|
The FTSE 100 closed at a new record on Wednesday, following news of the US and Japan’s trade deal which also boded well for Japanese and European car manufacturers. The FTSE 100 index closed up 37.68 points, 0.4%, at 9,061.49, a record closing peak. It had earlier hit a new all-time high of 9,080.09. The FTSE 250 closed up 79.23 points, 0.4%, at 22,013.49 and the AIM All-Share closed up 3.85 points, 0.5%, at 773.99. The Cboe UK 100 ended up 0.5% at 904.40, the Cboe UK 250 rose 0.4% to 19,332.94, while the Cboe Small Companies closed down slightly at 17,683.08. In European equities on Wednesday, the CAC 40 in Paris advanced 1.5%, while the DAX 40 in Frankfurt gained 0.8%. In New York, the Dow Jones Industrial Average was up 0.4%, the S&P 500 traded 0.3% higher and the Nasdaq Composite firmed 0.2%. Late Tuesday, President Donald Trump said that the US has agreed on a ‘massive’ trade deal with Japan that would include a 15% tariff on its exports. Trump had previously threatened Japan, a major US trading partner, with a tariff of 25% beginning August 1 if a deal was not reached. ‘We just completed a massive Deal with Japan, perhaps the largest Deal ever made,’ Trump announced on his Truth Social platform. Under the deal, ‘Japan will invest, at my direction, $550 Billion Dollars into the US, which will receive 90% of the Profits,’ Trump wrote. Japan Prime Minister Shigeru Ishiba was more circumspect, stating that he needed to examine the deal before commenting. ‘As for what to make of the outcome of the negotiations, I am not able to discuss it until after we carefully examine the details of the negotiations and the agreement,’ Ishiba told reporters in Tokyo after Trump’s announcement in Washington. The deal comes after Ishiba faced a bruising weekend election that left his coalition without a majority in the upper house. ‘The trade agreement is undoubtedly good news for Japan,’ commented Kathleen Brooks at XTB. ‘The auto component is by far the biggest coup for Japan, as that makes up the bulk of exports to the US. ‘By lowering the auto tariff rate to 15% - auto tariffs were a flat 25% rate before the exemption for Japan - it is giving hope that those countries who have yet to agree tariff rates with the US can seal good deals if they pledge investment into the US,’ Brooks added. The trade pact sent equities soaring in Asia with the Nikkei 225 closing up 3.5% on Wednesday and the Hang Seng in Hong Kong gaining 1.6%. Carmakers such as Toyota climbed 14% on Wednesday, and Honda jumped 11%. Mitsubishi rose a more modest 3.6%. European car makers rose, with BMW, Mercedes-Benz Group and Volkswagen up 4.4%, 5.9% and 5.3%, respectively, in Frankfurt. Renault was up 2.6% in Paris, and Citroen and Fiat owner Stellantis was up 8.9% in Milan. In London, luxury car maker Aston Martin Lagonda rose 8.1%. Deutsche Bank’s Jim Reid said the Japan deal has ‘significantly raised hopes that the EU might also be able to reach a trade deal, as they’ve been threatened with 30% tariffs on August 1.’ Attention across the pond will also be on tech earnings with results from Tesla and Alphabet due after the closing bell in New York. The pound rose to $1.3571 late on Wednesday afternoon in London, compared to $1.3508 at the equities close on Tuesday. The euro traded at $1.1737, slightly up against $1.1735. Against the yen, the dollar was trading lower at JP¥146.33 compared to JP¥146.49. On the FTSE 100, Informa rose 5.3%. It raised its full-year outlook and added to its share buyback after reporting 20% growth in half-year sales and adjusted profit. The London-based international events, digital services, and academic publishing business increased full-year underlying revenue growth guidance to at least 6% from at least 5%, including 8% plus in Live B2B Events. The dividend was increased by 9.4% to 7.0 pence from 6.4p. In addition, Informa said it would buy back a further £150 million of shares through the second half of 2025, taking the total commitment to £350 million in 2025. On the FTSE 250, Breedon tumbled 7.3% as it forecast that full-year profit will be at the low end of market expectations. The Leicestershire, England-based building materials company said that given the ‘difficult’ first half and the macroeconomic headwinds, ‘we now expect our result for the full year will be at the low end of the current range of market expectations.’ Breedon put the range for 2025 earnings before interest, tax, depreciation and amortisation between £291.4 million to £311.5 million, growth of at least 19% from £245.8 million in 2024. Elsewhere, Halfords rose 2.9% as Panmure Liberum upgraded it to ’buy’ from ’hold’ with a 200p share price target. The broker noted ‘evidence of tangible green shoots’ and said recent trading is beginning to point to a fundamental improvement at Halfords rather than a one-off performance. ‘However, given previous false dawns, investors may require further evidence before declaring a new era,’ Panmure Liberum added. The yield on the US 10-year Treasury was quoted at 4.38%, stretched from 4.34%. The yield on the US 30-year Treasury was quoted at 4.94%, widened from 4.91%. The biggest risers on the FTSE 100 were Informa, up 40.80 pence, at 866.80p, JD Sports Fashion, up 3.98p at 89.78p, AstraZeneca, up 322.00p at 10,674.00p, Ashtead, up 122.00p at 4,857.00p and Croda International, up 62.00p at 2,879.00p. The biggest fallers on the FTSE 100 were Centrica, down 5.35p at 158.75p, SSE, down 58.00p at 1,912.00p, United Utilities, down 28.50p at 1,138.50p, Severn Trent, down 66.00p at 2,717.00p and National Grid, down 22.00p at 1,062.50p. Brent oil was quoted lower at $68.24 a barrel in London on Wednesday, from $68.30 late Tuesday. Gold eased to $3,412.38 an ounce against $3,426.29. Thursday’s local corporate calendar sees half-year results from lender Lloyds Banking Group and consumer products group Reckitt Benckiser and trading statements from miner Anglo American and telecommunication providers BT and Vodafone. The global economic calendar on Thursday has the eurozone interest rate decision, Canadian retail sales data, US initial weekly jobless claims figures, plus a slew of flash composite PMI reports. Copyright 2025 Alliance News Ltd. All Rights Reserved.
|
