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London’s blue chip index closed out Wednesday lower, dragged by defence stocks, as European peer the CAC 40 was lifted by LVMH. The FTSE 100 index closed down 28.02 points, 0.3%, at 9,424.75. The FTSE 250 ended just 7.22 points lower at 22,020.96, and the AIM All-Share dropped 2.14 points, 0.3%, to 787.42. The Cboe UK 100 ended down 0.1% at 943.83, the Cboe UK 250 closed slightly lower at 19292.50, while the Cboe Small Companies gained 0.8% at 17,839.51. Joshua Mahony, chief market analyst at Scope Markets, said the FTSE 100 was ‘weighed down’ by renewed fiscal concerns after the chancellor warned of significant tax rises and spending cuts that could go further than required to plug the public finance gap. ‘While such measures may reduce the risk of repeated tax hikes later in her tenure, they also raise fears of fresh pressure on UK growth,’ he said. Rachel Reeves told Sky News she is looking at both tax rises and spending cuts in the budget, in her first interview since being briefed on the scale of the fiscal black hole she faces. ‘Of course, we’re looking at tax and spending as well,’ the chancellor said when asked how she would deal with the country’s economic challenges in her November 26 statement. In better news for Reeves, bond yields continued recent falls, reducing government interest costs. The yield on the UK 10-year gilt stood at 4.53% on Wednesday, compared to around 4.72% a week ago. Kathleen Brooks at XTB said a growing downbeat narrative on the UK‘s growth outlook and expectations that Reeves could boost her fiscal headroom at the next budget are all driving this decline in yields. The pound was quoted higher at $1.3395 at the time of the London equity market close on Wednesday, compared to $1.3294 on Tuesday. The euro stood at $1.1635, higher compared to $1.1591. Against the yen, the dollar was trading at JP¥151.20, lower compared to JP¥151.83. London’s subdued showing compared to strong gains in New York and Paris, although Frankfurt also failed to fire. In European equities on Wednesday, the CAC 40 in Paris closed up 2.0%, while the DAX 40 in Frankfurt ended down 0.2%. Lifting the CAC 40, gains in luxury goods manufacturers which shot up after LVMH’s better-than-expected third quarter results, which analysts said bodes well for a better luxury reporting season. Late Tuesday, the Paris-based luxury brands holding company LVMH reported organic sales growth of 1% in the third quarter to September, defying expectations for a similar sized decline. ‘The third quarter saw an improvement across all business groups and all regions, with the exception of Europe, where revenue from tourist spending declined, affected by currency fluctuations, which weighed more on the quarter than earlier in the year,’ LVMH said in a statement. In response, shares in LVMH soared 12% in Paris. The feel good factor in the luxury sector saw Gucci owner Kering advance 5.2% and Hermes climb 6.9% in Paris. In London, Burberry was a prominent FTSE 100 riser, up 3.4%, albeit well below early highs. Deutsche Bank said investor hope is that LVMH, and potentially the wider luxury sector, has ‘turned the corner’. Stocks in New York were higher at the time of the London close. The Dow Jones Industrial Average was up 0.6%, the S&P 500 was 0.9% higher, while the Nasdaq Composite advanced 1.2% as hopes for rate cuts grew. The yield on the US 10-year Treasury was quoted at 4.02%, narrowed from 4.05% on Tuesday. The yield on the US 30-year Treasury stood at 4.61%, trimmed from 4.64% on Tuesday. Bank of America stormed 5.5% higher after strong third quarter results. The bank also guided full-year net interest income to the top-end of its prior range. Morgan Stanley did even better, climbing 6.6% after its numbers. Brooks at XTB said the earnings season in the US has got off to a good start. ‘So far, 39 out of the 500 companies listed on the S&P 500 have reported positive sales and growth surprises. Sales growth is higher by 7.9% and earnings growth by 14%, largely led by the finance sector,’ she noted. Back in London, Entain fell 2.4% with a lack of a guidance raise and ongoing fears of higher taxes on the gambling sector holding it back. Ladbrokes and Coral owner Entain said net gaming revenue rose 6% on-year, or 7% at constant currency, in the third quarter of 2025. Excluding the US, it rose 4%, or 5% at constant currency. Entain said this was despite a one to two percentage points impact year-on-year from adverse sports results in September. It noted a hit from ‘customer friendly sports margins’ last month. On a conference call after the trading statement, Entain finance chief Rob Wood said sports results ‘were unhelpful, but a little volatility is par for the course’. Without a margin hit to the tune of £20 million, however, a guidance hike could have been in the offing,‘ he added. Questioned about possible tax hikes, Chief Executive Stella David said: ’On UK tax, my primary goal right now is to make sure that we put our arguments forward, which is increasing taxation does not lead to increasing revenue for government.‘ Defence stocks also weighed with Babcock International down 3.2% and BAE Systems losing 2.7%. Elsewhere in London, Pets at Home added 1.6%, among the best FTSE 250 performers, while CVS Group added 0.7%. 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‘. Analysts at RBC Capital Markets said there were ’no surprises or worries‘ from the CMA’s provisional decision. ‘There continues to be no enforced asset divestment, and a continued preference to focus on improved transparency in order to build a more competitive marketplace for veterinary pharmaceuticals, rather than any major focus on pricing controls,’ the broker noted. ‘We think that today’s publication should finally remove the overhang from the sector,’ RBC added. Rising rate cut bets saw the price of gold climb once more, trading at $4,199.71 an ounce on Wednesday, up from $4,141.29 on Tuesday. Brent oil traded at $62.20 a barrel, up from $61.87 late Tuesday. The biggest risers on the FTSE 100 were WPP, up 12.20 pence at 352.20p, Burberry, up 39.00p at 1,200.00p, Pershing Square, up 134.00p at 4,670.00p, Pearson, up 24.00p at 1,089.00p and Ashtead, up 116.00p at 5,264.00p. The biggest fallers on the FTSE 100 were easyJet, down 20.50p at 480.70p, Babcock International, down 39.00p at 1,170.00p, BAE Systems, down 53.50p at 1,901.00p, Beazley, down 23.50p at 905.50p and Entain, down 20.40p at 819.00p. Thursday’s global economic diary has UK GDP and trade data and the Philadelphia Fed manufacturing index in the US. Thursday’s UK corporate calendar has a trading statement from speciality chemicals manufacturer Croda and half-year results from Premier Inn owner Whitbread. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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