European markets jump as traders hope for dovish Fed report

European stocks moved higher as the pound drifted lower ahead of Boris Johnson’s Brexit talks with German premier Angela Merkel.

The FTSE 100 closed 78.97 points higher at 7,203.97 at the end of trading on Wednesday.

UK and European stocks have been buoyed by traders buying up stocks ahead of the announcement of details from the Federal Reserve’s latest meeting.

In July, the Fed cut rates and investors are hoping that dovish language in the report could suggest further cuts by the central bank.

Connor Campbell, financial analyst at Spreadex, said: “Wednesday turned into another optimistic session for the US and European indices, who appear to be putting all their eggs in a central bank basket.

“Ahead of this evening’s potentially crucial Fed meeting minutes, investors barrelled back into the Western indices, increasingly confident that central banks will step in to try and avert a recession.”

The major European markets also closed in the green on Wednesday. The German Dax rose by 1.3%, while the French Cac moved 1.7% higher.

The Dow Jones pushed higher as US traders hope the Fed will shed more light on its stance, despite facing fierce criticism from President Trump.

Sterling lost its gains from Tuesday’s positive comments from Angela Merkel, as the UK’s relationship with the EU remains uncertain, ahead of further Brexit talks.

The pound was 0.21% down at 1.214 versus the US dollar, and down 0.21% against the euro at 1.094.

In stocks, OneSavings Bank saw shares dip despite unveiling loan growth as it prepares to integrate Charter Court into its business after a £1.6 billion merger.

The lender said pre-tax profits were flat at £91 million in the six months to June 30 but rose 6% on an underlying basis to £96.9 million.

Shares in the company closed 17.6p lower at 337.8p.

EasyHotel saw shared rise slightly after bidders Ivanhoe Cambridge and property fund manager ICAMAP said they are set to take over the business despite objections from billionaire founder Sir Stelios Haji-Iannou.

Sir Stelios accused fund manager ICAMAP of trying to “steal” easyHotel from under investors’ noses, in his latest attempt to block a takeover of the business.

EasyHotel saw shares increased by 1.5p to 96p at the end of trading on Wednesday.

Hostelworld was one of the biggest fallers, as shares plummeted after it warned than profits will be lower than predicted following disappointing summer booking numbers.

Shares in the company sank by 15.4p to 146.4p at the close of play.

Infrastructure group Costain saw shares jump despite a significant fall in profits over the first half of the year after a dearth in contract wins.

Shares in Costain closed 16.6p higher at 162p.

The price of oil was given a lift by the latest Energy Information Administration report which highlighted a drop in inventories.

The price of a barrel of Brent crude oil jumped by 0.97% to 60.6 US dollars.

The biggest risers on the FTSE 100 were Burberry, up 95p at 2,204p, Tui, 28.4p at 789p, Flutter Entertainment, up 250p at 6,684p and DS Smith, up 10.4p at 332.6p.

The biggest fallers on the index were Phoenix Group, down 16p at 643.5p, RBS, down 2.6p at 181.9p, Legal & General, down 2.9p at 221.1p, and BHP, down 21p at 1,713.8p.

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