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London’s blue chip index underperformed against European peers early Wednesday, but the star of the show was the CAC 40, rising more than 2% on a sharp share price surge for luxury goods firm LVMH and an easing of political uncertainty in France. Elsewhere, the pound was back above the $1.33 mark as the dollar lost ground following remarks by the US central bank chief. The UK chancellor, meanwhile, suggested tax hikes could be considered at next month’s budget. The FTSE 100 index was down 5.06 points, 0.1%, at 9,447.71. The FTSE 250 was 96.95 points higher, 0.4%, at 22,125.13, and the AIM All-Share was up 3.67 points, 0.5%, at 793.23. The Cboe UK 100 was flat at 944.73, the Cboe UK 250 was 0.4% higher at 19,378.20, and the Cboe Small Companies was 0.3% higher at 17,751.88. Sterling rose to $1.3355 on Wednesday morning, from $1.3294 at the time of the London equities close on Tuesday. The euro climbed to $1.1639 from $1.1591. Against the yen, the dollar retreated to JP¥151.15 from JP¥151.83. The yield on the 10-year US Treasury narrowed to 4.01% from 4.05%. The 30-year yield slimmed to 4.61% from 4.64%. Federal Reserve Chair Jerome Powell warned that the risks to employment have risen in recent months, noting a sharp slowdown in job creation. ‘While the unemployment rate remained low through August, payroll gains have slowed sharply, likely in part due to a decline in labour force growth due to lower immigration and labour force participation,’ he told a conference in Philadelphia, according to prepared remarks. Powell also hinted that the Fed could soon stop reducing the size of its balance sheet, which ballooned in the early days of the Covid-19 pandemic as the US central bank piled into Treasuries and mortgage-backed securities to support the economy. ‘Our long-stated plan is to stop balance sheet runoff when reserves are somewhat above the level we judge consistent with ample reserve conditions,’ he said. ‘We may approach that point in coming months.’ Deutsche Bank analysts commented: ‘It was Fed Chair Powell who provided a big offset to the trade fears, as he struck a more dovish tone than expected. The main headline was a surprise discussion around ending the shrinking of its balance sheet in the coming months. While our rates strategists suggest this timeline could be deliberately vague, it puts December on the map in terms of a halt. Indeed, recent history suggests ’coming months’ with regards to balance sheet changes has resulted in action within 2-3 months. There wasn’t much new on rates and the economy but there was no pushback to a cut later this month and the labour market commentary leant in a dovish direction as well.’ In Paris, the CAC 40 powered 2.4% higher and the DAX 40 in Frankfurt added 0.1%. Political developments in France, and a report from LVMH, supported the Paris market. Analysts at ING commented: ‘French PM Lecornu managed to bring the Socialist Party on board and now stands a decent chance of surviving tomorrow‘s confidence vote and passing the budget.’ Surging in Paris, LVMH jumped 12%. Luxury peers Hermes and Kering added 6.4% and 7.1%. LVMH after the market close on Tuesday In the third quarter, LVMH said organic sales firmed 1%, with growth across all business groups and regions aside from Europe which saw sales hurt by declining tourist spending amid currency fluctuations. Third quarter organic sales firmed 1% in Wines and Spirits and declined 2% in Fashion and Leather Goods. Perfumes & Cosmetics and Watches & Jewelry sales rose 2%. Selective Retailing sales jumped 7%. Looking ahead, LVMH said despite uncertainty it ‘remains confident and will maintain a strategy focused on continuously enhancing the desirability of its brands, drawing on the authenticity and quality of its products, excellence in retail and agile organization.’ In London, Burberry rose in a positive read across, rising 6.6%, It was the best FTSE 100 performer. Elsewhere in London, Pets at Home added 3.6%, among the best FTSE 250 performers, while CVS Group added 6.8%. The UK’s competition watchdog proposed ‘major reforms’ for the £6.3 billion veterinary services market, to ‘enable pet owners to choose the right vet, the right treatment, and the right way to purchase medicine’. The Competition & Markets Authority believes pet owners are ‘often unaware of the prices of commonly used services and whether their local practices are part of large national chains’. Pet owners often receive no estimate for treatment and may over pay for cremations, the CMA added. ‘These factors are market wide and mean consumers do not benefit from strong competition between vet businesses. Average vet prices across the market rose by 63% between 2016 and 2023 - well above the rate of inflation,’ it explained. ‘In addition, the CMA has found that the current regulatory system is not fit for purpose. It only regulates individual veterinary professionals and not vet businesses, despite the majority of practices being part of a large corporate group.’ The CMA proposed that veterinary businesses should publish ‘comprehensive price lists’ and make it clear if they are part of a ‘large group’. The CMA added: ‘The CMA’s final decision will be published by March 2026. The reforms would be implemented through a legally binding CMA Order and could see some measures coming into force before the end of 2026. Small vet businesses will be given additional time for implementation.’ In the CMA’s list of ‘6 large veterinary groups’ are London-listed CVS Group and Pets at Home. CVS welcomed the ‘additional certainty’ from the CMA announcement. ‘We will be responding to the provisional decision and proposed remedies package in writing in due course and have a further hearing with the CMA in December 2025. We look forward to the publication of the final decision in March 2026 and conclusion of this market investigation promptly thereafter,’ it added. Six weeks before the budget, UK Chancellor Rachel Reeves acknowledged she was looking at potential tax rises and spending cuts to fill a black hole, which she said was partly due to the lingering impact of Brexit. The chancellor said ‘of course, we’re looking at tax and spending’ as she prepares for her November 26 statement. She confirmed the budget watchdog had ‘consistently overestimated’ the UK’s productivity, with the expected downgrade of its previous assumptions likely to make Reeves’ task even harder. With no boom in economic growth, stubbornly high inflation and the mounting costs of government debt, Reeves will have to fill a black hole estimated at around £50 billion by some economists. Reeves told Sky News the economy was still suffering from the impacts of leaving the EU, austerity policies and Liz Truss’s mini-budget. She said the Office for Budget Responsibility had carried out a review over the summer and found ‘they have consistently overestimated our productivity performance’. A barrel of Brent rose to $62.19 on Wednesday morning from $61.87 at the time of the London equities close on Tuesday. Gold surged to $4,207.88 an ounce, a new record high, from $4,141.29. In China, the Shanghai Composite rose 1.2%, while the Hang Seng Index in Hong Kong was up 2.0%. Tokyo’s Nikkei 225 shot up 1.8%, while the S&P/ASX 200 added 1.0%. The absence of a previously scheduled US inflation report, postponed to later this month due to the government shutdown, means attention turns elsewhere on Wednesday. ‘Central bank speakers include the Fed’s Miran, Waller and Schmid, the ECB’s de Guindos, Rehn and Villeroy, and the BoE’s Ramsden and Breeden. We’ll also get the Fed’s Beige Book, and the New York Fed’s Empire State manufacturing survey. Finally, earnings releases include Morgan Stanley and Bank of America,’ analysts at Deutsche Bank said. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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