London - Britain's top share index steadied near a 14-year high in thin trade on Wednesday as investors held fire before UK data later in the day and Thursday's European Central Bank's policy meeting.
The blue-chip FTSE 100 index was flat at 6,837.28 points by 10:04 SA time, not far from a recent peak of 6,894.88, the
highest since late 1999 when it set a record high of 6,950.60.
Trading volumes were just 7 percent of the 90-day daily average in the first hour of trading.
Investors looked to the Markit/CIPS services purchasing managers' index figures, due at 10:30 SA time, for near-term
direction.
The index is expected to have eased to 58.2 in May from 58.7 in April, holding well above the 50 threshold that
separates growth from contraction.
“Today's service sector PMI data is likely to confirm that Western economies are still expanding and that the growth story
is, by and large, intact,” Jeremy Batstone-Carr, head of private client research at Charles Stanley, said.
“Clearly investors are awaiting key developments over the next few days and as a consequence volumes are very thin. Weak
regional inflation data out of the euro zone seems certain to force the ECB's hand, although nobody knows exactly what form of
(policy) easing will be announced.”
The UK stock market has traded in a narrow range in the past sessions as investors shield themselves from any disappointment
from the ECB, which is expected to trim its refinancing rate, send its deposit rate below zero and launch a long-term refinancing operation targeted at businesses.
The market's focus will also be on the Queen's Speech later in the day which marks the formal start of Britain's parliamentary year and sets out the government's agenda.
Among individual stocks, Mondi rose 2 percent to 1,096 pence, with traders pointing to a price target of 1,325 pence by Jefferies in a positive note, while Tesco gained 0.8 percent after a trading update.
Tesco, Britain's biggest retailer, saw the worst quarterly drop in underlying sales in its home market since chief executive Phil Clarke took over in 2011.
But the numbers were better than some analysts had feared.
“The shares are enjoying a brief respite after an update which provided weak like-for-like sales numbers, yet not quite as poor as had been feared,” Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said in a note. - Reuters