London’s FTSE 100 shook off a stronger pound and a robust UK services inflation reading to register its first rise of the week on Wednesday, as investors also digested the latest King’s speech, with new Prime Minister Keir Starmer getting his feet firmly under the table at Number 10.
A stronger pound is usually a headwind for the international earner-heavy blue-chip index, though some share price rises for heavyweights and a recovery for water utilities and Burberry helped it register a climb.
Stocks in mainland Europe failed to register a similar gain, while tech shares in New York tumbled.
The FTSE 100 index ended up 22.56 points, 0.3%, at 8,187.46. The FTSE 250 ended down 120.45 points, or 0.6%, at 21,093.34, and the AIM All-Share ended down just 0.18 of a point at 786.80.
The Cboe UK 100 ended up 0.3% at 817.66, although the Cboe UK 250 lost 0.5% at 18,380.00, and the Cboe Small Companies was up 0.7% at 17,289.68.
In European equities on Wednesday, the CAC 40 in Paris declined 0.1% and the DAX 40 in Frankfurt lost 0.4%.
In New York, the Dow Jones Industrial Average was up 0.4%, though the S&P 500 was down 1.2% and the Nasdaq Composite slumped to sit 2.4% lower at the time of the London close.
Eyes on Thursday will be on the European Central Bank, which announces its latest interest rate decision at 1315 BST.
It is expected to leave its benchmark rates unchanged, though focus will be on whether President Christine Lagarde leaves any clues about a September rate cut.
In the UK, Labour presented a ‘packed’ legislative agenda in the annual King’s Speech, focused on improving living standards by driving economic growth, the first of the UK prime minister’s five ‘missions for national renewal’.
Of the many measures proposed, Labour revived plans to phase out smoking, introduced a planned weapons crackdown, outlined changes to employment rights, as well as new regulations for water companies.
Prime Minister Keir Starmer set out plans to tear up planning red tape, reform the economy and restore trust in politics in a sweeping set of changes.
The speech, delivered in the House of Lords by the King with all the traditional pomp and pageantry, includes many of the policies championed in Labour’s manifesto.
Charles told the gathered peers and MPs the government’s programme would be ‘based upon the principles of security, fairness and opportunity for all’, adding that his ministers would ‘get Britain building’.
The Planning & Infrastructure bill will reform the system to help meet the goal of building 1.5 million more homes over the course of the Parliament, deciding ‘how, not if’ properties are built.
Residential landlord Grainger welcomed the planning and rent reform policies.
‘The proposals set out in the King’s Speech to speed up housing delivery, particularly through reform of the planning system, are welcome and will give housing providers, such as Grainger, greater certainty to invest and build homes across the country,’ Chief Executive Officer Helen Gordon said.
Grainger shares ended 0.8% lower, as for some London listings, the government measures were overshadowed by UK inflation data.
Developer Henry Boot shot up 7.3%, boosted by the measures, though among large-caps, housebuilder Barratt fell 1.2%, and peers Taylor Wimpey and Vistry lost 0.7% and 1.0% as the UK data put the Bank of England in the spotlight.
According to the Office for National Statistics, the rate of yearly consumer price growth was unchanged at 2.0% in June. The same rate was registered in May, fading from 2.3% in April. The latest reading was in line with the FXStreet-cited consensus.
The latest data showed services inflation was unmoved at 5.7%, however, when some had hoped it would to decline.
‘Headline CPI printed at 2.0% in June, with services sticker than expected driven predominantly by hotel prices, and core goods in outright deflation.
‘The details of the print mean we retain our call for an August cut, but the upside surprise makes tomorrow’s labour market data crucial,’ Barclays analysts commented.
The pound was quoted at $1.3008 at late on Wednesday afternoon in London, higher compared to $1.2957 at the equities close on Tuesday. It hit a one-year against the greenback on Wednesday.
The euro stood at $1.0934, up against $1.0884. Against the yen, the dollar was trading at JP¥156.60, down compared to JP¥158.57.
Back in London, there were some broad-based gains in the FTSE 100, helping it outperform. Luxury retailer Burberry rose 4.4%, while Severn Trent advanced 1.9%. Both had struggled on Tuesday.
Brewer Diageo and lender Barclays were among some of the index heavyweights to rise, adding 1.2% and 1.5%.
Genus plunged 11% as it said tepid demand continued in some nations.
The Basingstoke, England-based animal genetics biotechnology company said it expects to report an adjusted pretax profit within the company-compiled analyst consensus range of £58 million and £61 million for the year that ended June 30.
Genus said: ‘In China, the porcine market continues to be challenging, although the most efficient producers are now achieving positive margins as feed costs have declined... China’s enhanced commercial focus and superior genetics have continued to drive further new royalty customer wins.’
Genus added that its ABS cattle genetic solutions business improved profit in constant currency as a result of action taken under the company’s ‘value acceleration programme’.
The programme made changes to the organisation’s leadership structure, improved the integration and simplification of supply chains, as well as targeted pricing initiatives and cost efficiencies.
‘[In the second half] weak demand persisted in several countries, most notably China and Brazil, impacting its adjusted operating profits. This shortfall in ABS adjusted operating profits was offset by the realisation of early savings,’ Genus said.
Brent oil was quoted at $84.80 a barrel on Wednesday, up from $83.89 at the same time on Tuesday. Gold was quoted at $2,464.08 an ounce, up against $2,463.64.
Thursday’s economic calendar has a UK unemployment reading at 0700 BST before the ECB decision in the afternoon. The latest US initial jobless claims reading is at 1330 BST.
The local corporate calendar has a trading statement from miner Anglo American and furniture retailer Dunelm.
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