London close: US political storm rains on Footsie's parade

London's top flight index finished the day on the backfoot but off its intra-session lows as gains in the shares of precious metals miners and index heavyweights Lloyds and Tesco helped to offset the drag from the gathering political storm clouds on the other side of the Atlantic.

The FTSE 100 edged lower by 18.56 points to end the day at 7,503.47, while the second-tier FTSE 250 closed down by 0.51% at 19,773.59.

Overnight, The New York Times said US president Donald Trump had asked Federal Bureau of Investigation chief James Comey to "let go" of an investigation into his former national security adviser, Michael Flynn.

That sent the Chicago Board of Options Exchange's VIX volatility index, or the so-called 'fear gauge' as it is known to traders, rocketed 25.54% to 13.37. In parallel, other traditional safe have assets such as gold futures and Gilts also found a strong bid.

Gold futures were up by 1.67% to $1,257.30/oz. alongside a six basis point drop in the yield on the benchmark 10-year Gilt.

Helping to buoy sentiment in the UK, jobs data released earlier on Wednesday showed the unemployment rate hit a 42-year low, even as real wage growth slowed down.

The unemployment rate unexpectedly fell to 4.6% from 4.7%, according to data from the Office for National Statistics, beating expectations for it to remain unchanged.

But despite the tightness of the labour market, employers are not increasing pay. Average weekly earnings excluding bonuses fell 0.2% in real terms compared with a year earlier, though was up 0.1% if bonuses are included.

In nominal terms, average weekly earnings rose 2.1% ex-bonuses, which was worse than the 2.2% increase the market expected and the smallest gain since July of last year, while the 2.4% gain including bonuses was in line with forecasts.

On a related note, economists at Oxford Economics said on Wednesday that the so-called equilibrium rate of unemployment might well lie much lower than the 4.5% estimated by the Bank of England.

"The predicament facing pay is the same as that facing the economy as a whole – how to restore what history suggests should be readily-attainable rates of progress in a world where policymakers’ pessimism errs towards accepting that this is as good as it gets," said Oxford Economics's Martin Beck.

On the UK corporate front, precious metals miner Fresnillo was the standout gainer as gold prices rallied on safe-haven demand amid worries about Trump.

Lloyds gained following news the government had sold its last 638,437,059 remaining shares in the lender on the previous day.

Energy supplier SSE turned higher after posting results that were better than it expected and lifting its total dividend.

Lloyds Banking Group was on the front foot after the UK government sold down its remaining shares in the bank, returning it to full private ownership.

Countryside Properties rallied after it said full-year profit was likely to be ahead of market expectations and reported a 31% jump in half-year completions and an increase in profit, while Tullow Oil gushed higher after making an "important" discovery in Northern Kenya.

Cyber security company Sophos - whose shares have benefited from the recent WannaCry security hack - racked up strong gains after its full-year results beat expectations with reported billings up 18.2% and a big hike in the dividend.

Rio Tinto was lifted by an upgrade to 'top pick' at RBC Capital Markets, while Virgin Money got a boost from a Credit Suisse upgrade.

Goingthe other way, British Land fell despite reporting a much stronger net asset value at its year end than the market was expecting and, despite the ongoing uncertainty around the economy, saying it was confident of generating better returns in the year ahead.

Pub group Mitchells & Butlers was in the red as it posted a drop in profit for the 28 weeks to 8 April despite a rise in sales, pointing to increased costs and exchange rate movements.

Spectris was also weaker as it appointed a new chairman and highlighted mixed trading in the year to date, while shares in estate agency Foxtons fell after it reported a 25% drop in revenues for the quarter to the end of March.

Shares in estate agency Foxtons fell after it reported a 25% drop in revenues for the quarter to the end of March, while Dunelm and Halfords were hit by downgrades at HSBC and Hikma was dented by a downgrade at Jefferies.

Market Movers

FTSE 100 (UKX) 7,503.47 -0.25%
FTSE 250 (MCX) 19,773.59 -0.51%
techMARK (TASX) 3,598.78 -0.44%

FTSE 100 - Risers

Fresnillo (FRES) 1,606.00p 2.75%
Tesco (TSCO) 182.30p 2.16%
Kingfisher (KGF) 365.70p 2.09%
Randgold Resources Ltd. (RRS) 7,470.00p 2.05%
Lloyds Banking Group (LLOY) 71.52p 1.95%
DCC (DCC) 7,405.00p 1.86%
Hargreaves Lansdown (HL.) 1,347.00p 1.74%
Taylor Wimpey (TW.) 199.60p 1.58%
Reckitt Benckiser Group (RB.) 7,611.00p 1.26%
Royal Mail (RMG) 430.80p 1.25%

FTSE 100 - Fallers

Ashtead Group (AHT) 1,560.00p -3.82%
CRH (CRH) 2,774.00p -3.48%
British Land Company (BLND) 651.50p -3.34%
Hikma Pharmaceuticals (HIK) 1,717.00p -2.77%
Rolls-Royce Holdings (RR.) 842.50p -2.60%
Glencore (GLEN) 290.00p -2.24%
Prudential (PRU) 1,731.00p -2.15%
Schroders (SDR) 3,141.00p -2.03%
Smurfit Kappa Group (SKG) 2,113.00p -1.99%
Legal & General Group (LGEN) 252.20p -1.94%

FTSE 250 - Risers

Sophos Group (SOPH) 395.40p 6.92%
IP Group (IPO) 150.00p 4.82%
CLS Holdings (CLI) 206.20p 4.14%
SIG (SHI) 131.90p 3.86%
Hochschild Mining (HOC) 280.70p 3.58%
Countryside Properties (CSP) 300.10p 2.81%
Acacia Mining (ACA) 438.10p 2.79%
Centamin (DI) (CEY) 164.90p 2.68%
Euromoney Institutional Investor (ERM) 1,119.00p 2.66%
Inchcape (INCH) 857.00p 2.63%

FTSE 250 - Fallers

Spectris (SXS) 2,563.00p -6.32%
Mitchells & Butlers (MAB) 258.00p -6.18%
Dunelm Group (DNLM) 591.50p -3.98%
Wetherspoon (J.D.) (JDW) 1,023.00p -3.50%
Auto Trader Group (AUTO) 405.50p -3.29%
Hill & Smith Holdings (HILS) 1,343.00p -3.24%
Keller Group (KLR) 916.50p -3.02%
Kaz Minerals (KAZ) 478.70p -2.98%
Electra Private Equity (ELTA) 2,665.00p -2.88%
Evraz (EVR) 188.50p -2.84%