25th Jun 2025 07:47
(Alliance News) - London's FTSE 100 is called to open slightly higher, though looks set to fail the more confident advance seen on Wall Street overnight.
Sentiment stateside was boosted by hope of easing geopolitical tensions, with a ceasefire looking like it has stuck.
"What a difference a detente makes. With Iran and Israel apparently shelving their war games, markets hit the afterburners," SPI Asset Management analyst Stephen Innes commented.
Eyes were also on Federal Reserve Chair Jerome Powell, who told lawmakers Tuesday that the central bank can afford to wait for the impact of tariffs before deciding on further interest rate cuts.
Powell testified before the House Committee on Financial Services on Tuesday. He heads to the Senate on Wednesday.
In early UK corporate news, Babcock reported a rise in annual profit and announced its first-ever buyback. Warehouse REIT agreed to a takeover from Tritax Big Box, withdrawing its support for Blackstone offer.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: called up 0.1% at 8,764.39
----------
Hang Seng: up 1.1% at 24,447.37
Nikkei 225: up 0.3% at 38,913.21
S&P/ASX 200: up slightly at 8,559.20
----------
DJIA: closed up 507.24 points, 1.2%, at 43,089.02
S&P 500: closed up 1.1% at 6,092.18
Nasdaq Composite: closed up 1.4% at 19,912.53
----------
US 10-year Treasury yield: 4.29% (4.30%)
US 30-year Treasury yield: 4.83% (4.85%)
----------
EUR: lower at USD1.1616 (USD1.1621)
GBP: higher at USD1.3623 (USD1.3621)
USD: higher at JPY145.18 (JPY144.84)
GOLD: higher at USD3,329.83 per ounce (USD3,314.07)
OIL (Brent): lower at USD68.03 a barrel (USD68.08)
(changes since previous London equities close)
----------
ECONOMICS
----------
Wednesday's key economic events still to come:
UK Centre for Central Banking Studies Conference
15:00 BST US new home sales
15:30 BST US EIA crude oil stocks
----------
The governor of the Bank of England has said the unpredictability of world events including tariffs and conflict in the Middle East makes it hard to determine the outlook for the UK economy. Andrew Bailey said he viewed domestic issues as more important than global ones when it comes to setting interest rates. Speaking to MPs on the Lords Economic Affairs Committee, he said: "Focusing on the tariff issue… it is very unpredictable where this is all going to end up. "We are coming towards the end of the 90-day period that President Trump set out for reaching agreements. We've had one agreement so far which is with the UK – it obviously isn't implemented yet – and that is it at the moment. Bailey told the committee that he was not putting that much "weight" on global developments because of how volatile things are. "When I'm thinking about my decision on interest rates, because of the sheer unpredictability it's not that I'm ignoring the world – anything but," he said.
----------
BROKER RATING CHANGES
----------
Barclays cuts WPP to 'underweight' (equal weight) - price target 550 (700) pence
----------
COMPANIES - FTSE 100
----------
Babcock International said it stands to benefit from a "new era for defence", as it upped its medium-term ambitions, raised its dividend and announced a share buyback. The aerospace, defence and nuclear engineering services company reported pretax profit of GBP329.1 million in the year to March 31, surging 52% from GBP216.7 million. Revenue was 11% higher at GBP4.83 billion from GBP4.39 billion, growth it said was driven by Nuclear and Marine. At constant currency, Marine revenue increased 12%, Nuclear rose 19%, while Land increased 2%. Aviation revenue declined 4% at constant currency. "This is a new era for defence. There is increasing recognition of the need to invest in defence capability and energy security, both to safeguard populations and to drive economic growth. Our specialist capabilities are increasingly relevant and, with a growing set of opportunities before us, Babcock is committed to play its part in driving prosperity alongside its customers," Chief Executive Officer David Lockwood said. "Our strong financial performance in FY25, with operational momentum across the business, has enabled us to upgrade our medium-term guidance, increase our dividend and launch a GBP200 million share buyback programme for the first time in the company's history." Babcock said the GBP200 million will be completed in the new financial year. The firm raised its final dividend by 36% to 4.5 pence per share from 3.3p. It took the total dividend to 6.5p per share, a rise of 30% from 5.0p. Babcock said it expects to achieve its previous medium term target of underlying operating margin of 8% in financial 2026, "at least one year earlier than we anticipated". Its Underlying operating margin in the year just ended improved to 7.5% from 5.4%. Its new medium-term margin aim is "at least 9%". Its medium-term revenue ambition is for average growth of mid-single-digits.
