By Shashwat Awasthi
(Reuters) - London's main index dipped slightly on Wednesday as investor anxiety after the U.S. Federal Reserve tampered expectations of interest rate cuts was compounded by Washington's ambiguous signals on trade negotiations with China.
The FTSE 100 edged down 0.1% on uncertainty over global trade remained after President Donald Trump called a potential agreement with China "absolutely possible", but also said he was happy with where things currently stood.
The mid-cap FTSE 250 tipped 0.2% lower as the pound was pressured by persisting 'no-deal' Brexit fears.
Investors were already disappointed by comments from Federal Reserve officials on Tuesday tempering expectations for aggressive monetary easing at its next meeting.
Bets that the Fed would ease policy have put the FTSE 100 on course for its best month since January, counteracting effects of U.S. sanctions on Iran and uncertainty ahead of the Trump-Xi showpiece at the G20 summit.
"We're pleased that the macro (situation) has been stabilised thanks to central banks, but that doesn't mean we are suddenly serene about putting our foot on the accelerator in equities," said Guillaume Lasserre, chief investment officer at Lyxor Asset Management.
The Fed officials' comments lifted the dollar from a three-month low, which weighed on gold prices, pushing precious metals miner Fresnillo down 2%.
Oil majors Shell and BP helped the main index outperform its European peers, however, as a decline in U.S. crude stockpiles and U.S.-Iran worries supported prices. [O/R]
The index of miners rose for the fifth straight session as copper prices advanced after U.S. Treasury Secretary Steve Mnuchin said a U.S.-China trade deal was "90% complete".
On the mid-cap index, oilfield services provider Wood Group climbed 6.6% on its best day in seven months after it forecast higher half-year operating profit.
Peer Petrofac surged nearly 15%, recovering all of its losses from the previous day when it flagged that it lost out on $10 billion in contracts amid an ongoing probe into its dealings in Saudi Arabia and Iraq.
Small-cap professional services company RPS plummeted 35% to a more than 10-1/2 year low after warning of "materially" lower annual results.
(Reporting by Shashwat Awasthi in Bengaluru; Editing by Bernard Orr and Emelia Sithole-Matarise)