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Stocks in London closed mostly lower on Thursday amid a weaker sterling after figures showed the US economy grew at a stronger than expected pace in the second quarter, meanwhile the 10-year bond yield in the UK firmed amid chatter of a political challenge to Prime Minister Keir Starmer. The FTSE 100 index closed down 36.45 points, 0.4%, at 9,213.98. The FTSE 250 ended 102.75 points lower, 0.5%, at 21,587.77, and the AIM All-Share ended down 8.80 points, 1.1%, at 773.62. The Cboe UK 100 was down 0.5% at 922.69, the Cboe UK 250 ended 0.8% lower at 18,862.12, and the Cboe Small Companies fell 0.4% at 17,499.23. Figures showed the US economy grew at a stronger pace than expected in the second quarter of the year, according to the latest reading from the Bureau of Economic Analysis, amid a rise in consumer spending. US gross domestic product rose 3.8% quarter-on-quarter on an annualised basis in the three months to June, upwardly revised from a 3.3% rise previously reported. The first quarter saw the US economy shrink 0.5%. Meanwhile, a report from the US Labor Department showed initial claims for state unemployment benefits dropped by 14,000 to a seasonally adjusted 218,000 in the week ending September 20, more than had been expected, allaying some fears that the jobs market is cooling. Separate figures showed durable goods orders were also stronger than expected. ‘Ultimately the updated GDP figures suggest the US economy was undeniably resilient in the first half of the year despite the on-again off-again approach to US trade policy,’ analysts at Wells Fargo said. ‘While resilient growth is somewhat hard to square with the rapidly slowing jobs market, it perhaps is best explained by the no hire, no fire dynamic playing out today,’ the broker added. Kathleen Brooks, research director at XTB, said the better-than-expected US GDP data ‘leads to questions about whether the Fed needs to cut rates further.’ In response, the dollar climbed and bond yields firmed. The pound was quoted lower at $1.3348 at the time of the London equity market close on Thursday, compared to $1.3452 on Wednesday. The euro stood at $1.1676, lower against $1.1740. Against the yen, the dollar was trading at JP¥149.74, higher compared to JP¥148.75. The yield on the US 10-year Treasury was quoted at 4.20% stretched from 4.14% on Wednesday. The yield on the US 30-year Treasury stood at 4.78%, widened from 4.76%. In European equities on Thursday, the CAC 40 in Paris closed down 0.4%, while the DAX 40 in Frankfurt ended 0.6% lower. Stocks in New York were lower at the time of the London close. The Dow Jones Industrial Average was down 0.3%, the S&P 500 index was 0.6% lower, as was the Nasdaq Composite. In London, the 10-year bond yield firmed to 4.77% from 4.70% on Wednesday, amid chatter of a political challenge to Prime Minister Keir Starmer. Andy Burnham, the mayor of Manchester, said he had been approached by a number of Labour MPs about replacing Starmer and said the UK should not be ‘in hock’ to bond markets as he pledged to borrow money to build council houses alongside a mass nationalisation programme. But Mark Dowding, chief investment officer for fixed income at RBC BlueBay Asset Management, told the Financial Times: ‘I think this speaks to his own financial naivety. Market confidence would sour very quickly. Yields would rise and the pound would also likely be under pressure.’ Brooks at XTB agreed. ‘The problem with Burnham’s rhetoric is that the UK government needs to be very aware of the bond market, because we have a budget deficit, which has been exacerbated by Labour’s current spending plans. His agenda could widen the deficit and push up borrowing costs even more, which is why bond yields are rising,’ she observed. On the FTSE 100, Halma rose 1.0% as it struck an optimistic tone in a trading statement, lifting revenue expectations for the full-year. Halma now expects to deliver low double-digit percentage organic constant currency revenue growth for the full year to March 31 after previously guided growth in the upper single-digit percentage range. Analysts at Citi said the statement represents ‘encouraging progress’ and ‘points to the upside’. The investment bank said it is anticipating an around 3% to 4% upgrade to consensus expectations for revenue. In the debit column, Phoenix Group fell 5.4% as it traded ex-dividend, while ConvaTec dipped 5.6% after the US government launched investigations into imports from the medical devices sector. The US administration, under Section 232, has initiated an investigation to ‘determine the effects on the national security of imports of personal protective equipment, medical consumables, and medical equipment.’ On the FTSE 250, Petershill Partners leapt 34% as it announced plans to return funds to shareholders and delist its shares from the London Stock Exchange. The FTSE 250-listing, founded by Goldman Sachs in 2007, said it had concluded that the company’s share price and valuation has not ‘appropriately reflected the quality and underlying value of the company’s assets, its strong financial performance and attractive growth prospects.’ As a result, the company intends to return, including a dividend, the equivalent of 313 pence per share to investors, or £3.4 billion. Meanwhile, Upper Crust owner SSP advanced 7.0% after a report suggested an activist investor is trying to stir takeover interest in the firm. The Financial Times said Irenic Capital Management, an activist hedge fund, is trying to rustle up interest in a take-private deal for SSP after boosting its stake in the firm. The FT noted Irenic’s approach at SSP has similarities with an activist campaign it launched in 2023 at Wagamama owner the Restaurant Group, which resulted in a £506 million sale to private equity group Apollo Management. Brent oil advanced to $69.15 a barrel on Thursday from $68.94 late Wednesday. Gold ebbed to $3,729.67 an ounce on Thursday, down against $3,750.05 on Wednesday. The biggest risers on the FTSE 100 were Rio Tinto, up 168.00 pence to 4,916.00p, 3i, up 76.00p at 3,947.00p, Entain, up 14.40p at 888.40p, Beazley, up 12.00p at 860.50p, and Smiths Group, up 26.00p at 2,290.00p. The biggest fallers on the FTSE 100 were ConvaTec, down 13.20p at 221.20p, Phoenix Group, down 35.50p at 623.00p, AstraZeneca, down 254.00p at 10,956.00p, Barclays, down 8.70p at 376.35p and DCC, down 104.00p at 4,714.00p. Friday’s global economic calendar has Canadian GDP data, US personal consumption expenditures figurers and the Michigan consumer sentiment index. Friday’s UK corporate calendar has half year results from life sciences company Ondine Biomedical and London-based miner and marketer of coloured gemstones, Gemfields Group. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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