London close: Stocks end slightly off ahead of Fed

An injection of liquidity into Chinese banks failed to lift UK stocks on Wednesday, as investors treaded cautiously before a policy decision from the Federal Reserve.

The FTSE 100 finished the session lower by 0.17% at 6,780.19, down from the 6,792.24 seen on Tuesday, its lowest close since 22 August.

The index has traded broadly sideways over the past week as concerns about Chinese economic growth and nervousness ahead of the Federal Open Market Committee (FOMC) meeting and Scottish referendum have eroded risk appetite.

The two-day FOMC meeting wraps up after European markets close with investors watching for a possible change in language by chair Janet Yellen to signal when the first increase in interest rates may come after the end of quantitative easing.

Nevertheless, analysts are sceptical that she might choose to “pull the trigger” just yet, given the risk of provoking an undue tightening in financial conditions.

Minutes from the latest Bank of England policy decision were released on Wednesday and showed that policymakers voted 7-2 in favour of keeping rates on hold, unchanged from the previous time around. Nevertheless, analysts viewed the minutes as relatively dovish with committee members pointing out that "downside risks to UK growth in the medium term had probably increased".

Economic data was also in focus and showed that the UK jobless rate fell to 6.2% in the three months to July, down from 6.4% previously and the 6.3% consensus forecast.

Imagination rebounds after trading update, financials move higher

Imagination Technologies rebounded strongly after a fall the previous session as it said that despite a volatile pound affecting sales, trading in the first quarter was in line with expectations. Sector peer ARM Holdings was also a high riser.

Engineer Smiths Group headed the other way after missing expectations with a 5% fall in annual revenues to £2.95bn on the back of foreign exchange headwinds and a small disposal.

Despite disappointing results in the fashion division, sportswear retailer JD Sports Fashion more than doubled first-half profits year-on-year thanks to strong performances across sports and outdoor clothing, helping shares higher early on.

Vodafone rose amid reports that it, along with network operator EE, are considering buying up parts of Phones 4U, the mobile-phone retailer that went into adminstration at the weekend.

Consumer-goods packaging group DS Smith gained after saying it had made good progress since the start of its financial year with volumes continuing to grow despite competitive market conditions.

Market Movers
techMARK 2,828.54 -0.13%
FTSE 100 6,780.90 -0.17%
FTSE 250 15,576.72 -0.10%

FTSE 100 - Risers
Royal Mail (RMG) 429.60p +3.52%
Barratt Developments (BDEV) 392.00p +3.08%
International Consolidated Airlines Group SA (CDI) (IAG) 375.70p +2.45%
St James's Place (STJ) 694.50p +2.43%
ARM Holdings (ARM) 940.50p +2.23%
Intu Properties (INTU) 342.90p +2.05%
Lloyds Banking Group (LLOY) 74.84p +1.82%
London Stock Exchange Group (LSE) 1,864.00p +1.53%
Persimmon (PSN) 1,352.00p +1.50%
3i Group (III) 378.90p +1.34%

FTSE 100 - Fallers
Smiths Group (SMIN) 1,268.00p -6.00%
Unilever (ULVR) 2,619.00p -2.42%
SABMiller (SAB) 3,577.00p -2.29%
Reckitt Benckiser Group (RB.) 5,390.00p -1.91%
Intertek Group (ITRK) 2,646.00p -1.89%
Diageo (DGE) 1,812.50p -1.87%
Fresnillo (FRES) 798.00p -1.72%
Smith & Nephew (SN.) 1,052.00p -1.59%
Admiral Group (ADM) 1,219.00p -1.46%
Antofagasta (ANTO) 753.00p -1.18%

FTSE 250 - Risers
Imagination Technologies Group (IMG) 199.50p +5.56%
Smith (DS) (SMDS) 286.90p +5.09%
ICAP (IAP) 376.40p +4.82%
JD Sports Fashion (JD.) 425.10p +4.19%
Cairn Energy (CNE) 184.50p +3.65%
Redrow (RDW) 281.70p +3.22%
Afren (AFR) 102.90p +2.95%
Evraz (EVR) 130.90p +2.59%
Crest Nicholson Holdings (CRST) 334.00p +2.45%
Taylor Wimpey (TW.) 112.80p +2.36%

FTSE 250 - Fallers
Oxford Instruments (OXIG) 1,086.00p -5.15%
Domino Printing Sciences (DNO) 561.00p -4.51%
Serco Group (SRP) 293.00p -3.78%
PZ Cussons (PZC) 372.00p -3.18%
Fenner (FENR) 351.00p -3.17%
RPS Group (RPS) 271.30p -3.11%
Britvic (BVIC) 678.00p -3.07%
Synthomer (SYNT) 218.00p -3.02%
Euromoney Institutional Investor (ERM) 1,100.00p -3.00%
PayPoint (PAY) 1,028.00p -2.93%