21st Aug 2025 12:03
(Alliance News) - Stock prices in London were lower at midday on Thursday, following flash PMI reports from several regions including the UK.
Activity growth in the UK was better than expected in August but an ongoing fall in employment continued to be a weak spot, preliminary data published by S&P Global showed.
The S&P Global flash UK purchasing managers' composite output index rose to 53.0 points in August, a 12-month high, from 51.5 in July, easily beating the FXStreet-cited consensus of 51.6 in August. However, while new business volumes grew at the strongest pace since October 2024, employment was again a weak spot with total workforce numbers falling for the eleventh consecutive month at a "marked" pace.
The FTSE 100 index was down 28.35 points, 0.3%, at 9,259.79. The FTSE 250 was down 113.27 points, 0.5%, at 21,772.61, and the AIM All-Share was down 2.25 points, 0.3%, at 757.49.
The Cboe UK 100 was down 0.4% at 928.03, the Cboe UK 250 was down 0.6% at 19,106.16, and the Cboe Small Companies was marginally lower at 17,111.47.
On the FTSE 250, Hays was down 0.9% after its half-year results confirmed June's profit warning.
The London-based recruiter's pretax profit dropped by 90% to GBP1.5 million, while net fees declined by 13% to GBP972.4 million. In response, Hays cut its dividend by 59% to 1.24p per share.
"If a recruiter is cutting jobs, you know we're not in a healthy jobs market," AJ Bell's Dan Coatsworth commented. "Hays is desperately trying to right-size the business to contend with the difficult backdrop as profit slumps and the permanent recruitment market struggles."
However, he added: "A savage cut to the dividend is a sensible response in the circumstances. While it is not being received well by shareholders in the short term, the decision to prioritise cash flow and preserve the balance sheet looks a sensible one as the company looks to navigate its way through the current turbulence."
WH Smith shares, meanwhile, had plummeted 41% by midday.
This was after an accounting error was identified, leading it to cut its profit forecast for the North America division to around GBP25 million from market guidance of about GBP55 million.
Calling the news "nothing short of a disaster", Coatsworth said: "The North American business is crucial to the company's growth ambitions and the loose thread of an accounting error in this part of the group will create concern about a potential greater unravelling to come."
He continued: "The sale of the structurally declining UK high street division was supposed to free WHSmith to concentrate on its airport, train, hospital and service station outlets...However, the US news has tarnished what WHSmith would have hoped could be a fresh start for the business. It needs to get ahead of this situation as quickly as possible and make the necessary changes to rebuild credibility with the market."
On AIM, boohoo rose 9.8%.
The Manchester, England-based online fast fashion retailer completed a new three-year facility which provides access to funding of up to GBP175 million, and extends its maturity to August 2028.
Pulsar Helium lost 20%.
The helium project developer has raised GBP3.7 million in total from issuing 15.0 million shares and subscriptions for 1.2 million shares, at 23 pence each.
Small-cap Galliford Try gained 1.3%.
The Uxbridge, London-based construction firm said it has secured a five-year GBP9 billion contract with National Grid. It will design and build electricity converter stations alongside RPS Group.
In European equities on Thursday, the CAC 40 in Paris was down 0.6%, while the DAX 40 in Frankfurt was down 0.3%.
Activity in the eurozone grew better than anticipated in August as companies extended the current sequence of job creation to six months, S&P Global reported.
The Hamburg Commercial Bank flash eurozone composite purchasing managers' output index rose to 51.1 points in August from 50.9 in July, outperforming the consensus estimate of a deceleration to 50.7.
Meanwhile in Germany, overall activity growth was better than anticipated in August.
The HCB flash composite purchasing managers' output index improved to 50.9 points in August from 50.6 in July, beating the market consensus target of a slowdown in growth to 50.2.
However, S&P Global noted that employment continued to contract, "reflecting deeper job cuts in the goods-producing sector".
The pound was quoted at USD1.3467 at midday on Thursday in London, flat compared to USD1.3468 at the equities close on Wednesday. The euro stood at USD1.1648, lower against USD1.1661. Against the yen, the dollar was trading higher, at JPY147.87 compared to JPY147.15.
Naga's Frank Walbaum said dollar investors were "[avoiding] major positioning ahead of the Federal Reserve's Jackson Hole symposium".
Meanwhile, he said jobless claims data "could provide a clearer picture of the direction of the jobs market and could influence the expectations toward monetary policy. A weaker job market could bolster anticipations of interest rate cuts and weigh on the dollar."
Stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.4%, the S&P 500 index down 0.2%, and the Nasdaq Composite down 0.1%.
Ahead of Jackson Hole, Walbaum commented: "Market participants remain cautious, with sentiment restrained by concerns about monetary policy and political risks.
"Attention now shifts squarely to Fed Chair Jerome Powell's address on Friday. Markets are pricing in an 81% chance of a quarter-point rate cut in September. Another cut is expected in December...Investors are watching closely to see whether Powell will adopt a cautious tone, challenging expectations of imminent easing, or validate the current market view."
The yield on the US 10-year Treasury was quoted at 4.31%, widening from 4.29%. The yield on the US 30-year Treasury was quoted at 4.91%, widening from 4.90%.
"Investors could remain reluctant to take strong positions before Powell’s remarks, with dovish signals likely to pressure both the dollar and yields; a more cautious stance could drive them up," Walbaum said.
Brent oil was quoted at USD67.35 a barrel at midday in London on Thursday, up from USD66.70 late Wednesday.
Gold was quoted lower at USD3,330.70 an ounce, against USD3,341.46.
Still to come on Thursday's economic calendar is US jobless data and flash composite PMI, while Canada has its producer price index reading.
By Emma Curzon, Alliance News reporter
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