The FTSE 100 managed to rally in afternoon trade on Wednesday to finish in positive territory after a strong start on Wall Street, though gains were only modest ahead of several key 'risk events' which have the potential to spark market volatility.
It is set to be a busy end to the week with central-bank policy decisions expected on Thursday from the Bank of Japan, Bank of England and the European Central Bank.
These will be followed by the all-important US jobs report on Friday which will be a large factor in the Federal Reserve's decision on whether or not to adjust current stimulus measures later this month.
The FTSE 100 finished up just 6.33 points at 6,474.74. However, the index rebounded strongly after hitting an intraday low of 6,424 in morning trade. The rally was ignited by decent gains for US markets helped by economic bellwetherFord Motor which reported 12% growth in new vehicle sales in August, its best retail-sales month in seven years.
World waiting on Congress vote on Syria
Fears about impending US military action in Syria were weighing on sentiment today as support for a Western intervention continues to grow.
The Senate Foreign Relations Committee last night gave the green light for a US attack on Syria, saying that the use of force "reflects the will and concerns of Democrats and Republicans alike".
This comes ahead of the crucial vote in Congress next week on President Barack Obama's call for action against the Bashar al-Assad regime which he claims is responsible for the deadly chemical weapons attack against the Syrian people in August.
Speaking in Sweden on Wednesday, Obama said the credibility of the US is on the line over its response. "We believe very strongly with high confidence that chemical weapons were used; we want to join with the international community for an effective response," he said.
Meanwhile, Russian President Vladimir Putin has warned America and its allies against taking one-sided action in Syria, saying any military strike without United Nations approval would be an "aggression".
Services PMIs come in mixed
After a series of better-than-expected manufacturing surveys from across the globe in recent days, data from the Eurozone services sector disappointed today with activity growing by less than forecast in August.
The Eurozone services purchasing managers' index (PMI) came in at 50.7, worse than the 51 estimate. Eurozone retail sales meanwhile increased by just 0.1% in July (forecast: +0.2%).
In contrast, there was no letting up in the recent string of strong UK data this morning with the outlook for British economy continuing to brighten. The UK services PMI rose from 60.2 to 60.5 (forecast: 59.7), the highest level since December 2006.
"Following surprisingly strong gains in August's manufacturing and construction surveys, today's services result at face value points to quarterly [economic] growth in Q3 not far off a rip-roaring 2%," said Martin Beck, UK Economist from Capital Economics.
FTSE 100: Airline stocks sink after Ryanair profit warning
Airline peers easyJet and IAG were flying lower after a gloomy outlook by Ryanair on the back of the hot weather in Northern Europe over the summer. Europe's largest budget airline scaled back its full-year profit guidance after worse-than-expected bookings but said that it could even fail to meet these forecasts if fares and yields continue to weaken over the coming winter.
IAG however managed to trim losses before the close slightly after reporting a 10.6% year-on-year jump in traffic numbers in August, with growth accelerating from the 6.6% annual rise registered in July.
Hargreaves Lansdown fell despite reporting record annual figures this morning. Full-year pre-tax profit rose 28% to £195.2m as the financial services company took on more clients and increased assets under administration by 38% rise in AuA to £36.4bn. Weighing on the price this morning could be Morgan Stanley's downgrade of the 'Diversified Financial' sector to 'neutral'.
TUI Travel, Resolution and BHP Billiton were also heavy fallers after going ex-dividend, meaning that from today new investors won't be able to get their hands on their latest dividend payments. Others that went ex-dividend on the blue-chip index include Admiral, Aggreko, ARM Holdings, IMI, Land Securities, Serco Group and Shire.
Even chemicals group Croda International was lower after going ex-div, shrugging off an upgrade by Exane BNP Paribas to 'outperform'. Sector peer Johnson Matthey however was a high riser after JPMorgan Cazenove raised its target price from 2,600p to 2,800p.
