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The FTSE 100’s advance eased going into Wednesday afternoon, as a weaker Brent price hit oil majors, but the mood in equity markets remained optimistic on a growing expectation that the Federal Reserve will cut rates next month. The FTSE 100 index inched up 4.87 points, 0.1%, at 9,152.68. The FTSE 250 added 46.46 points, 0.2%, at 21,889.15, and the AIM All-Share rose 0.55 of a point, 0.1%, at 759.82. The Cboe UK 100 was up 0.1% at 916.68, the Cboe UK 250 also added 0.1% at 19,283.09, and the Cboe Small Companies was down 0.2% at 17,057.80. In European equities on Wednesday, the CAC 40 in Paris was up 0.4%, while the DAX 40 in Frankfurt was 0.8% higher. ‘We’ve had some seasonal buying in the early part of August, but I think people are too quick to assume this is the start of a sustained summer rally,’ deVere analyst Nigel Green commented. ‘The rally followed an inflation reading that came in below expectations, easing concerns that recent tariffs were accelerating consumer prices. Futures markets now place a 94% probability on a September rate cut, with some traders betting on a 50 basis-point move after US Treasury Secretary Scott Bessent urged the Fed to consider a more aggressive reduction.’ Following Tuesday’s data, which showed the pace of US consumer price inflation undershot expectations by being steady at 2.7% in July, US President Donald Trump once again called for a rate cut. ‘Jerome ’Too Late’ Powell must NOW lower the rate,’ Trump said on social media. ‘The damage he has done by always being Too Late is incalculable. Fortunately, the economy is sooo good that we’ve blown through Powell and the complacent board.’ Trump said Tuesday he might allow ‘a major lawsuit against’ the US central bank chief to proceed, as he complained again about renovations to the Federal Reserve headquarters and renewed pressure to lower interest rates. The pound rose to $1.3572 early Wednesday afternoon, from $1.3509 late Tuesday. The euro climbed to $1.1720 from $1.1682. Against the yen, the dollar slipped to JP¥147.34 from JP¥147.83. Swissquote analyst Ipek Ozkardeskaya commented: ‘Yesterday’s UK jobs data came in significantly stronger than expected, and combined with rising inflation pressures, fuelled expectations that the Bank of England will hold off on a November rate cut. That more-dovish Fed/more-hawkish BoE combination should support cable and bring 1.38 back into play in the coming weeks.’ The yield on the 10-year US Treasury narrowed to 4.25% on Wednesday from 4.30% at the time of the London equities close on Tuesday. The 30-year yield eased to 4.84% from 4.89%. In New York, the Dow Jones Industrial Average is called up 0.3%, the S&P 500 0.2% higher and the Nasdaq Composite up 0.3%. In London, some of the FTSE 100’s largest constituents were on the decline, keeping a lid on the blue-chip benchmark’s progress. Shell and BP fell 0.8% and 1.6% as oil prices declined. A barrel of Brent fell to $65.69 early Wednesday afternoon, from $66.29 at the time of the London equities close on Tuesday. The International Energy Agency, IEA, has further trimmed its forecast for crude oil demand this year, citing softer global economic growth and market uncertainties. For 2025, the association of industrialized nations now expects demand to rise by only 680,000 barrels per day, according to the monthly report released in Paris on Wednesday. The previous forecast had anticipated an increase of 700,000 barrels. XTB analyst Kathleen Brooks commented: ‘The peak of the supply glut will be at the end of 2026, according to the IEA, which could keep a lid on the oil price for the long term. ‘The discussions between President Trump and President Putin on Friday could also be weighing on the oil price. If they do find a solution to the war in Ukraine, then it could exacerbate the supply glut even further, and the bias could be to the downside for the oil price as we lead up to the talks. For the FTSE 100, this means that big hitters like Shell and BP could come under further downward pressure.’ HSBC and Standard Chartered were down 0.2% and 1.3%. The Asia-focused lenders surrendered some progress made in the run-up and subsequent confirmation of a US-China trade truce being extended. Legal & General fell 1.1% after JPMorgan cut the stock to ’neutral’ from ’overweight’. Among mid-caps, Watches of Switzerland shed 3.5% after Kepler reduced it to ’hold’ from ’buy’. Housebuilders were largely weaker in the wake of half-year results from Persimmon. Persimmon fell 2.5%. Persimmon reported a rise in first half profit and it maintained its completions outlook for the full year. In the six months to June 30, pretax profit edged up 0.3% to £146.7 million from £146.3 million. Revenue improved 14% to £1.50 billion from £1.32 billion. Broker Davy said Persimmon’s activity has been ‘soft generally through the year’. It expects there to be ‘downward pressure’ on forecasts for 2025 and 2026. Persimmon itself said it currently expects volumes to grow to around 12,000 units in 2026. Davy said the volumes guide is below current expectations of 12,208. Davy also noted that Persimmon expects margin progress for next year to be similar to 2025. ‘On our calculations, this implies a 30-90bps cut to expectations in FY26, and overall we may see a 4-5% cut to FY26 expectations from this guidance,’ Davy added. Elsewhere in London, Shoe Zone slumped 19%. It said it has suffered ‘challenging trading conditions’ with consumer spend under pressure following last year’s UK budget. The retailer now expected adjusted pretax profit for the year to September 27 of around £2.5 million, its forecast halved from £5.0 million. ‘We have seen less discretionary spend, with the continued impact of inflation, interest rates and higher savings rates, all of which have decreased footfall, with a resultant reduction in revenue and profit,’ Shoe Zone added. Gold rose to $3,365.96 an ounce midday Wednesday, from $3,355.98 at the time of the London equities close on Tuesday. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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