|
Stocks in London were mixed on Wednesday morning, as investors await UK composite purchasing managers’ index and eurozone producer price index inflation data, after Japanese government bond yields hit a record high. The FTSE 100 index opened up 12.66 points, 0.1%, at 9,129.35. The FTSE 250 was down 21.42 points, 0.1%, at 21,141.47, and the AIM All-Share was up 1.04 points, 0.1%, at 766.61. The Cboe UK 100 was up 0.4% at 916.23, the Cboe UK 250 was down 0.3% at 18,481.96, and the Cboe Small Companies was up 0.1% at 17,058.45. In European equities on Wednesday, the CAC 40 in Paris and the DAX 40 in Frankfurt both gained 0.3%. ‘September didn’t start on a positive note for global markets. Market sentiment was less than cheery as the US returned from its long weekend, and the selloff in long-maturity bonds in developed markets accelerated,’ commented Swissquote analyst Ipek Ozkardeskaya. ‘The US 30-year yield flirted with the 5% psychological mark, Japan’s 30-year yield pushed toward multi-decade highs, while the UK’s 30-year gilt yield climbed to levels not seen since 1998. In France, the 30-year yield spiked to 4.5% for the first time since 2009, and the spread between German and French 10-year yields widened beyond 80bp highlighting mounting concerns around France’s budget standoff, where Bayrou’s budget plans face stiff political resistance.’ Japanese government bond yields hit a record high on Wednesday, following rises in the US and Europe on the back of concerns about political uncertainty and public finances. The yield on 30-year bonds reached 3.290%, the highest on record. The yield also rose on Japanese debt of other maturities. Japan has one of the highest ratios of debt to gross domestic product, GDP, of advanced economies. Japan’s sale of 30-year debt on Thursday will be closely watched by investors around the world given the recent history of ructions in Tokyo spilling over into other markets, Bloomberg News reported. Meanwhile, opponents of Prime Minister Shigeru Ishiba in Japan’s ruling party sought on Wednesday to rally support for a new leadership election, with several party heavyweights reportedly turning on the embattled premier. The yield on the US 10-year Treasury was quoted at 4.30%, stretching from 4.28%. The yield on the US 30-year Treasury was quoted at 4.99%, widening from 4.98%. In the US on Tuesday, Wall Street ended lower, with the Dow Jones Industrial Average slipping 0.6%, the S&P 500 fading 0.7% and the Nasdaq Composite losing 0.8%. In Asia on Wednesday, the Nikkei 225 index in Tokyo lost 0.9%. In China, the Shanghai Composite shed 1.2%, while the Hang Seng index in Hong Kong was 0.7% lower. The S&P/ASX 200 in Sydney closed down 1.8%. Swissquote’s Ozkardeskaya continued: ‘The selloff in long-duration bonds is fueled by several factors: concerns over ballooning sovereign debt, political hurdles to fiscal tightening (France is a case in point), and structurally higher inflation pressures following the Covid disruptions and the ongoing trade war. ‘Investors are demanding higher returns to hold bonds exposed to both inflation risk and elevated debt levels. Higher yields, in turn, push up borrowing costs for companies and weigh on valuations. As a result, equities and corporate bonds also kicked off the week on a weak note.’ The pound was quoted down at $1.3353 early on Wednesday in London, compared to $1.3389 at the equities close on Tuesday. The euro stood lower at $1.1624, against $1.1659. Against the yen, the dollar was trading up at JP¥148.81 compared to JP¥148.20. Hilton Food tumbled 15% at London’s market open. The Huntingdon, England-based food packaging company reported pretax profit of £24.3 million for the 26 weeks that ended June 29, falling 4.7% from £25.5 million in the 26 weeks to June 30, 2024. Revenue grew 7.6% to £2.09 billion from £1.94 billion, while administrative expenses increased 5.0% to £157.8 million from £150.3 million. Hilton Foods declared an interim dividend of 10.1 pence, up 5.2% on-year from 9.6p. Looking ahead, Hilton Foods expects full-year results in line with a company-compiled consensus for £76.8 million to £81 million in adjusted pretax profit. This would be up from £76.1 million in 2024 and £66.0 million in 2023. At the other end, Watches of Switzerland gained 6.6%. The Leicester, England-based watch and jewellery retailer said it was on track to deliver a ‘good’ first half in line with its expectations, for the 18 weeks that ended August 31. ‘We have seen consistently strong trading throughout the period, particularly in the US despite the announcement of increased tariffs on Swiss imports,’ the company said. ‘The stability we saw in the UK luxury watch and jewellery markets during [the first half of financial 2025] has continued, and we have delivered good year on year growth.’ Watches of Switzerland in July said it expected constant currency revenue growth of 6% to 10% for financial 2026. The firm predicted It predicts an adjusted earnings before interest and tax margin percentage of flat to down 100 basis points versus 11.6% in the financial year to April 30, 2024. Jangada Mines jumped 39%. The natural resources development company with interests in Brazil said exploration work has now begun at its Paranaita gold project, following its recent capital raise. The firm aims to validate the existing gold resource of around 210,000 ounces of gold a year at the project. Brent oil was quoted down at $68.74 a barrel early in London on Wednesday from $68.81 late Tuesday. Gold continued to climb, quoted up at $3,535.41 an ounce against $3,511.91. The yellow metal hit a new record of $3,546.96 early on Wednesday morning. Still to come on Wednesday’s economic calendar, a slew of composite PMI readings, US factory goods orders data and the release of the Federal Reserve’s Beige Book. Copyright 2025 Alliance News Ltd. All Rights Reserved.
|
