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London-listed equities began Thursday lower, as the cost effects of conflict in the Middle East clouded Sainsbury’s earnings, while data showed that UK public sector borrowing in March hit its lowest level since 2022. The FTSE 100 index opened down 39.06 points, 0.4%, at 10,437.40. The FTSE 250 was down 138.58 points, 0.6%, at 22,833.43, and the AIM all-share was down 2.03 points, 0.3%, at 806.09. The Cboe UK 100 was down 0.4% at 1,039.78, the Cboe UK 250 was 0.8% lower at 19,906.76, and the Cboe small companies was down 0.2% at 18,340.16. In European equities on Thursday, the CAC 40 in Paris was up 0.6%, while the DAX 40 in Frankfurt fell 0.3%. Sterling was at $1.3487 on Thursday morning, down from $1.3506 at the London equities close on Wednesday. Against the euro, sterling was little changed at €1.1526 from €1.1525. The euro was a little lower at $1.1701 from $1.1722. Against the yen, the dollar was higher at JP¥159.62 versus JP¥159.39. Uncertainty in the Middle East weighed on stocks, as the price of oil climbed higher. Brent oil was trading higher at $102.69 a barrel on Thursday morning from $101.42 on Wednesday. As a result, shares in oil majors Shell and BP were up 0.7% and 0.4% respectively. Iran said it would not reopen the Strait of Hormuz as long as the US naval blockade remained in place, calling it a ‘blatant violation’ of the ceasefire between the longtime foes. Iran’s Revolutionary Guards meanwhile said their naval forces had seized two container ships trying to cross the strategic strait, a move US President Donald Trump does not consider to be a ceasefire violation because the vessels are not American or Israeli, the White House said. Swissquote analyst Ipek Ozkardeskaya said: ‘One pattern is clear today: tech-heavy indices and energy are outperforming other sectors, as the global economic outlook deteriorates due to higher energy prices. Further upside is possible for crude oil, but gains will likely remain short-lived, as at these levels demand typically slows enough to cap further upside. So far, $120 per barrel has acted as a strong resistance to bullish moves.’ Back in the UK, public sector borrowing fell last month to the lowest figure for March since 2022, official numbers showed. According to the Office for National Statistics, net borrowing by the UK government amounted to £12.61 billion in March, narrowed from £13.98 billion a year earlier and less than £12.82 billion in February. Borrowing was higher than the FXStreet-cited market consensus of £10.4 billion, however. Even so, it was the lowest March borrowing figure since 2022, when borrowing was £5.54 billion. Borrowing in the financial year that ended in March was initially estimated at £132.0 billion. This was 13% less than £151.2 billion in the financial year to March 2025 and £700 million less than the £132.7 billion forecast by the Office for Budget Responsibility. In Asia on Thursday, the Nikkei 225 in Tokyo was down 0.8%. In China, the Shanghai Composite was 0.3% lower, while the Hang Seng Index in Hong Kong lost 1.0%. The S&P/ASX 200 in Sydney was 0.6% lower. In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.7%, the S&P 500 1.1% higher and the Nasdaq Composite gained 1.6% The yield on the US 10-year Treasury was quoted at 4.31% on Thursday, widened from 4.29% on Wednesday. The yield on the US 30-year Treasury advanced to 4.91% from 4.89%. Back in London, shares in J Sainsbury were down 5.3% as it reported underlying pretax profit below expectations, and warned of a potential hit to future profit from the war in the Middle East. The grocer said pretax profit from continuing operations rose to £619 million in the 12 months to the end of February from £607 million a year earlier. Revenue excluding VAT but including fuel climbed 2.7% to £33.65 billion from £32.77 billion. Underlying pretax profit rose 1.3% to £718 million from £709 million, below the company-compiled consensus of £730 million. Retail underlying operating profit fell in line with expectations by 1.1% to £1.03 billion, due to ‘significant operating cost inflation’ and ‘investment in value in a more competitive market’. The company declared a full year dividend of 13.7p, up 0.7% from 13.6p a year prior, but below consensus expectations for a dividend of 13.9p. Looking ahead, the company said it has made a positive start to the new financial year, with grocery volume growth ahead of the market. It expects underlying operating profit between £975 million and £1.08 billion. For financial 2026, it reported total underlying operating profit of £1.03 billion, up 1.1% from £1.01 billion. The company warns that the duration and extent of impacts from the conflict in the Middle East is ‘very uncertain’, which is reflected in its profit guidance. ‘We will do everything we can to support our customers and colleagues over the coming months, with absolute focus on keeping prices low,’ said Chief Executive Simon Roberts. On the FTSE 250 index, shares in WH Smith sank 11% as it reported a wider loss for the first half of the year and suspended its dividend. The Swindon, England-based travel retail operator said its pretax loss widened to £25 million in the half year to February from a restated £4 million loss a year prior. Headline profit before tax and non-underlying items fell 86% to £3 million from £21 million. The firm suspended its dividend, compared to an 11.3p interim dividend a year ago, to ‘reduce debt’ and strengthen its financial position. WH Smith said it is taking a more cautious outlook for the rest of the year due to the impact from the conflict in the Middle East on passenger numbers and consumer confidence. It now expects to deliver financial 2026 headline group profit before tax and non-underlying items between £90 million and £105 million, down from £108 million last year. It initially guided for a figure between £100 million and £115 million for financial 2026. On the AIM market, shares in RWS jumped 15%. The language services and artificial intelligence solutions provider said revenue for the six months to the end of March rose 5% to £360 million, or 7% on an organic constant currency basis. It expects adjusted pretax profit of £24 million for the first half, up 33% from £18 million a year prior. The company forecasts its financial 2026 performance to be in line with market expectations and existing guidance, with low single digit revenue growth on an organic constant currency basis and improving profitability. Gold was lower at $4,717.50 an ounce early on Thursday from $4,734.05 late Wednesday. Still to come on Thursday’s economic calendar are a slew of flash composite PMI reports including the UK at 0930 BST. Weekly jobless claims numbers will also be released in the US. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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