Market Analysis

Minutes from the Fed meeting are somewhat ahead of London's FTSE 100

Amos Simanungkalit · 22 Aug25.6K Views

London's FTSE 100 closed slightly higher on Wednesday as traders exercised caution ahead of the release of the Federal Reserve's July meeting minutes and upcoming speeches from policymakers. Meanwhile, mid-cap stocks surged, with the pound hovering near one-year high levels.

The blue-chip FTSE 100 index edged up by 0.1%, rebounding from its worst day since August 5 in the previous session. The FTSE 250 mid-cap index rose by 1%. The pound stabilized near the one-year high it reached against the dollar the day before, as the U.S. currency faced pressure from increasing expectations of Federal Reserve interest rate cuts.

Investors digested a downward revision in U.S. payroll data, while attention shifted to the anticipated release of the minutes from the Fed's July policy meeting at 2:00 p.m. ET (1800 GMT), where Chair Jerome Powell suggested a possible rate cut in September.

Market participants are now looking for clues on the pace of monetary policy easing following a series of mixed economic data from the U.S.

The chemicals sector led the gains with a 2.2% increase, driven by a 4.4% rise in Elementis after Barclays upgraded the specialty chemicals stock to "overweight" from "equal weight" and raised its price target.

The beverages sector followed with a 2% rise, as spirits maker Diageo gained 2%, mirroring the upward movement in European drink stocks Pernod Ricard and Remy Cointreau.

Conversely, the pharma and biotech sectors were the top decliners, down 0.5%, while oil and gas shares fell 0.3% as crude prices dipped.

Later this week, investors are keenly awaiting Fed Chair Powell's speech at the Jackson Hole symposium in Wyoming, where he is expected to acknowledge the case for a September rate cut amid recent dovish remarks from some Fed officials.

Among individual London stocks, Mobico surged 17.7% after the British transport company reported an over 28% increase in its first-half profit.

On the other hand, Watkin Jones plummeted 32.8% after missing profit estimates for the year and announcing it was reviewing funding options. This was followed by a downgrade to "hold" from "buy" by brokerage Peel Hunt.