London midday: Stocks tick higher as investors eye Fed minutes
London stocks had ticked a little higher by midday on Wednesday after a flat start, as investors eyed the latest Federal Reserve minutes.
The FTSE 100 was up 0.2% at 7,517.07.
Richard Hunter, head of markets at Interactive Investor, said: "After a sprightly start to the New Year, investor focus switched to the more pressing issue of interest rate hike expectations.
"Rising Treasury yields in the US prompted a bout of rotation from high growth stocks, such as technology, into value, boosting financial and industrial shares.
"In particular, interest rate sensitive stocks such as the banks attracted buying interest ahead of the imminent fourth quarter reporting season. Although it is extremely unlikely that rates will rise to historical levels, there is nonetheless an improvement in sentiment given that the impending environment should improve prospects for the banks over the coming months.
"Minutes are due later from the latest Federal Reserve meeting in December, and will likely reveal the latest thinking on the need to curb stubbornly high inflation by tightening policy. As such, the current expectation is for an initial hike in March, which is part of the reason for rising yields."
In equity markets, broker notes provided a boost, with online supermarket Ocado topping the FTSE 100 after an upgrade to ‘buy’ from ‘hold’ at Berenberg.
InterContinental Hotels was also trading higher after an upgrade to ‘buy’ from ‘neutral’ at UBS.
LSE was lifted by an upgrade to ‘buy’ from ‘neutral’ at Citi, while plumbing and heating products distributor Ferguson rose after an upgrade to ‘buy’ from ‘hold’ at Berenberg.
On the downside, gambling software maker Playtech was weaker after it and potential bidder JKO asked Britain’s Takeover Panel for more time for the latter to declare its intentions on any takeover offer. Playtech said it was also postponing court and shareholder meetings relating to the offer by Aristocrat Leisure Limited, previously scheduled for January 12 to February 2.
Outsourcer Capita was in the red after the Competition and Markets Authority served an initial enforcement order over the planned £62m sale of its emergency services business to NEC Software Solutions.