Telecoms titan Vodafone also performed well as investors continue to digest Monday's deal to sell its 45% stake in Verizon Wireless to US partner Verizon for $130bn. While Vodafone will give out a hefty cash return to shareholders, it still has plenty of headroom to make some big acquisitions with the proceeds. Analysts also speculated that the downsized firm could itself become an M&A target from bigger suitors - American firm AT&T is said to be apparently interested.
FTSE 250: Ashtead falls despite upbeat guidance
Equipment rental company Ashtead Groupsaid it now expects a full-year result ahead of previous expectations after a strong first quarter, but shares
slumped today pulling back after a strong +50% surge so far this year. Analysts at Panmure Gordon raised their target price for the stock today but noted that comparatives will become tougher as the year progresses.
Micro Focus and Phoenix were falling sharply today after going ex-dividend. A host of others were also trading without the rights to their latest payouts, including 888 Holdings, Betfair, Elementis, esure, Greggs, Hikma Pharmaceuticals, Jardine Lloyd Thompson, Michael Page International, National Express Group, Polymetal International, Regus, SEGRO and Xaar.
Kenmare Resources was higher after Goldman raised its recommendation to 'conviction buy', while Salamander Energy was boosted by a Morgan Stanley upgrade to 'equalweight'.
FTSE 100 - Risers
Vodafone Group (VOD) 207.00p +2.22%
BG Group (BG.) 1,271.00p +1.92%
Johnson Matthey (JMAT) 2,972.00p +1.89%
Petrofac Ltd. (PFC) 1,418.00p +1.58%
Barclays (BARC) 289.55p +1.56%
Imperial Tobacco Group (IMT) 2,184.00p +1.39%
CRH (CRH) 1,393.00p +1.31%
Smith & Nephew (SN.) 769.50p +1.12%
Glencore Xstrata (GLEN) 315.35p +1.01%
ITV (ITV) 169.40p +0.95%
FTSE 100 - Fallers
easyJet (EZJ) 1,215.00p -5.08%
Resolution Ltd. (RSL) 314.80p -3.26%
TUI Travel (TT.) 334.60p -3.21%
Associated British Foods (ABF) 1,841.00p -3.16%
Persimmon (PSN) 1,111.00p -2.71%
Carnival (CCL) 2,334.00p -2.14%
BHP Billiton (BLT) 1,902.50p -1.73%
Hargreaves Lansdown (HL.) 1,014.00p -1.65%
Severn Trent (SVT) 1,698.00p -1.45%
Wood Group (John) (WG.) 792.00p -1.43%
FTSE 250 - Risers
Kenmare Resources (KMR) 28.69p +5.48%
St. Modwen Properties (SMP) 303.10p +5.28%
Bumi (BUMI) 219.70p +5.27%
Centamin (DI) (CEY) 45.91p +3.94%
JPMorgan Indian Inv Trust (JII) 300.90p +3.90%
Hochschild Mining (HOC) 267.50p +3.68%
PZ Cussons (PZC) 425.80p +3.68%
Fisher (James) & Sons (FSJ) 1,130.00p +3.39%
Supergroup (SGP) 1,159.00p +2.84%
Daejan Holdings (DJAN) 3,876.00p +2.68%
FTSE 250 - Fallers
Ashtead Group (AHT) 651.00p -5.31%
Barratt Developments (BDEV) 299.50p -4.92%
Thomas Cook Group (TCG) 135.70p -4.84%
Berkeley Group Holdings (The) (BKG) 2,076.00p -3.84%
Micro Focus International (MCRO) 744.00p -3.44%
Phoenix Group Holdings (DI) (PHNX) 729.00p -3.44%
Amlin (AML) 378.60p -2.90%
Bellway (BWY) 1,326.00p -2.79%
Bovis Homes Group (BVS) 753.50p -2.77%
Dunelm Group (DNLM) 934.00p -2.61%