3rd Sep 2025 06:58
(Alliance News) - London blue chips are set to open slightly higher on Wednesday, as gold continues to climb and investors look to UK and eurozone composite PMI readings later in the day.
IG says futures indicate the FTSE 100 to open up 2.6 points at 9,119.29 on Wednesday. The index of London large-caps closed down 79.65 points, 0.9%, at 9,116.69 on Tuesday.
Sterling was quoted at USD1.3366 early Wednesday, lower than USD1.3389 at the London equities close on Tuesday.
The euro traded at USD1.1631 early Wednesday, down from USD1.1659 late Tuesday. Against the yen, the dollar was quoted up at JPY148.59 versus JPY148.20.
The UK could have to import 70% of its oil and gas demand by the end of this decade if there is not "sustained investment" in the sector, industry leaders have warned.
It comes after a report said production from the North Sea fell to a "historic low" in 2024, leaving the UK needing imports of oil and gas to meet more than 40% of its energy needs.
That is despite Offshore Energies UK insisting there are still "significant oil and gas reserves" in the North Sea, with the industry body saying these could be realised if there was "continued support for the sector".
Meanwhile, a group of Thames Water lenders have set out plans on how they would deliver GBP20.5 billion of investment to turn around the troubled supplier's performance as they look to secure a rescue of the firm.
The supplier's main creditors – led by a team of 15 investors called the London & Valley Water consortium – have pledged to "fix the foundations" of Thames Water with the mammoth spending proposal put forward to regulator Ofwat.
They are promising an increased focus on improving Thames Water's poor pollution performance and record on leaks, with targets to cut sewage spills by at least 135 a year.
Thames Water – the UK's biggest water supplier with around 16 million customers – is on the brink of nationalisation as it struggles under a mountain of debts.
Brent oil was trading at USD68.92 a barrel early Wednesday, up from USD68.81 late Tuesday.
Gold was quoted at USD3,533.45 an ounce early Wednesday, higher than USD3,511.91 on Tuesday. The yellow metal hit a fresh record as Asia markets opened, climbing to USD3,546.96 an ounce.
"Gold is undergoing an impressive rally, supported by a combination of macroeconomic factors and capital flows. After setting new record highs, the precious metal has continued to attract investors thanks to expectations that the US Federal Reserve will soon shift toward monetary easing, declining real yields, and rising demand for safe-haven assets amid global economic uncertainties," commented XS.com analyst Linh Tran.
"Within the policy landscape, real yields remain the key variable for gold. Each time US economic data signals a slowdown, expectations for imminent Fed rate cuts rise, pushing bond yields lower and providing direct support for gold. This is the clearest transmission channel explaining why gold reacts strongly to labor market data, inflation releases, and Fed communications."
In the US on Tuesday, Wall Street ended lower, with the Dow Jones Industrial Average slipping 0.6%, the S&P 500 fading 0.7% and the Nasdaq Composite losing 0.8%.
In Asia on Wednesday, the Nikkei 225 index in Tokyo shed 1.0%. In China, the Shanghai Composite fell 1.3%, while the Hang Seng index in Hong Kong was 0.6% lower. The S&P/ASX 200 in Sydney was down 1.8%.
China and Russia have signed some 20 new deals as bilateral relations between the two countries strengthen, according to reporting by Chinese news agency Xinhua.
Among them was a legally binding memorandum for the construction of a new gas pipeline through Mongolia to China, announced by Gazprom chief Alexei Miller in Beijing and reported by Russian news agencies. Beijing and Moscow also agreed to a trial of visa-free travel for Russians with valid passports to China.
In Wednesday's corporate calendar, half year results from wealth management firm M&G, first quarter results from equipment hire company Ashtead and a trading update from luxury goods retailer Watches of Switzerland.
In the economic calendar on Wednesday, a slew of composite PMI readings, US factory goods orders data and the release of the Federal Reserve's Beige Book.
By Emily Parsons, Alliance News reporter
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