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Stock prices in London were up on Tuesday midday as defence stocks traded higher following the appointment of former Defence secretary John Healey as UK chancellor; meanwhile mining stocks enjoyed a boost from a higher gold price. The FTSE 100 index was up 25.35 points, 0.2%, at 10,550.11. The FTSE 250 was up 115.60 points, 0.5%, at 23,656.31, and the AIM all-share was up 4.78 points, 0.6%, at 762.67. The Cboe UK 100 was up 0.1% at 1,049.15, the Cboe UK 250 was up 0.7% at 20,535.12, and the Cboe small companies was marginally lower at 18,394.39. Dan Coatsworth, head of markets at AJ Bell, said Healey is ‘seen as a safe pair of hands’. ‘Burnham has wasted no time in laying out initiatives to change the country and benefit the public, including the removal of VAT on household electricity bills...but Healey knows bond markets won’t allow him to make other tax cuts without saying how they’ll be paid for,’ Coatsworth said. ‘Bond markets take no prisoners, and they will be quick to protest if government policies are viewed as irresponsible.’ AJ Bell’s Senior Pensions & Savings Expert Charlene Young, meanwhile, highlighted the UK public sector net borrowing figures. The UK borrowed £15.99 billion in June, down 33% year-on-year and down from £20.00 billion in May, which was revised downwards from £23.29 billion. ‘A sharp drop in public sector borrowing gives new chancellor John Healey a welcome tailwind on his first full day in the job, Young says. ’The government is adding less to its debt pile, which eases some of the immediate pressure on the public finances. But it’s important not to overstate the improvement. ‘Much of the reduction reflects lower inflation-linked debt interest costs rather than a fundamental transformation in the health of the UK’s finances. Borrowing over the first three months of the financial year was £2.7 billion more than the OBR’s forecast and still among the highest levels seen since records began...ongoing pressure on public services and the need to support long-term economic growth mean the underlying challenges facing the public finances have not gone away.’ As for unemployment, ING’s Developed Markets Economist James Smith commented: ‘What’s striking about the latest UK jobs numbers is just how much the picture varies by sector. Overall, the backdrop looks stable unemployment is unchanged at 4.9%, payroll employment is flat, and vacancies are levelling out. ‘But as has been the case throughout this year, the government is performing a lot better than the private sector. Public sector payroll numbers are up 0.7% so far this year, where the private sector is down 0.5% including a further decline through June.’ Smith particularly highlighted the difficulties facing consumer-facing industries, noting that ‘the private sector is experiencing wage growth below 3%. That’s down from 6% just 18 months ago and is below the level that the Bank of England thinks is consistent with achieving a 2% inflation target over the medium-term. ‘This is a key factor in our call for the Bank of England to keep rates on hold this year, unless things get materially worse in the energy market. ‘Just as we saw with the rise in headline inflation 12 months ago, the weaker jobs market should mitigate the risk of second-round effects and a long-lasting bout of price pressure.’ Back on the FTSE 100, Babcock International led the FTSE 100, up 6.0%. Among other defence stocks, BAE Systems rose 2.5%, and Rolls-Royce gained 1.8%. ‘UK defence stocks motored higher on Healey’s appointment, given his previous role in pushing Keir Starmer to agree to higher defence spending,’ Coatsworth said. ‘The market is taking the view that defence is close to Healey’s heart, and he will drive through increased funding under his new role as chancellor.’ Gold stocks also rose, with Antofagasta the second-biggest winner, up 4.1%. Endeavour was up 2.9%, Glencore 2.8% and Fresnillo 2.7%. Gold was quoted higher on Tuesday at $4,067.47 an ounce, against $4,011.08. Mitie continued to lead the FTSE 250, up 39% after accepting a £3.1 billion takeover deal. Rosebank came second, up 13% after releasing a positive trading update. In a trading update covering the six months to June 30, Rosebank said MW Components has performed strongly with each of the three businesses growing ahead of pre-acquisition expectations. The industrial company investor expects full-year adjusted operating profit and EPS to be ahead of the company-compiled consensus, which forecasts adjusted operating profit at $294 million for 2026 and $452 million for 2027. Metro Bank rose 2.0%, after Sky News reported that the retail and commercial banker is exploring a £2 billion merger with Aldermore. Sky said Metro Bank is in the early stages of assessing whether to submit a formal bid for Aldermore, citing City sources. It added that no decision has yet been made and an offer is not certain. Aldermore, which specialises in mortgages and business lending, was put up for sale in April by its owner, FirstRand, which at the time expected the UK motor finance mis-selling scandal to cost it around £750 million in compensation. In European equities on Tuesday, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt was up 0.5%. Investor sentiment in the eurozone shattered expectations in July, survey data from ZEW showed. The ZEW indicator of economic expectations for the eurozone rose to plus 23.4 points in July from plus 9.5 points in June. It easily beat the FXStreet-cited market consensus of a weaker improvement to plus 11.2 points in July. The indicator of the current economic situation remained negative but ameliorated to minus 37.7 points in July from minus 43.4 points in June. The ZEW indicator of economic expectations in Germany surged to plus 26.3 points in July from plus 10.5 points in June, better than the consensus of a rise to 18.0 points. The pound was quoted flat at $1.3418 midday on Tuesday. Against the euro, sterling softened to €1.1742 from €1.1755 a day prior. The UK 10-year gilt narrowed to 5.02% from 5.04%. The 30-year gilt yield was 5.74%, narrowed from 5.76%. The euro stood lower at $1.1423, against $1.1441. Against the yen, the dollar was trading higher at JP¥162.69 compared to JP¥162.56. Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.4%, the S&P 500 index up 0.5%, and the Nasdaq Composite up 1.4%. The yield on the US 10-year Treasury was quoted at 4.60%, widening from 4.59%. The yield on the US 30-year Treasury was quoted at 5.12%, widening from 5.11%. Brent oil was quoted higher at $89.65 a barrel at midday in London on Tuesday from $88.07 late Monday. Still to come on Tuesday’s economic calendar, the US has the latest ADP employment report. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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