Passengers walking through airport terminal
Shares in airports concessions operators jump 11% / Image source: Adobe

London’s blue chip index outperformed its European counterparts on Wednesday morning, as investors eagerly await another testimony from Federal Reserve Chair Jerome Powell.

The FTSE 100 index opened up 16.62 points, 0.2%, at 8,156.43. The FTSE 250 was up 50.64 points, 0.3%, at 20,695.66, and the AIM All-Share was up 1.15 points, 0.2%, at 773.09.

The Cboe UK 100 was up 0.3% at 813.09, the Cboe UK 250 was 0.4% higher at 17,979.96, and the Cboe Small Companies was up 0.1% at 17,089.67.

In Paris, the CAC 40 was down 0.2%, though the DAX 40 in Frankfurt rose 0.1%.

In New York on Tuesday, the Dow Jones Industrial Average ended down 0.1%, while both the S&P 500 and Nasdaq Composite edged up 0.1%.

For the S&P 500 it was the sixth straight day of gains, while the Nasdaq Composite notched another record close.

Fed Chair Jerome Powell’s words to US lawmakers on Tuesday were somewhat cautious, though kept alive hopes of a rate cut this year.

He said the US central bank is making ‘modest’ progress in its inflation fight.

Speaking in Congress, Powell told lawmakers on the Senate Banking Committee that the most recent readings ‘have shown some modest further progress’ since the first quarter of the year.

‘More good data would strengthen our confidence that inflation is moving sustainably toward 2%’ he added, according to prepared remarks.

Whether Thursday’s US inflation data will add to the Fed’s confidence remains to be seen.

‘Powell’s prepared remarks focused on two-way risks, reiterating the need for more data input to justify monetary easing. So, more of the same rhetoric, and we believe Powell is happy with keeping markets relatively quiet at this stage as some data starts to go in the right direction. We did read a still modestly dovish bias in Powell’s testimony, as he kept adding emphasis on the risks of unduly weakening activity and employment – but the strict data dependency,’ ING analyst Francesco Pesole commented.

In Wednesday’s economic calendar, Fed Chair Powell will be in focus again. He testifies at 1500 BST. Just before that, Bank of England Chief Economist Huw Pill speaks at 1430 BST.

The pound was quoted at $1.2801 early Wednesday, up from $1.2781 at the time of the London equities close on Tuesday. The euro stood at $1.0823, rising from $1.0810. Against the yen, the dollar was trading at JP¥161.38, down from JP¥161.46.

‘Aside from any more Powell headlines, there are no other major macro events in the US today. The US Democratic Party revolt against President Joe Biden appears to have been fully sidelined by markets. Predict index of Biden’s probability of being the party’s candidate in November has bounced back from 40% to 60% after recent signs that the internal push to replace him may indeed be insufficient,’ Pesole added.

In political developments concerning the UK, Prime Minister Keir Starmer will use the Nato summit to help ‘reset’ the UK’s relationship with European neighbours.

As is usual for Nato summits, the prime minister will be joined on the trip by the foreign secretary and defence secretary, but he is also taking Nick Thomas-Symonds, who has been given the newly-created job of minister for European relations.

Starmer’s administration wants to repair the damage to relations with Europe caused by the Brexit wrangles and strike a better deal with the EU than the ‘botched’ trade agreement signed by Boris Johnson.

Elsewhere, Starmer has said he is committed to spending 2.5% of GDP on defence, but that he could not set a timeline to reach the target before carrying out a review.

The new Chancellor Rachel Reeves, meanwhile, revealed plans for a new national wealth fund designed to attract billions in private sector investment to support UK growth.

Reeves on Tuesday met with a nine-strong National Wealth Fund Taskforce at Number 11, Downing Street in order to launch the plans.

The taskforce includes former Bank of England governor Mark Carney, Barclays Chief Executive Officer CS Venkatakrishnan and Aviva Chief Executive Amanda Blanc.

On the London Stock Exchange, Barratt Developments fell2.9% as it predicted an annual profit beat for the year just ended, but a decline in home completions for the one just begun.

Adjusted pretax profit in the year ended June 30 is ‘anticipated to be slightly ahead of our previous expectations’, it said. Total home completions landed at the upper end of guidance at 14,004, for the year, down from 17,206 the year prior.

Total forward sales at the end of the financial year amounted to 7,239 homes at a value of £1.91 billion, in line with expectations, but down from £2.22 billion on-year.

For the new year, it predicts total home completions in a range of 13,000 to 13,500.

Chief Executive David Thomas commented: ‘Whilst we continue to navigate a challenging macroeconomic backdrop, we are delivering industry leading build quality, sustainability and customer service. Combined with the strength of our balance sheet, this has ensured we remain resilient and responsive through the cycle. Looking ahead, we are pleased that the proposed combination with Redrow was strongly supported by both sets of shareholders in the spring and, subject to the CMA’s approval, we look forward to bringing together two businesses to create an exceptional UK housebuilder ensuring we are well-positioned for the future.’

SSP Group rose 11%. The travel food outlet operator said the second half of its financial year has ‘started well’ and confirmed its annual outlook.

Sales in the third quarter ended June 30 were up 15% on a year before, or 16% at constant currency rates, with like-for-like growth of 6%. For the first nine months of the financial year, which ends on September 30, revenue was up 15%, or 18% at constant exchange rates.

‘Led by an increasing demand for leisure travel, we have seen a strong sales performance across all regions,’ SSP said.


For the full-year, SSP backed its prior guidance, expecting like-for-like sales growth of between 6% and 10%. It expects annual revenue of £3.4 billion to £3.5 billion, underlying earnings before interest, tax, depreciation and amortisation of £345 million to £375 million, and underlying operating profit of £210 million to £235 million.

These results would compare with revenue of £3.01 billion, underlying Ebitda of £280 million and underlying operating profit of £164 million in financial 2023.

Gym Group climbed 3.3%. The gym operator said it has grown its membership, revenue and estate in the first six months of 2024.

Revenue is 12% higher at £112.1 million from £99.8 million a year earlier. Its membership numbers stand at 905,000 as at June 30, rising from 867,000 a year prior and 850,000 on December 31.

‘In H1 2024, the group opened four new gyms taking the total to 237, and we are in the fitout stage of the next four sites which will open shortly. We remain on track to open a total of 10-12 new gyms by the year end, as guided,’ it added.

Brent oil was quoted at $84.09 a barrel early Wednesday, down from $84.76 at the time of London equities close on Tuesday. Gold was quoted at $2,373.31 an ounce, up from $2,353.59.

In Asia on Wednesday, the Shanghai Composite ended down 0.7%, and the Hang Seng Index in Hong Kong was 0.2% lower. Tokyo’s Nikkei 225 closed up 0.6%, while the S&P/ASX 200 in Sydney fell 0.2%.

China consumer prices edged up in June, official data showed Wednesday, but fell short of analyst expectations as the country’s economic recovery continues to falter.

The consumer price index rose 0.2% on-year in June, easing from May’s 0.3% and the fifth straight month in positive territory, the National Bureau of Statistics said.

Bloomberg analysts had predicted a 0.4% inflation rate for June, however.

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Issue Date: 10 Jul 2024