound inflation and cost-of-living concerns ahead of Ofgem's Friday announcement of the UK October domestic energy price cap. Analysts expect average annual bills to increase to more than GBP3,500 - jumping from the current GBP1,971.

Ahead of this, Philippe Commaret, managing director at EDF, warned that half of UK households could be in fuel poverty in January as a result of rocketing energy prices.

Ahead of the central bank event, the dollar was strengthening.

Sterling was quoted at USD1.1786 on Wednesday, lower than USD1.1864 at the London equities close on Tuesday.

The euro traded at USD0.9936, down from USD0.9987 late Tuesday. Against the yen, the dollar was quoted at JPY136.60 versus JPY136.28.

Gold was quoted at USD1,745.31 an ounce, down from USD1,751.38 on Tuesday.

Wall Street is on track for a muted start, with investors reticent of making big moves ahead of Jackson Hole. The Dow Jones and Nasdaq Composite were both called down 0.1%, while the S&P 500 was pointed marginally lower.

In London, miners were weighing on the FTSE 100 amid global recession worries. Antofagasta was down 2.1%, Anglo American down 1.9%, and Rio Tinto down 1.6%.

In a quiet day for UK corporate news, Lookers was up 9.1% after the car dealer reported a strong first half despite supply chain issues.

Revenue for the six months to June 30 rose 3.6% to GBP2.23 billion from GBP2.15 billion a year before, driven by increases in used vehicles and aftersales. Pretax profit slipped marginally to GBP49.9 million versus GBP50.4 million.

Profit performance was "underpinned by material improvement in new vehicle gross profit margin", the firm said. Lookers's margin strengthened to 12.7% from 12.0%.

Peer Pendragon rose 7.7% in a positive read-across.

Cineworld fell a further 10%, taking its year-to-date decline to 92%. The Picturehouse cinema operator on Monday warned it is considering filing for Chapter 11 bankruptcy in the US, as it continues to battle with liquidity issues.

This was after last week saying recent cinema admission levels have been below expectations.

Allied Minds tumbled 41% after saying it will consult with shareholders over a possible share delisting from London following a strategic review.

Under the review, the board weighed up the costs of its listing in London and decided it is "prohibitively high" relative to the company's size.

Allied Minds said it judged that maintaining a public listing is "no longer in the best interests" of the company and its shareholders.

"The Allied Minds board therefore now intends to formally consult with shareholders regarding a possible delisting of the company," the Boston, US-based firm said.

Tracsis rose 4.4% after saying it expects full-year earnings ahead of expectations and strong revenue growth.

The Leeds-based traffic data and transportation services firm expects to report revenue of GBP69.0 million for the financial year which ended July 31. This would represent a 37% increase from GBP50.2 million the year before. Tracsis attributed this to strong organic and acquisitive growth.

Tracsis expects its adjusted earnings before interest, tax, depreciation and amortisation to be ahead of market expectations. In financial 2021, the company reported adjusted Ebitda of GBP13.0 million.

Still to come in Wednesday's economic calendar are US durable good orders at 1330 BST.

By Lucy Heming; lucyheming@alliancenews.com

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