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The FTSE 100 in London received some M&A impetus on Wednesday but still underperformed continental peers, amid share price falls for the mining sector.
The FTSE 100 index closed down 16.60 points, or 0.2% at 7,471.51 on Wednesday. The blue-chip index has now fallen for three days in succession, giving back 1.0% so far this week.
In mainland Europe, however, the CAC 40 in Paris ended up 0.4%, while the DAX 40 in Frankfurt ended up 0.2% on Wednesday.
Trade was still somewhat cautious, with investors deciding against big moves ahead of the Jackson Hole Symposium, which kicks off on Thursday.
Back in London, the FTSE 250 ended down just 1.66 points at 19,305.23. The AIM All-Share closed down 1.07 points, or 0.1% at 898.62.
The Cboe UK 100 ended down 0.1% at 746.61, the Cboe UK 250 closed down 0.1% at 16,618.79, and the Cboe Small Companies ended down 0.1% at 13,209.98.
‘Investors have become nervous once again, with all eyes on Federal Reserve chair Jerome Powell and what he says this coming Friday,’ AJ Bell analyst Russ Mould commented.
‘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 a keynote speech on Friday morning local time in the western US state.
His address follows successive 75 basis point rate hikes by the Fed, with markets now looking for clues as to whether the central bank will enact a similarly hawkish move when it meets next month.
The pound was quoted at $1.1813 at the London equities close Wednesday, down from $1.1864 at the close on Tuesday.
The greenback suffered on Tuesday after a poor US PMI. The US currency has regained some poise, however. Things remained bleak for the euro, with the single currency unable to lift itself from below dollar parity.
The euro stood at $0.9981 at the European equities close Wednesday, down against $0.9987 at the same time on Tuesday.
Against the yen, the dollar was trading at JP¥136.80 late Wednesday, up from JP¥136.28 late Tuesday.
In commodities, Brent traded back above the $100 a barrel mark, after falling below $92 threshold last week. Brent oil was quoted at $100.77 a barrel at the London equities close Wednesday, up from $99.90 late Tuesday.
Gold was quoted at $1,752.55 an ounce at the London equities close Wednesday, higher against $1,751,38 at the close on Tuesday.
Bullion's price action will be dictated by what central bankers, particularly the Fed's Powell, have to say at the Jackson Hole summit. Gold has an inverse relationship to the dollar, though it is also seen as a hedge against inflation.
In the FTSE 100, Aveva ended the best performer, jumping 27% after French energy management firm Schneider Electric said it is considering taking full-ownership of the firm.
Schneider currently owns roughly 59% of the Cambridge-based industrial software firm.
Aveva confirmed it was yet to receive an approach from Schneider. Schneider has until September 21 to announce whether it plans to field a takeover offer for Aveva.
Schneider shares ended down 1.1% in Paris.
Miners closed lower, hitting the FTSE 100 and leading to the index underperforming against European peers. Glencore fell 1.6%, while Anglo American and Rio Tinto both lost 2.2%.
Lookers added 11% after the car dealer posted a strong interim performance ‘underpinned by material improvement in new vehicle gross profit margin’.
Revenue for the six months to June 30 rose 3.6% to £2.23 billion from £2.15 billion a year before, driven by increases in used vehicles and aftersales.
Pretax profit slipped marginally to £49.9 million versus £50.4 million as Lookers explained that supply disruption during the half made trading conditions ‘challenging’.
Cineworld shares suffered again. It finished 6.7% lower. The Picturehouse operator on Monday warned it is considering filing for Chapter 11 bankruptcy in the US, as it continues to battle with liquidity issues.
Last week, it said recent cinema admission levels have been below expectations. Over the past week, the stock has fallen 87%. It is down 91% year-to-date.
On AIM, Rockhopper shares more than doubled after the oil & gas firm announced that the International Centre for Settlement of Investment Disputes ruled in its favour in arbitration proceedings against the Italian government.
The panel decided that Italy breached its obligations under the Energy Charter Treaty, entitling the company to compensation of €190 million with interest.
Chief Executive Samuel Moody said the decision will have ‘very positive financial implications’ for the firm.
Stocks in New York were green at the London equities close. The Dow Jones Industrial Average was up 0.4%, the S&P 500 index up 0.5%, and the Nasdaq Composite up 0.8%.
US durable goods orders stagnate in July, data from the Census Bureau showed on Wednesday, undershooting forecasts.
New orders for manufactured durable goods in July stalled at $273.5 billion, after June's monthly 2.2% rise. Consensus, according to FXStreet, was for a rise of 0.6% in July.
In a busy UK corporate calendar on Thursday, there are half-year results from building materials firm CRH and DIY retailer Grafton. Recruiter Hays and miner South32 publish full-year earnings.
In the economic calendar, there is a US GDP reading at 1330 BST, before the long-awaited Jackson Hole symposium kicks off.
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