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LONDON MARKET CLOSE: Stocks higher ahead of US Fed minutes

Stocks in London ended higher on Wednesday ahead of the release of the latest minutes from the US Federal Reserve, as the Brent oil price falling below the $100 mark failed to shake the FTSE 100 out of the green.

The Fed raised the stakes last month with 75 percentage point interest rate hike, taking the benchmark funds rate to a range of 1.5% to 1.75%. It was the first 75-basis-points increase since November 1994.

The FTSE 100 index closed up 82.30 points, or 1.2%, at 7,107.77. The FTSE 250 index closed up 279.17 points, or 1.5%, at 18,594.48. The AIM All-Share index closed up 6.99 points, or 0.8%, at 874.45.

The Cboe UK 100 index ended up 1.1% to 708.22. The Cboe 250 closed up 1.5% at 16,121.75, while the Cboe Small Companies finished 0.3% higher at 13,158.41.

In mainland Europe, the CAC 40 stock index in Paris closed up 2.0%, while the DAX 40 in Frankfurt rose 1.6%.

In the FTSE 100, abrdn closed up 5.4% after the investment manager unveiled a £300 million share buyback, with a first £150 million phase being conducted by with Goldman Sachs International.

At the other end of the large-caps, Fresnillo ended the worst performer, down 5.7%, after Credit Suisse started coverage on the gold miner at 'underperform'.

Energy stocks ended among the worst performers, tracking spot oil prices lower. BP closed down 1.5%, Shell down 2.2% and Harbour Energy down 5.6%. Midcap oil stocks Energean and Tullow Oil were the worst performers, shedding 4.7% and 6.2% respectively.

Brent oil was quoted at $99.67 a barrel at the equities close, down sharply from $105.18 at the close Tuesday. The North Sea benchmark fell below the $100 mark for the first time since late April.

In the FTSE 250, Trainline ended the standout performer, up 21%, after the rail and coach ticketing platform reported a ‘faster than anticipated recovery in rail passenger volume across Europe’. It said net ticket sales in the four months to June 30 were up 16% from pre-Covid times.

Trainline now expects net ticket sales growth between 18% and 27% versus pre-Covid levels. It expects revenue to be 22% and 31% above pre-virus levels.

It had previously expected net ticket sales in a £3.8 billion to £4.2 billion range, between 2.0% and 13% above the pre-Covid figure. Revenue was expected to land between £280 million and £300 million, which would have been between 7.3% and 15% above pre-virus levels.

Elsewhere, AO World closed down 8.5% at 43.00 pence. The appliance retailer said it has raised £40.3 million through a placing and PrimaryBid offer of shares, in order to strengthen its balance sheet.

Through the placing, the online electrical goods retailer issued 86.6 million shares at a price of 43 pence per share, to raise £37.3 million. Meanwhile, through the PrimaryBid offer, AO World issue 7.2 million shares at the same issue price as the placing, to raise £3.1 million.

The pound was quoted at $1.1917 at the London equities close, up from $1.1900 at the close Tuesday.

Sterling was recovering from a two-year low of $1.1899 in early trade as political turmoil engulfs the heart of the UK government.

UK Prime Minister Boris Johnson on Wednesday rejected calls by the Labour opposition to call a snap general election, after more than two dozen ministers quit his government.

‘I really don't think that anybody in this country wants politicians to be engaged in electioneering now,’ he told a committee of MPs. ‘And I think that we need to get on with serving our voters, and dealing with the issues that they care about.’

Johnson is facing a grilling by MPs on the influential Liaison Committee as ministers and aides continue to quit his government in protest at his leadership.

The crisis at the heart of Johnson's administration started to unfold on Tuesday evening when chancellor Rishi Sunak and health secretary Sajid Javid quit their posts, to be replaced by Nadhim Zahawi and Steve Barclay.

A series of ministers including Kemi Badenoch, Mims Davies, Alex Burghart, Robin Walker, Will Quince and John Glen resigned on Wednesday, along with several parliamentary private secretaries, as the crisis escalated for the PM.

Meanwhile, the euro hit a fresh 20-year low point against the dollar, fast closing in on parity as traders eye recession for the eurozone.

The euro stood at $1.0192 at the European equities close, down from $1.0240 late Tuesday.

Against the yen, the dollar was trading at JP¥135.56, down from JP¥135.90 late Tuesday.

Stocks in New York were mostly lower at the London equities close. The DJIA was down 0.2%, the S&P 500 index down 0.1% and the Nasdaq Composite up 0.1%.

President Joe Biden will tout his economic vision in the US industrial heartland Wednesday, as spiralling inflation and a stalled domestic agenda undermine his pledge of commitment to blue-collar America.

The Democratic leader's trip to Cleveland, Ohio, comes amid steady job growth and unemployment at just 3.6% – but sky-high living costs threaten his party's prospects in November's midterm elections.

Meanwhile, a series of interest rate hikes from the Federal Reserve has sparked ominous warnings from economists and investors that the world's largest economy is headed for a significant slowdown or recession.

White House officials told local media that Biden would discuss the ‘overall economic challenges’ facing the US, including the Covid-19 pandemic, the war in Ukraine and global inflation.

Gold stood at $1,738.77 an ounce at the London equities close, lower against $1,767.88 late Tuesday.

The economic events calendar on Thursday has UK Halifax house price index data at 0700 BST, the US ADP jobs report at 1315 BST and latest jobless claims numbers at 1330 BST.

The UK corporate on Thursday has trading statements from gambling firm Entain and housebuilder Persimmon. Electrical goods retailer Currys, authorised Rolex dealer Watches of Switzerland and budget airline Jet2 issue annual results.

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