London's FTSE 100 rose on Wednesday as oil majors tracked gains in crude prices and exporters benefitted from a weaker pound, while markets waited for minutes of the US Federal Reserve's July meeting for signs of further policy easing. The main index added 1.1% to post its largest gains in nearly three weeks, with a boost from Shell and BP
helping the index recover most of the previous session's losses. The mid-cap FTSE 250 also rose by the same level. BAT, AstraZeneca and other stocks that book a major chunk of their earnings in dollars gained from a fall in sterling as investors took little heart from hints by German Chancellor Angela Merkel that there might be room for Brexit negotiation as chances of a no deal grow.
NMC Health, a United Arab Emirates-based healthcare provider, climbed more than 4% to be among top FTSE 100 gainers ahead of Thursday's scheduled trading update. The overall mood was cheery ahead of the Fed's minutes with hopes of lower interest rates in the near-term to cushion blows from a bruising US-China trade war and quell fears of an impending recession.
On US President Donald Trump's Tuesday comments about confronting China over trade, Spreadex analyst Connor Campbell said, "that kind of talk puts even more pressure on the Fed to safeguard the American economy, meaning investors are going to be on high alert for hints." Investors have steered clear of riskier assets in recent weeks, putting the FTSE on course for its worst month in four years and making the Fed's minutes all the more crucial.
Merging mid-cap lenders OneSavings and Charter Court Financial gave up 5% and 4.6% respectively, after they warned of the Brexit impact on housing and credit. "The bank warned it will tighten its lending criteria on account of the 'macroeconomic outlook' and that played on traders' minds," CMC Markets' analyst David Madden said. Ryanair slipped 1% after a London court rejected the Ireland-based budget carrier's application to prevent some of its British pilots from going on strike later in the week.
Rating actions drove steep moves among mid-cap and small-cap stocks. Outsourcing group Capita surged 3% after Goldman Sachs upgraded the stock. Small-cap Nostrum Oil & Gas plummeted 22% to an all-time low after Berenberg slapped the stock with a double-downgrade on its rating and slashed its price target to 25 pence from 200 pence.
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