----------
COMPANIES - FTSE 250
----------
Tritax Big Box REIT said it has reached a cash and shares deal to acquire Warehouse REIT. The deal values the industrial warehouse investor's entire issued, and to be issued shares at GBP485.2 million. Tritax Big Box will pay 47.2p in cash, plus 0.4236 of one of its own shares, for each share in Warehouse REIT. Based on Tritax Big Box's closing price on Tuesday, the deal puts a 114.2p value on each Warehouse REIT share. That would be a 4.8% premium to a prior 109p per share takeover proposal from Blackstone. Warehouse REIT had previously thrown its weight behind the GBP470 million Blackstone cash offer, but has now withdrawn that recommendation in favour of the bid by large logistics warehouses investor Tritax Big Box. Warehouse REIT said: "The Warehouse independent directors consider that the market risk inherent in BBOX's cash and shares offer is, as at the time of this announcement, offset by the material increase in value over the Blackstone offer. Furthermore, the Warehouse independent directors note that the offer is partially derisked by the cash component and that the share component allows Warehouse shareholders to remain invested in a larger, more liquid UK REIT which will benefit from significant scale, an improved cost of capital and structural tailwinds underpinning the rental growth prospects of the industrials sector."
----------
Residential landlord Grainger reported practical completion of a build to rent scheme in the Canning Town area of London. Seraphina Apartments, "the final piece" of the Fortunes Dock cluster, contains 132 build to rent homes. "This marks a significant milestone in the transformation of Fortunes Dock, Grainger's residential destination in East London, which now totals 412 homes across three schemes," Grainger said. "Following practical completion of the main build of Seraphina Apartments, fit out will now commence of the amenity spaces. Set to launch later this summer, Seraphina Apartments will provide high-quality rental homes in a thoughtfully designed setting, continuing the success of Grainger's established neighbouring schemes in Fortunes Dock."
----------
OTHER COMPANIES
----------
THG said it had a "much improved" second-quarter in its Beauty and Nutrition arms, returning to growth. The Manchester-based retail firm, behind brands such as Lookfantastic and Myprotein, expects a Beauty revenue decline between 2.0% and 3.0% in the second quarter of the year, following a 9.8% slide in the first. "Beauty retail, which comprises the vast majority of the Beauty business, traded resiliently with growth in the UK (the largest territory) at its highest rate since Q1 2024 supporting market share gains. The decision to withdraw from lower-margin Asia and European territories annualises in Q3, thereby neutralising the year-on-year revenue drag effect from that point onwards," THG said. Nutrition revenue in the quarter is expected to rise between 5.0% and 7.0%, after edging up 0.1% in the first quarter. THG said it has returned to group constant currency revenue growth during the period. THG added: "Whilst our direct exposure to tariffs is expected to be less than GBP1.0 million pre mitigating actions, we continue to monitor the changes to US trade policy and reciprocal actions for an adverse impact on raw material supply chains and US consumer sentiment."
----------
Liontrust Asset Management reported a decline in assets under management, but the level of outflows eased and the firm believes it can capitalise on a "new environment" in markets. Assets under management at the March 31 year end totalled GBP22.59 billion, a 19% decline from GBP27.82 billion a year prior, Net outflows amounted to GBP4.90 billion, easing from GBP6.08 billion in financial 2024. The asset manager swung to a pretax profit of GBP22.3 million from a loss of GBP579,000 the year prior. Revenue, however, declined 14% to GBP169.8 million from GBP197.9 million. CEO John Ions said: "We believe it will be more challenging for markets to generate the same level of returns in the next few years as over the past decade. This will lead to investors searching for alpha by moving away from passive vehicles to active asset managers, deeper within markets and on a more geographically diverse basis. These investment opportunities include generational low valuations among UK quality companies. Liontrust is well placed to take advantage of this new environment with our highly rated and independently recognised investment teams, high-profile brand, market leading client service, communications and marketing, and strong operations." Liontrust declared an unchanged second interim dividend of 50p per share, which keeps its annual dividend at 72p per share.
----------
Pots and pans seller ProCook said it "significantly" outperformed the market, reporting a rise in annual earnings. In the financial year ended March, pretax profit amounted to GBP1.2 million, rising 61% from GBP730,000 the year prior. Revenue shot up 11% to GBP69.5 million from GBP62.6 million. ProCook labelled its trading strong, "significantly outperforming the market". It reported a "good start" to the new financial year, with revenue in the first quarter surging 14% on-year. "While we are mindful of the uncertain geopolitical backdrop, our momentum is underpinned by record active customers and customer acquisition, and we are confident we will continue to gain market share with our unique specialist proposition and that we will continue to realise the benefits of the strategic progress we have made in the last year," it said. "In FY26 we expect to deliver continued revenue growth, primarily driven by progress in digital marketing and Ecommerce performance and the benefit of the annualisation and increasing maturity of new Retail stores opened last year, coupled with the planned opening of between five and ten net new stores in the current year. We anticipate a modest improvement in gross margins, and with our continued focus on cost discipline across our business, we expect to mitigate cost pressures including the recent NIC increases, allowing us to re-invest responsibly to accelerate future profitable growth."
----------
By Eric Cunha, Alliance News news editor
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.
Related Shares:
WPPProcook GrpLiontrust Asset ManagementThgGrainger plcTritax Big BoxWarehouse ReitBabcock