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Stock prices in London were mostly lower on Thursday morning, with FTSE 250 constituent WH Smith seeing a share slump after it revealed an overstatement in expected headline trading profit for North America. UK report that public sector net borrowing totalled £1.05 billion in July, below the consensus estimate of £1.9 billion and ‘the lowest July borrowing for three years’. The FTSE 100 index opened up 8.59 points, 0.1%, at 9,296.73. The FTSE 250 was down 32.95 points, 0.2%, at 21,852.93, and the AIM All-Share was down 0.54 points, 0.1%, at 759.20. The Cboe UK 100 was up marginally at 931.63, the Cboe UK 250 was down 0.2% at 19,169.45, and the Cboe Small Companies was marginally lower at 17,114.13. Defence stocks BAE Systems and Rolls-Royce led the FTSE 100, up 1.5% and 1.3% respectively, while Melrose Industries gained 1.0% and Babcock was up 0.7%. On the FTSE 250, WH Smith dropped 32%. The retailer said a financial review had revealed an overstatement of around £30 million in expected headline trading profit for North America. It now expects the profit for the region to be around £25 million, compared with previous market guidance of about £55 million. On AIM, Image Scan fell 14%. The X-ray screening systems provider said it does not expect to meet current market guidance for the year ending September 30, due to ‘long lead times in the supply chain’. However it also announced ‘two new significant contract awards’, one in North America and the second from an Eastern European military organisation. In European equities on Thursday, the CAC 40 in Paris was down 0.2%, while the DAX 40 in Frankfurt was down 9.88 points. Switzerland’s trade surplus grew 3.6% to fr.4.33 billion, around $5.38 billion, in July from fr.4.18 billion in June, the Federal Office for Customs & Border Security reported. Exports fell 2.7% to fr.22.22 billion, while imports declined 4.2% to fr.17.90 billion. Exports to the US rose 1.1% to fr.4.02 billion from fr.3.98 billion in June, after a jump of 25% in June from fr.3.18 billion in May. The pound was quoted lower at $1.3450 early on Thursday in London, compared to $1.3468 at the equities close on Wednesday. The euro stood at $1.1648, lower against $1.1661. Against the yen, the dollar was trading higher at JP¥147.55 compared to JP¥147.15. In Asia on Thursday, the Nikkei 225 index in Tokyo was down 0.7%. In China, the Shanghai Composite was up 0.1%, while the Hang Seng index in Hong Kong was down 0.4%. The S&P/ASX 200 in Sydney closed up 1.1%. Taiwan’s government plans to increase its 2026 defence budget to more than three percent of GDP, the premier said, as it faces US pressure to invest more in its own protection. Premier Cho Jung-tai said the latest hike was ‘another concrete demonstration to the world and the people of Taiwan of our resolve and ability to safeguard national sovereignty and security’. Taiwan’s cabinet has allocated NT$949.5 billion, $31.1 billion, or 3.23% of GDP, for defence spending next year, Cho told a news conference, adding that overall expenditure for 2026 was budgeted at just over NT$3 trillion up NT$110 billion or around 3.8% from 2025. In the US on Wednesday, Wall Street ended mostly lower, with the Dow Jones Industrial Average up 16.04 points, the S&P 500 down 0.2% and the Nasdaq Composite down 0.7%. The yield on the US 10-year Treasury was quoted at 4.31%, widening from 4.29%. The yield on the US 30-year Treasury was quoted at 4.92%, widening from 4.90%. ‘Yesterday’s FOMC minutes further dampened investor mood and accelerated the equity selloff,’ Swissquote’s Ipek Ozkardeskaya said. ‘The minutes stated that Fed officials were worried about both weakening jobs data and inflation risks...officials remain inclined to prioritise inflation control by keeping monetary policy tight rather than cutting rates.’ She continued: ‘Yet, one caveat makes the minutes look less hawkish than they first appeared: this meeting was held before the release of the problematic July jobs report with big downside revisions that spooked investors and fueled expectations for a September cut. ‘Jerome Powell’s speech [at Jackson Hole] tomorrow could therefore strike a middle ground: acknowledging rising concern about the labour market, while underscoring that inflation remains a key risk to be addressed carefully.’ Ozkardeskaya predicted: ‘As such, the Federal Reserve (Fed) will probably announce a 25bp cut next month but stop short of signalling more’. Brent oil was quoted higher, at $67.33 a barrel early in London on Thursday from $66.70 late Wednesday. Ozkardeskaya noted that ‘Ukraine talks continue in the background, with Russia expressing willingness to join security talks with Western allies. Any lack of progress toward durable peace could revive oil bulls...The summer decline leaves room for a medium-term rebound: fading peace hopes could send prices back above $65pb.’ Gold was quoted at $3,340.85 an ounce, lower against $3,341.46. ‘Gold has been caught in a range of $3450 to $3220 since May and seems remarkably comfortable oscillating between these levels...what could shake some life into the gold market?’ queried Pepperstone’s Chris Weston. ‘I remain personally skewed towards the upside potential. The elephant in the room though is the credibility of the Federal Reserve, which is increasingly called into question...a worrying number of Fed policymakers [are] perceived as pliant to [US President Donald Trump] something that will inevitably erode confidence in USD-denominated assets.’ He added that ‘the risk is clear: if the Fed cuts in September...and if the US labour market shows renewed resilience, then ’credibility risk‘ becomes the buzzword and that is a major reason to own gold.’ Still to come on Thursday’s economic calendar, UK flash composite PMI is due at 0930 BST. US jobless figures and the US flash PMI will follow in the afternoon. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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