UK stocks erased their early gains to close lower on Wednesday as investors awaited an update from the Fed due later in the day regarding the outlook for the US economy. In contrast, sentiment in European markets was helped by a much stronger than expected ZEW survey in Germany which showed investors were more positive than thought on the prospects for a global economic recovery At 4.35pm the benchmark FTSE 100 index was down 7 points at 6,078, led lower by supermarket groups Sainsbury and Tesco and industrials Melrose and Roll-Royce. The FSTE 250 mid-cap index closed marginally higher, up 9 points to 17,824 thanks to gains in Dixons Carphone, Energean, National Express and Royal Mail. E-commerce company The Hut Group was the day's star performer after raising £1.88 billion via an initial public offer. Shares in the company, which were offered at 500p giving it an initial market capitalisation of £5.4 billion, closed up 25% at 625p. Employment background verification company ClearStar was another big climber, rising 14% to 37p on news that it had accepted a £14.7 million takeover from a Hanover Investors pitched at 40p a share. Cafe, bar, and restaurant operator Loungers jumped 13% to 173p, even as it reported wider annual losses as government-imposed lockdowns forced the company to halt operations. Loungers said that since reopening its sites, performance had rebounded with like-for-like sales growing 30% from 4 July to 13 September. Iron deficiency focused Shield Therapeutics firmed 12% to 118p as it swung to a first-half profit on the back of a large jump in revenue. Construction firm Galliford Try gained 3.5% to 91p, as it reported narrower losses and suggested it could resume dividends in the not-too-distant future. Galliford Try said it would revive payouts when it returned to profit, which it said it was expecting to happen in the current financial year through June. Commercial vehicle rental group Redde Northgate gained 3.2% to 228p despite a fall in annual profit and a cut to its dividend, partly owing to one-off merger costs and pressure on revenue from the Covid-19 pandemic. Redde Northgate said that in first four months of the new financial year, performance indicators across the company had substantially improved or fully recovered. House builder Redrow gave up 1.75% to 448p after posting a slump in full-year profit and scrapping its final dividend due to the Covid crisis. However, the company predicted that based on trading to date and its forward order book, it expected to resume dividend payments in 2021. Professional services group RBG slumped 14.4% to 62p after it decided to postpone a decision regarding any dividend until the end of the year when it said it would have greater visibility in the outlook. Notwithstanding, results for the first half were strong especially given the absence of investment gains and the business was running 'flat out' according to the chief executive.
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