Stocks in Europe remained higher at Thursday midday, as the European Central Bank is widely expected not to move interest rates, adopting a wait-and-see stance, while the EU believes a trade deal with the US is ‘within reach’.
The FTSE 100 index was up 83.71 points, 0.9%, at 9,145.20. The FTSE 250 was up 142.85 points, 0.7%, at 22,156.34, and the AIM All-Share was up 1.20 points, 0.2%, at 775.19.
The Cboe UK 100 was up 0.9% at 912.66, the Cboe UK 250 was up 0.8% at 19,491.82, and the Cboe Small Companies was down 0.5% at 17,599.03.
A weak growth trajectory and job cuts in the UK will add to pressure on the Bank of England to cut rates again in August, S&P Global Market Intelligence Chief Business Economist Chris Williamson said Thursday, as service sector growth was lower than expected in July.
The flash UK purchasing managers’ composite output index fell to 51.0 points in July from 52.0 in June, underperforming the FXStreet-cited market consensus of a milder slowdown to 51.9 in July. Getting closer to the neutral 50-point mark separating growth from contraction, it indicates the pace of growth slowed in July.
The flash UK services PMI business activity index declined to 51.2 points in July from 52.8 in June, against expectations of an improvement to 53.0 in July.
The pound was quoted lower at $1.3536 at midday on Thursday in London, compared to $1.3571 at the equities close on Wednesday. The euro stood higher at $1.1744, against $1.1737. Against the yen, the dollar was trading up at JP¥146.61 compared to JP¥146.33.
‘The euro held firm on Thursday, trading near multi-year highs as investors looked ahead to the European Central Bank’s decision later in the day. Traders remain attentive to the tone of the central bank governor and its impact on the market,’ commented Naga analyst Frank Walbaum.
‘Expectations that the ECB would hold its interest rates unchanged could also support yields and the euro. In this regard, ECB officials signalled a more cautious stance. Isabel Schnabel emphasized that the bar for additional rate cuts remains ’very high’, warning about potential inflationary effects from tariffs.’
In European equities on Thursday, the CAC 40 in Paris improved 0.2%, while the DAX 40 in Frankfurt gained 0.5%.
EU states on Thursday approved a €93 billion package of counter-tariffs on US goods that would kick in from August 7 if talks with the US fail, European diplomats said.
At the same time, the EU believes a trade deal with the US is ‘within reach’, a European Commission spokesman said on Thursday, after diplomats said the two sides appeared closer to an agreement.
‘As regards a deal as an outcome, we believe such an outcome is within reach,’ EU trade spokesman Olof Gill said. Diplomats said on Wednesday a US proposal with a baseline tariff rate of 15% is on the table.
US President Donald Trump blindsided the EU this month when he threatened a 30% levy on EU goods unless the two sides reach a trade deal by August 1.
Thursday’s list includes previously agreed levies on €21 billion of US goods, including soybeans. Added to that is a second list of €72 billion put forward by the European Commission this month, targeting dozens more products including US planes, cars and whisky.
Backed by 26 EU countries except Hungary, the counter-tariffs on the totality of the goods targeted would be up to 30%, European diplomats told AFP.
Meanwhile, Chinese President Xi Jinping said China and the EU must deepen trust in a turbulent world but the bloc’s chiefs called for ‘real solutions’ to move past an inflection point as they met in Beijing on Thursday.
China’s leadership has sought to draw the EU closer as it positions itself as a more reliable partner than the US and a bedrock of stability in a troubled world.
But the EU has made clear there are deep divisions over trade, fears that cheap, subsidised Chinese goods could overwhelm European markets and Beijing’s tacit support for Russia’s war against Ukraine.
Welcoming EU Commission head Ursula von der Leyen and European Council chief Antonio Costa at Beijing’s ornate Great Hall of the People, Xi said ‘the more severe and complex the international situation is, the more important it is for China and the EU to strengthen communication, increase mutual trust and deepen cooperation’.
In the context of that turmoil, Xi said, Chinese and European leaders must ‘make correct strategic choices’.
In London, Pebble Beach Systems was up 53% around midday.
The Surrey, England-based software company said its strategic plans announced in January, which included a ‘significant reduction’ in overhead and research and development costs, has resulted in an upgrade to its guidance, with the firm now expecting 2025 and 2026 profitability ‘materially ahead’ of market expectations.
Pebble Beach cited a company-compiled consensus for revenue of £11.5 million and adjusted earnings before interest, tax, depreciation and amortisation of £3.5 million for 2025 and 2026. This would be flat against 2024 revenue and up 6.1% from £3.3 million in 2024 adjusted Ebitda.
Pebble expects revenue of around £5.9 million for the six months that ended June 30, up 11% from £5.3 million, which was driven by the timing of project order intake, as well as ‘continued growth’ in SLA revenue, the company explained. First-half adjusted Ebitda for 2025 is now expected at around £2.0 million, rising 43% on-year from £1.4 million, with the adjusted Ebitda margin improving to 34% from 27%.
ITV was the leading riser on FTSE 250, up 10%.
The London-based media company said it expects a better full-year outcome, driven by cost efficiencies, after reporting first-half results ahead of market expectations.
ITV said pretax profit slumped to just £67 million in the six months to June 30 from £330 million a year prior. Group revenue fell 2.6% to £1.85 billion compared to £1.90 billion a year ago. Adjusted earnings before interest, tax, depreciation and amortisation fell 33% to £142 million from £212 million but comfortably beat the £117 million market consensus cited by UBS.
For 2025, ITV said it remains on track to deliver its target of total organic revenue growth of 5% on average per annum from 2021 to 2026 - ahead of the market, and at a margin of 13 to 15%.
Total advertising revenue is expected to be marginally down in the third quarter year-on-year reflecting the ‘tough’ comparative from the final knockout matches of the men’s Euros in July 2024.
Treatt sank 22%.
The Suffolk, England-based extracts and ingredients manufacturer lowered its guidance for the financial year ending September 30. This was due to a reduction in second-half sales, lower repeat customer volumes amid ‘competitive pressures’ and low US consumer confidence, and a weaker US dollar exchange rate that resulted in an around £500,000 profit headwind.
Treatt now expects revenue between £130 million and £135 million, against its prior forecast of £146 million to £153 million. Pretax profit before exceptional items is now anticipated at £9 million to £11 million, revised down from £16 million to £18 million. Second-half revenue is now expected at £66 million, compared to its prior £82 million guidance.
The firm reported £153.1 million in revenue and £19.1 million in pretax profit before exceptional items for financial 2024.
Looking ahead, Treatt said: ‘The sales pipeline has strengthened during the year, and we continue to be focused on revenue opportunities and better margins in FY 2026 and beyond.’
Stocks in New York were called mixed. The Dow Jones Industrial Average was called down 0.4%, the S&P 500 index slightly higher, and the Nasdaq Composite up 0.3%.
The yield on the US 10-year Treasury was quoted at 4.41%, widening from 4.34%. The yield on the US 30-year Treasury was quoted at 4.97%, stretching from 4.91%.
Brent oil was quoted higher at $69.17 a barrel at midday in London on Thursday from $68.24 late Wednesday. Gold was quoted lower at $3,362.72 an ounce against $3,412.38.
Still to come on Thursday’s economic calendar, an interest rate decision by the European Central Bank and US initial weekly jobless claims figures at 1330 BST.
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