London’s blue chip index performed weaker than its peers in Paris and Frankfurt on Wednesday morning, while Asian stocks climbed after Japan asked the US for an exemption on tariffs on steel and aluminium.
A bright light on the London market was Barratt Redrow. The housebuilder surged on lofty profit guidance.
The FTSE 100 index traded up just 1.87 points at 8,779.26. The FTSE 250 was 82.05 points, 0.4%, at 21,001.77, and the AIM All-Share rose 1.28 points, 0.2%, at 723.26.
The Cboe UK 100 was flat at 879.44, the Cboe UK 250 was 0.6% higher at 18,367.57, and the Cboe Small Companies was up 0.4% at 11,056.14.
In European equities the CAC 40 in Paris and the DAX 40 in Frankfurt each added 0.2%. The blue-chip benchmark in Frankfurt stretched further above the 22,000 point mark, to sit around a record high.
The pound was quoted at $1.2454 early Wednesday, perking up from $1.2421 at the time of the London equities close on Tuesday. The euro climbed to $1.0373 from $1.0349. Against the yen, the dollar surged to JP¥153.57 from JP¥152.31.
In focus on Wednesday is a US inflation reading due at 1330 GMT. Wednesday’s data is expected to show the pace of annual US consumer price inflation was unmoved at 2.9% at the start of the year.
‘Markets have been getting slightly more concerned in recent days as to where inflation will be next year. We’ll know a little more about the near term direction of travel today with US CPI out later. Ahead of that bonds have continued to sell off from their 2025 yield lows seen last week. There were a few catalysts yesterday but comments from Fed Chair Powell, who said that ’we do not need to be in a hurry to adjust our policy stance‘ were a factor even if that’s what we expected him to say. But on top of that, a fresh rise in energy prices and the prospect of retaliatory tariffs from the EU led to anxiety that inflation would keep lingering above target for some time.
‘This backdrop makes it an interesting day to get the US CPI print for January, which will offer the first big clue on inflation in 2025. Today’s report is getting a decent amount of attention, in part because last January’s report saw a strong upside surprise, so the fear is we could get another new year uptick that upsets market expectations for the Fed to still cut this year. That’s particularly the case because recent data has leant in a more hawkish direction, with the 3m annualised rate of CPI already running at 3.9% in December, whilst the 6m rate was at 3.0%.’
The Hang Seng Index in Hong Kong jumped 2.6%. The Shanghai Composite rose 0.9%. Sydney’s S&P/ASX 200 ended 0.6% higher.
In Tokyo, the Nikkei 225 added 0.4%.
Japan asked the US on Wednesday to be exempt from President Donald Trump’s tariffs on steel and aluminium exports, Tokyo’s top government spokesman said.
Trump has signed executive orders to impose 25% tariffs on imports of steel and aluminium starting March 12, triggering angry reactions internationally including from Canada, Mexico, and the EU.
‘We are aware of the presidential order about additional tariffs on steel and aluminium were issued... we have requested to the US government to exclude our country from the measures,’ Yoshimasa Hayashi told reporters.
The request was made through the Japanese embassy in the US early Wednesday, he said.
The UK government’s budget spending plans are expected to provide a ‘temporary boost’ to economic growth although this could be dragged by Trump tariffs, an economic think tank has said.
Inflation is also predicted to have accelerated at the start of this year, putting continued pressure on budgets, according to the National Institute of Economic & Social Research, Niesr.
In its quarterly economic outlook report, Niesr said it was projecting that the UK economy would grow by 1.5% this year, lifting its previous forecast of 1.2%.
It said the growth would be driven mainly by the increased spending programme announced in the October budget, which it expected would have a ‘tangible effect’ throughout the year.
But economists at the organisation said this was likely to ‘only be a temporary boost’ for growth.
In London, shares in Barratt Redrow shot up 7.4%. It said it was pleased by its outturn for the half-year to December 29.
The housebuilder now expects full year adjusted profit before tax will be towards the upper end of market expectations.
Barratt Redrow puts adjusted pretax profit consensus at £542 million, with a range between £506 million to £588 million.
Edison analyst Andy Murphy commented: ‘The company is benefitting from a more stable economic and lending environment, but the housing market remains sensitive to broader conditions. Nevertheless, with its scale and strong track record, Barratt Redrow is well positioned to capitalise on underlying demand and drive long-term growth.’
Close Brothers Group fell 1.2%. The merchant bank said it has set aside £165 million after the merchant bank reviewed its provision assessment in relation to an ongoing motor finance matter
Close Brothers said: ‘The group has been reviewing its accounting assessment of these matters, as previously stated. As a result, the group anticipates that it will recognise a provision in the H1 2025 financial statements in relation to motor commissions of up to £165 million. This includes estimates for certain potential operational and legal costs, as well as estimates for potential remediation for affected customers.’
Molten Ventures climbed 4.7%. The tech-focused venture capital firm committed an additional £15 million to the ongoing £5 million share repurchase programme ahead of an investor day on Wednesday.
Chief Executive Officer Ben Wilkinson said: ‘The board’s commitment today to expand the share repurchase programme is in further recognition of the discount to asset value at which we are trading and takes advantage of the significant returns we have generated from realisations this year. Our strong capital position allows us to do this while retaining firepower to invest at a promising time for value creation.’
Molten Ventures said it would not pursue equity fundraises for the foreseeable future due to the realisation profile of its portfolio, but aims to preserve a strong balance sheet to allow it ‘to quickly capture opportunities and be active in the marketplace’.
The CEO said Molten would refocus on its ‘core business’ of Series A and B investments.
Wilkinson said: ‘We have realised over £150 million this financial year bringing our total realisations to over £640 million. We are focused on portfolio development and facilitating a pipeline of realisations, which puts us in a fantastic position to continue investing through cycles to create strong vintage performance.
‘We are well positioned to take advantage of the current need for more investment at Series B in Europe and my strategic priorities aim to deploy our experienced investment team and strong financial position to the best effect possible, while always exercising discipline in capital allocation.’
A barrel of Brent fell to $76.27 early Wednesday, from $76.81 at the London equities close on Tuesday. Gold faded to $2,893.11 an ounce from $2,906.30.
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