London pre-open: FTSE 100 called higher despite breakdown in US-China talks
Stocks are being called to start the session slightly higher despite reports that the first round of face-to-face trade talks between US and Chinese negotiators since the 28 June G20 leaders' summit in Japan had ended early.
According to Bloomberg News, the talks appeared to have ended almost as quickly as they had begun.
Despite that, the FTSE 100 was being called to start the session 16 points higher to 7,662.
In parallel, US futures were still pointing to a higher start to trading at the opening bell in New York, with sentiment boosted by better than expected quarterly numbers out of tech giant Apple.
Nonetheless, the market spotlight on Wednesday will be firmly on the US Federal Reserve, whose policymakers are widely expected to deliver a 25 basis point cut in the target range for official short-term interest rates as 'insurance' against the risk of a protracted downturn given the multiple headwinds from overseas.
Above all financial market participants are also keen to see to what extent Fed chairman Jerome Powell would vindicate, or not, expectations for several more interest rate cuts, with current market pricing in Fed funds futures pointing to at least two more reductions by the end of 2019.
Across the Channel meanwhile, recent soft data on German consumer prices and French second quarter gross domestic product growth mean that there are downside risks for releases due out on euro area CPI for July and on second quarter Eurozone GDP, both at 1000 BST.
Lloyds raises dividend
Banking giant Lloyds posted interim statutory profits of £2.2bn with underlying profits at £4.2bn on net income of £8.8bn and net interest margin at 2.90%. Total costs meanwhile declined by 5% to £4.0bn, while PPI compensation costs came in at £550m. Its return on tangible equity for the period came in at 11.5%. For the half, the lender posted earnings per share of 2.7p and raised its dividend payout by 5% to 1.2p per share.
BAE Systems improved its full year net debt guidance, now anticipating no change due to the favourable timing of a Qatari Typhoon order and the M109A7 programme. Meanwhile, the company reiterated the rest of its full-year guidance, including an anticipated mid-single digit improvement in underlying earnings per share, as the defence and aerospace company reported higher interim revenues, profits and order backlog than last year.
Smith & Nephew saw its revenue rise 1.8% on a reported basis in its half-year results, it said on Wednesday, coming in at $1.28bn. The FTSE 100 medical technology firm said its operating profit rose to $419m from $372m year-on-year for the six months ended 29 June, with earnings per share improving to 35.3 US cents from 31.4 cents. It said cash generated from operations totalled $543m, up from $418m at the same time 12 months ago.
Next reported an improvement in full-price sales in its first half on Wednesday, with the figure rising 4.3% year-on-year. The FTSE 100 fast fashion retailer said total sales, including markdown sales, were up 3.8% in the period. Of the improvement in full-price sales, the company said its physical retail stores saw a decline of 3.9% in the first half ended 27 July, while its online operation saw full-price sales surge 11.9% year-on-year.