London close: Stocks edge higher
London stocks were up again on Wednesday, having hit a fresh all-time high at one point, as investors welcomed less hawkish than feared comments from US Federal Reserve chair Jerome Powell overnight.
The FTSE 100 edged up 0.26% at 7,855.17, while the second-tier index added 0.57% to 20,303.81.
Powell said on Tuesday that he was expecting to see "significant" declines in inflation this year, but also acknowledged that interest rates may need to rise further amid job market strength.
“The optimism displayed by the FTSE 100 in the morning session has ebbed slightly, with most of the day’s gains being given back," said IG chief market analyst Chris Beauchamp.
"While the index did make a new high, investors have not been too keen to push it much further. As corporate reporting slows down in the UK as well as in the US, a period of retracement might not be out of place. Nonetheless, the outlook for the year seems much better now that recession fears have eased."
On home shores, the National Institute of Economic and Social Research forecast that the UK will narrowly avoid recession, but warned it would still feel like one for millions as the cost-of-living crisis continues to bite.
Publishing its latest UK economic outlook, NIESR said it expected the economy to avoid a technical recession in 2023, with GDP growth instead remaining largely flat throughout the year.
It forecast GDP of just 0.2% for 2023, down from an earlier forecast for 0.7%, and 1% in 2024, down from 1.7% A recession is defined by two consecutive quarters of negative growth. However, it also warned that for "at least" 7m households, it would still feel like a recession.
In equity markets, Frasers Group jumped to the top of the FTSE 100 after saying said it was no longer going ahead with its acquisition of the Rascal Clothing brand from JD Sports and confirming completion of the purchase of five of the remaining seven premium fashion brands - Cricket, Tessuti, Scotts, Giulio and Choice. JD Sports also gained.
BP rose for the second day in a row after posting record profits on Tuesday. The stock was boosted after Barclays hiked its price target on the shares to 1,000p from 700p.
Housebuilder Barratt Developments advanced as it reported a jump in profits but cut its dividend, as the housing market started to cool down in response to rising interest rates and mortgage costs. The company reduced the interim dividend by 9% to 10.2p a share as it posted pre-tax profits of £501.5m, up 15.9%, with revenue up 24% to £2.8bn.
Elsewhere, transport operator FirstGroup gained after saying it had agreed to buy buy Essex-based bus group Ensignbus for an undisclosed sum.
On the downside, corrugated packaging company Smurfit Kappa fell even as it reported a rise in full-year profit and revenue and lifted its final dividend, as it said that inflation had moderated in the latter part of the year. Peers DS Smith and Mondi also lost ground.
Imperial Leather maker PZ Cussons and media publisher Future were in the red after interim results and a trading statement, respectively.
FTSE 100 (UKX) 7,885.17 0.26%
FTSE 250 (MCX) 20,303.81 0.57%
techMARK (TASX) 4,553.21 0.84%
FTSE 100 - Risers
BT Group (BT.A) 138.15p 3.33%
BP (BP.) 533.20p 3.25%
Next (NXT) 6,860.00p 1.99%
Persimmon (PSN) 1,493.50p 1.98%
Hiscox Limited (DI) (HSX) 1,147.00p 1.87%
Barratt Developments (BDEV) 467.90p 1.70%
Abrdn (ABDN) 212.90p 1.38%
Flutter Entertainment (CDI) (FLTR) 12,860.00p 1.26%
HSBC Holdings (HSBA) 612.40p 1.22%
Rentokil Initial (RTO) 500.00p 1.19%
FTSE 100 - Fallers
Smith (DS) (SMDS) 350.00p -4.03%
Smurfit Kappa Group (CDI) (SKG) 3,373.00p -3.30%
Mondi (MNDI) 1,520.50p -2.28%
RS Group (RS1) 990.00p -2.17%
Scottish Mortgage Inv Trust (SMT) 757.00p -1.48%
Haleon (HLN) 328.40p -1.47%
Sainsbury (J) (SBRY) 264.80p -1.38%
Anglo American (AAL) 3,343.50p -1.28%
DCC (CDI) (DCC) 4,613.00p -1.11%
Fresnillo (FRES) 820.40p -1.09%
FTSE 250 - Risers
Harbour Energy (HBR) 318.00p 6.35%
Molten Ventures (GROW) 386.00p 5.36%
Tullow Oil (TLW) 35.98p 4.78%
Chemring Group (CHG) 287.00p 4.17%
Helios Towers (HTWS) 109.90p 4.17%
Network International Holdings (NETW) 289.60p 3.95%
ITV (ITV) 89.90p 3.76%
Tate & Lyle (TATE) 804.20p 3.75%
Currys (CURY) 74.90p 3.52%
Hammerson (HMSO) 30.13p 3.18%
FTSE 250 - Fallers
PZ Cussons (PZC) 194.80p -8.97%
Future (FUTR) 1,501.00p -6.36%
National Express Group (NEX) 127.90p -6.02%
Syncona Limited NPV (SYNC) 165.20p -4.73%
Mitchells & Butlers (MAB) 161.70p -2.77%
TP Icap Group (TCAP) 173.40p -2.77%
Fidelity China Special Situations (FCSS) 279.00p -2.45%
Travis Perkins (TPK) 1,020.50p -2.39%
Howden Joinery Group (HWDN) 703.20p -2.38%
Bodycote (BOY) 639.00p -2.37%