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LONDON MARKET MIDDAY: FTSE 100 jumps and pound sinks as BoE cuts

6th Feb 2025 12:15

(Alliance News) - Stock prices in Europe pushed higher on Thursday, as a lack of tariff tit-for-tat news supported equities, while the Bank of England announced a rate cut which turbocharged the FTSE 100.

The BoE announced a 25 basis point reduction to bank rate to 4.50% from 4.75%. The move was expected.

The FTSE 100 index added 129.37 points, 1.5%, at 8,752.66 to sit around a record high. The FTSE 250 rose 354.87 points, 1.2%, at 21,117.75. The AIM All-Share rose 6.28 points, 0.9%, at 721.86.

The Cboe UK 100 was up 1.6% at 876.75, the Cboe UK 250 rose 1.7% to 18,447.63, and the Cboe Small Companies was up 0.6% at 15,639.86.

Both Frankfurt's DAX 40 and the CAC 40 in Paris added 0.7%.

Against the dollar, the pound faded to USD1.2370 on Thursday afternoon, from USD1.2513 late Wednesday and from USD1.2422 shortly before the rate decision.

Against the dollar, the euro slipped to USD1.0361 midday London time from USD1.0414. Against the yen, the greenback climbed to JPY152.41 from JPY152.33.

The BoE said seven of its nine-strong Monetary Policy Committee backed the 25bp rate cut. Two policymakers voted for a chunkier 50bp cut, Swati Dhingra and Catherine Mann. Mann has been considered one of the MPC's more hawkish members.

The BoE said: "There has been substantial progress on disinflation over the past two years, as previous external shocks have receded, and as the restrictive stance of monetary policy has curbed second-round effects and stabilised longer-term inflation expectations. That progress has allowed the MPC to withdraw gradually some degree of policy restraint, while maintaining bank rate in restrictive territory so as to continue to squeeze out persistent inflationary pressures."

In Frankfurt, the DAX 40 was 0.6% higher, while the CAC 40 added 0.3%.

In New York, the Dow Jones Industrial Average and S&P 500 are called slightly up, and the Nasdaq Composite is called down 0.2%.

Brent oil was quoted at USD75.07 a barrel early Thursday afternoon, rising from USD74.64 at the time of the London equities close on Wednesday. Gold fell to at USD2,865.64 an ounce, from USD2,870.03.

Shining on the FTSE 100 were international earners, as the pound fell below the USD1.25 mark.

Asia-focused insurer Prudential added 3.3%, while the mining sector also shone, with Anglo American leading the charge with 6.7% rise.

AstraZeneca rose 4.7%.

The Cambridge-based pharmaceuticals firm said revenue in 2024 rose 18% to USD54.07 billion from USD45.81 billion in 2023. It helped pretax profit surge 26% to USD8.69 billion from USD6.90 billion. At constant exchange rates, total revenue rose 21%. Reported earnings per share rose 18% to USD4.54 from USD3.84 and core EPS by 13% to USD8.21 from USD7.26.

Halma fell 1.9% as HSBC cut the life-saving equipment manufacturer to 'reduce'.

BBGI Global Infrastructure agreed to a GBP1.06 billion takeover from a vehicle indirectly controlled by British Columbia Investment Management. The stock rose 17%.

The infrastructure investor will be acquired at 147.5 pence per share in cash, a 21% premium to its 121.8p closing price on Wednesday.

BBGI Global CEO Duncan Ball said: "Although both the BBGI supervisory board and the BBGI management board are confident that BBGI can continue to deliver sustainable cash flows to BBGI shareholders, the offer from BCI represents a premium to undisturbed share price and to net asset value, and provides BBGI Shareholders with the opportunity to realise the value of their holdings in cash, at an attractive value in excess of the reasonable medium term prospects for BBGI on a standalone basis."

Other infrastructure investors rose in a positive read-across. International Public Partnerships added 6.7%, while HICL Infrastructure climbed 5.5%.

TPXimpact Holdings shed 18%. The digital transformation company said a return to "more normal" trading conditions has so far not materialised in its fourth-quarter. That is despite the third quarter to December 31 meeting management expectations.

"Macroeconomic conditions and the post-election budgetary issues highlighted by the incoming government, despite significant appetite for digital transformation, have led to delays in the procurement of large digital transformation programmes with tender and award decisions moving by many months," TPXimpact said.

"In addition, spending controls implemented after the October budget have had the effect of slowing the ramp-up of new business wins and the rate at which the won backlog on some central government programmes can be expended. The comprehensive spending review, that sets out departmental budgets for the remainder of the parliamentary term, is delayed from March until June 2025."

The firm expects annual revenue to fall between 8% and 10%, but predicts adjusted earnings before interest, tax, depreciation and amortisation will rise between 1% and 2%.

"Whilst the outlook for FY25 remains challenging, the new business pipeline remains strong and we anticipate normal market conditions to return in the second quarter of FY26, once the comprehensive spending review is completed," it added.

Over in Paris, banking firm Societe Generale and luxury fashion company Kering.

SocGen surged 10% as it reported an annual profit jump and a EUR872 million share buyback programme set to launch on February 10.

Kering was 0.2% lower, paring a heftier earlier loss. The firm's Gucci arm announced on Thursday it was parting ways with Italian designer Sabato De Sarno, who had been its creative director for two years.

De Sarno was appointed to the job in January 2023, succeeding Alessandro Michele, who had been Gucci's creative director for seven years.

Gucci accounts for nearly half of Kering's total sales.

"That's effectively Kering saying its current styles aren't chiming with the public and it needs to bring in fresh ideas. Third quarter earnings were disappointing amid a slowdown in Asia and were the latest setback for the company which has nursed a steadily declining share price since 2021," AJ Bell analyst Russ Mould commented.

"New chief executive Stefano Cantino has clearly wasted no time in making his mark on the business. If something is broken, fix it and that's why Cantino has cast aside the Gucci designer, accepting that major changes are required to put Kering back on top. Normally, a change in a strategically important director after a bad patch would be applauded by the market. The fact Kering's share price fell on the news implies that investors don't believe there is a simple solution to the company's problems."

Still to come on Thursday is a US initial jobless claims reading at 1330 GMT.

By Eric Cunha, Alliance News news editor

Comments and questions to [email protected]

Copyright 2025 Alliance News Ltd. All Rights Reserved.

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