Blue chip stock prices in London, Paris and Frankfurt were comfortably in the green at Wednesday midday, with Lloyds up after it received higher price targets from Deutsche Bank Research and Barclays.
In UK news, the defence secretary has suggested the real-terms increase in defence spending year-on-year will be only around half the £13.4 billion figure cited by the prime minister.
John Healey said in real terms, the figure ‘would be something over £6 billion’ and claimed the ‘definition of defence numbers can be done in different ways’.
The commitment to increase spending comes ahead of the prime minister flying to Washington to meet US President Donald Trump, who has repeatedly called for European nations to increase the amount they are putting into defence budgets.
The FTSE 100 index was up 57.14 points, 0.7%, at 8,725.81. The FTSE 250 was up 182.13 points, 0.9%, at 20,630.41, and the AIM All-Share was up 4.78 points, 0.7%, at 712.84.
The Cboe UK 100 was up 0.7% at 873.24, the Cboe UK 250 was up 1.0% at 17,984.57, and the Cboe Small Companies was down 0.1% at 15,846.82.
‘The FTSE 100 made a strong start to trading on Wednesday, lifted by gains for banks and mining stocks,’ AJ Bell’s Russ Mould commented.
Convatec continued to lead the FTSE 100, up 7.4% following the release of its 2024 results.
Hiscox came second, gaining 3.8% despite looking set to be replaced in the large-cap index by soft drink bottler Coca-Cola Europacific Partners.
Lloyds Banking was third, up 3.6%.
Deutsche Bank Research and Barclays raised their price targets for the lender, to 88 pence from 80p and to 90p from 80p respectively. DBR maintained a ’buy’ rating for Lloyds, and Barclays maintained an ’overweight’ one.
Aston Martin was the biggest FTSE 250 loser, dropping 13%.
The Warwickshire, England-based luxury car maker swung to a pretax loss of £60.2 million in the quarter to December. For 2024 as a whole, the pretax loss widened to £289.1 million, while revenue fell 3.1% to £1.58 billion.
Aston Martin said total wholesale volume growth in 2025 would be a mid-single-digit percentage, compared to consensus for 20% plus growth. Also, it expects enhanced profitability and positive adjusted Ebit generation in 2025 and gross margin to improve to around 40%, below consensus for 42%.
‘Aston Martin’s latest numbers won’t get investors rolling down the windows and blasting out celebratory music,’ Mould said. ‘However, news of positive cash flow in the second half might give the company enough juice in the tank while new CEO Adrian Hallmark looks to deliver on his recovery plan.’
He added: ‘Aston Martin is engaged in a round of cost cutting, but it will need more than ‘efficiencies‘ if it is to get its share price motoring again.’
Hammerson was the second-worst performer, losing 3.6%.
Hammerson recommended a final dividend of 8.07 pence for 2024, up 3.4% on-year and bringing the total payout to 15.63p, 4.2% higher than 15.00p in 2023.
The shopping centre-focused real estate investment trust also said its pretax loss narrowed to £42.3 million. However, annual gross rental income was £189 million, down 9.1% from £208 million, while revenue dropped 9.8% to £121.1 million from £134.3 million.
In smaller caps, Cleantech Lithium lost 6.3%.
The Chile-focused lithium explorer announced that it now expects its Australian Securities Exchange listing to launch in April, and to complete in May instead of in March or April as expected in February.
Also it said that Tony Esplin, nominated as CEO designate in November, ‘has reconsidered his position and, for personal reasons, will not be taking up his intended appointment as CEO’.
In European equities on Wednesday, the CAC 40 in Paris was up 1.2%, while the DAX 40 in Frankfurt was up 1.4%.
German employees saw the highest increase in real wages in at least 16 years last year, official figures showed on Wednesday, as salary rises coincided with a significant drop in inflation.
The Federal Statistical Office said real wages - the difference between nominal wage increases and inflation - were up 3.1% in 2024, the highest figure since the Wiesbaden-based agency started measuring the statistic in 2008.
Average gross wages increased by 5.4%, as major German employers negotiated new collective wage agreements and offered compensation payments to offset the effects of high inflation in the preceding two years.
After a wave of significant price hikes following the coronavirus pandemic and the Russian invasion of Ukraine, inflation fell to 2.2% in 2024, further easing the cost of living crisis.
In political news, Germany’s Social Democratic Party elected Lars Klingbeil as leader of its parliamentary group, cementing his position as the party seeks to recover from a historic election defeat to join Friedrich Merz’s conservatives in government.
With Merz having ruled out cooperation with the far-right Alternative for Germany, which came in second in Sunday’s vote, a two-way coalition with the SPD is seen as the country’s best hope for a stable government.
Meanwhile in the EU, the European Commission on Wednesday presented a set of measures to help energy-intensive industries cut emissions and to boost production of clean tech aimed at bolstering the EU’s flagging economy.
‘Today, Europe is making a bold business case for decarbonisation as a driver of prosperity, growth, and resilience,’ said European Commission Vice President Teresa Ribera.
The measures include an action plan for lower energy prices aimed at supporting the electrification of energy-intensive industries.
The pound was quoted lower at $1.2648 at midday on Wednesday in London, compared to $1.2653 at the equities close on Tuesday. The euro stood lower at $1.0492, against $1.0501. Against the yen, the dollar was trading higher at JP¥149.55 compared to JP¥148.84.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.3%, the S&P 500 index up 0.5%, and the Nasdaq Composite up 0.8%.
‘The big news awaiting the markets later today is the quarterly earnings report from Nvidia,’ Mould said. ‘Such is its weighting and its importance to the all-pervasive AI theme, the results could have a significant impact on market sentiment.’
Brent oil was quoted lower at $72.44 a barrel at midday in London on Wednesday from $72.86 late Tuesday.
Gold was quoted higher at $2,914.91 an ounce against $2,895.74.
Still to come on Wednesday’s economic calendar, the US has new home sales and EIA crude oil stocks.
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