UK stocks edged higher on Wednesday after a sharp selloff in the previous session as investors assessed mixed earnings reports while keenly awaiting the U.S. Federal Reserve’s interest rate decision later in the day.
The blue-chip index was up 0.2 percent as of 0826 GMT.
While the Fed is widely expected to raise rates by 25 basis points at its policy rate announcement at 1800 GMT, hopes of a pause in increases have grown after a banking crisis that has threatened to hurt economic growth.
Lloyds Banking Group edged down 0.8 percent despite beating quarterly profit estimates, as the bellwether lender echoed rivals in maintaining its full-year forecasts.
“The bank kept its guidance unchanged even as expectations increase that the Bank of England is poised to raise rates further next week, potentially improving the outlook for margins further,” said Michael Hewson, chief market analyst at CMC Markets.
“This abundance of caution seems eminently sensible given that the higher rate and margin outlook do need to be tempered by the willingness of savers to move their funds around to get the best return in the current high inflation environment.”
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Beverage companies led sectoral gains, rising 1.4 percent as Coca-Cola HBC AG added 1.6 percent after saying full-year profit growth would be at the top end of its guidance.
However, energy stocks were a drag, down 1.2 percent, tracking weakness in crude prices.
Shares of TI Fluid Systems jumped 12 percent after the automotive fluid storage maker posted higher first-quarter revenue.
That helped lift the mid-cap FTSE 250 by 0.2 percent.
Haleon lost 3.8 percent as the world’s biggest standalone consumer health business reported first-quarter profit below analyst expectations.
Luxury carmaker Aston Martin Lagonda lost 2.2 percent after it reported a narrower quarterly pre-tax loss and maintained its 2023 outlook.
