13th Aug 2025 16:56
(Alliance News) - The FTSE 100 made steady progress on Wednesday, pushing back towards record highs, as hopes grew that the US Federal Reserve will lower interest rates in the coming months.
Joshua Mahoney, analyst at Rostro, said markets are confident that the Fed will slash rates in the months to come.
"Market pricing for a rate cut at each of the remaining three meetings of 2025 have tipped above the 50% mark, meaning that it is now the base case scenario that we see rates at least 75bp lower by year-end. No wonder markets are in buoyant mood, with a goldilocks scenario developing."
The FTSE 100 index closed up 17.42 points, 0.2%, at 9,165.23. The FTSE 250 ended up slightly at 21,851.56, but the AIM All-Share finished 1.73 points lower, 0.2%, at 757.54.
The Cboe UK 100 ended up 0.2% at 918.02, the Cboe UK 250 closed down 0.1% at 19,251.35, and the Cboe Small Companies fell 0.1% at 17,077.34.
In Europe, the CAC 40 in Paris rose 0.8%, while the DAX 40 in Frankfurt advanced 0.7%.
In New York, the Dow Jones Industrial Average was up 0.7%, the S&P 500 was 0.2% higher, hitting another all-time high, and the Nasdaq Composite advanced 0.1%.
The upbeat mood followed broadly in line with US inflation figures on Wednesday, which showed a limited impact from tariffs so far.
Bank of America said tariffs have not been the "inflationary force we expected."
The building conviction towards US rate cuts put the dollar under pressure and saw bond yields ease.
The pound climbed to USD1.3566 late on Wednesday afternoon in London, compared to USD1.3509 at the equities close on Tuesday. The euro rose to USD1.1713, higher against USD1.1682. Against the yen, the dollar was trading lower at JPY147.24 compared to JPY147.83.
The yield on the US 10-year Treasury was at 4.23%, trimmed from 4.30%. The yield on the US 30-year Treasury was 4.83%, narrowed from 4.89%.
Pegging the gains in London, BP fell 1.2% and Shell dipped 0.3% as oil prices declined.
A barrel of Brent fell to USD65.51 late Wednesday afternoon, from USD66.29 on Tuesday, as the International Energy Agency further trimmed its forecast for crude oil demand this year, citing softer global economic growth and market uncertainties.
For 2025, the association of industrialized nations now expects demand to rise by only 680,000 barrels per day, according to the monthly report released in Paris.
The previous forecast had anticipated an increase of 700,000 barrels.
XTB analyst Kathleen Brooks commented: "The peak of the supply glut will be at the end of 2026, according to the IEA, which could keep a lid on the oil price for the long term.
"The discussions between President Trump and President Putin on Friday could also be weighing on the oil price. If they do find a solution to the war in Ukraine, then it could exacerbate the supply glut even further, and the bias could be to the downside for the oil price as we lead up to the talks. For the FTSE 100, this means that big hitters like Shell and BP could come under further downward pressure."
Also weighing on the blue-chip index, Beazley, which slumped 11% after cutting revenue guidance.
The Lloyds of London insurer lowered its full-year premium growth guidance, pointing to "new risks and decreasing predictability" from the impact of new technology and climate change.
Beazley cut its outlook to a "low-to-mid single digits" percentage. It had previously expected a "mid-single digits" rise.
"While not a big change, we have noticed that investors have reacted negatively to any revenue pressures through recent reporting," James Shuck, analyst at Citi said.
"The revenue downgrade is likely to be taken poorly, while the strategy update is unclear at this point," he added.
Persimmon fell 0.4% despite solid first-half results, which saw pretax profit edge up and revenue improve.
But broker Davy said Persimmon's activity has been "soft generally through the year". It expects there to be "downward pressure" on forecasts for 2025 and 2026.
Persimmon itself said it currently expects volumes to grow to around 12,000 units in 2026.
Davy said the volumes guide is below current expectations of 12,208. Davy also noted that Persimmon expects margin progress for next year to be similar to 2025.
"On our calculations, this implies a 30-90bps cut to expectations in financial 2026, and overall we may see a 4-5% cut to financial 2026 expectations from this guidance," Davy added.
On the FTSE 250, Hill & Smith jumped 9.3% as it launched a new share buyback and lifted its dividend as earnings grew.
The Solihull, England-based infrastructure products provider said pretax profit rose 9.9% to GBP63.5 million in the first six months of 2025 from GBP57.8 million a year prior.
Chief Executive Rutger Helbing said the outlook "remains positive", underpinned by continued growth in US end markets.
The firm raised its half-year dividend by 9.1% to 18.0p per share and announced a GBP100 million share buyback.
But Watches of Switzerland took a tumble, falling 3.0%, as Kepler downgraded the stock to 'hold' from 'buy' and lowered its share price target by 26% to 350p per share.
Elsewhere, Glanbia soared 11% on an improved earnings outlook reflecting expectations of further growth in the second half of 2025 across the business.
The Kilkenny, Ireland-based sports nutrition company now expects group adjusted earnings per share in the range of 130 to 133 euro cents, up from 124 to 130 cents previously. In 2024, the firm reported adjusted EPS of 140.03 cents.
Gold was little changed at USD3,356.28 an ounce against USD3,355.98.
The biggest risers on the FTSE 100 were Spirax, up 240.00 pence at 7,085.00p, AstraZeneca, up 336.00 pence at 11,422.00p, GSK, up 30.00p at 1,434.50p, Unilever, up 91.00p at 4,581.00p, and Antofagasta, up 38.00p at 2,116.00p.
The biggest fallers on the FTSE 100 were Beazley, down 104.00p at 808.00p, Fresnillo, down 43.00p at 1,692.00p, Entain, down 22.80p at 895.20p, British American Tobacco, down 100.00p at 4,188.00p and Coca-Cola Europacific Partners, down 150.00p at 6,770.00p.
Thursday's local corporate calendar has half-year results from insurance firms Admiral and Aviva, plus mining company Antofagasta.
The global economic calendar on Thursday has UK and eurozone GDP reports, US weekly jobless claims data and US PPI figures.
By Jeremy Cutler, Alliance News reporter
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.
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