7th May 2025 12:07
(Alliance News) - Stock prices in London were weaker on Wednesday, with some pre-Federal Reserve decision nerves and geopolitical tensions hurting sentiment.
The FTSE 100 index traded down 25.85 points, 0.3%, at 8,571.57. It came into Wednesday on a 16-day winning streak. The FTSE 250 lost 31.01 points, 0.2%, at 20,321.48, and the AIM All-Share is up 2.21 points, 0.3% at 712.55.
The Cboe UK 100 was down 0.3% at 853.98, the Cboe UK 250 rose 0.1% to 17,861.49, and the Cboe Small Companies was also up 0.1% at 15,617.67.
In Paris, the CAC 40 fell 0.7%, while the DAX 40 in Frankfurt lost 0.2%.
Against the dollar, the pound fell to USD1.3347 on Wednesday afternoon from USD1.3368 at the time of the London equities close on Tuesday. The euro, however, perked up to USD1.1364 from USD1.1348. Versus the yen, the dollar rose to JPY143.27 from JPY142.86.
"Nuclear powers India and Pakistan in a stand-off over the Kashmir prompted a few jitters, with the Federal Reserve meeting later also inducing a few butterflies in investors' stomachs. The Fed is widely expected to remain in wait-and-see mode as it awaits further evidence of the impact of tariffs on US economic health," AJ Bell analyst Russ Mould commented.
"Asia-related stocks and miners were in demand as markets looked forward to trade talks between Washington and Beijing this week, amid hopes there can be some de-escalation in the tit-for-tat tariffs between the two major economies."
Glencore added 1.7%, while Rio Tinto rose 1.2%.
Conversely, pharma stocks struggled. GSK gave back 4.1%, while AstraZeneca shed 1.7%.
The UK and the US are close to agreeing a trade pact that would cushion the impact of Donald Trump's "liberation day" tariffs by granting lower-tariff quotas for UK steel and car exports, the Financial Times on Tuesday said.
Citing officials in London and Washington, the FT said the deal, set to be signed this week, is due to include quotas that spare some UK exports from the full brunt of the additional 25% tariffs that Trump levied on steel and car imports in February and March.
UK trade negotiators returned to Washington this week for the final stages of negotiations, which one senior UK official told the FT were continuing "at speed", cautioning that disagreements remain over pharmaceuticals.
The Fed decision is at 1900 BST on Wednesday. The US central bank is expected to leave rates unmoved.
ActivTrades analyst Ricardo Evangelista commented: "While it is widely anticipated that the Fed will leave interest rates unchanged, investors will closely analyse the accompanying policy statement and subsequent press conference for any indications regarding the central bank's future rate trajectory. Any such clues could prompt movement in the US dollar and, in turn, impact gold prices, given the inverse correlation between the two assets."
A barrel of Brent traded at USD62.50 early Wednesday afternoon, falling from USD62.58 late Tuesday. Gold fell to USD3,389.25 an ounce from USD3,396.32.
In New York, the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite are all called up 0.6%.
The Bank of England announces its latest rate decision just after midday on Thursday. It will be accompanied by the monetary policy report of economic forecasts. A press conference with Governor Andrew Bailey follows shortly after.
There is a two-minute delay to the decision, which typically comes at midday, for a period of silence to mark the 80th anniversary of VE Day.
XTB analyst Kathleen Brooks commented: "A 25bp rate cut is now fully priced in, with a strong chance of a further rate cut in June also priced in by the market. If the BoE cuts rates in May and June, it would be the first back-to-back rate cuts since 2009, and it would suggest that the doves have control at the bank.
"Speeches from BoE members have started to focus on deflation and the risks to economic growth. The BOE will also release their latest monetary policy report at this meeting, and we expect that its forecasts for growth and inflation will also be revised down."
In London, Trainline shed 3.6%. It reported an annual earnings hike but predicts growth will slow in its new financial year, as the rail ticketing platform grapples with "some headwinds".
Trainline said pretax profit in the year to February 28 surged 68% to GBP80.9 million from GBP48.1 million. Revenue was 11% higher at GBP442.1 million from GBP396.7 million. Net ticket sales shot up 12% to GBP5.91 billion, Trainline said.
The firm added: "While the group remains focused on its long-term growth priorities, in FY2026 we expect some headwinds as previously announced. These include Transport for London's phased expansion of their contactless travel zone and the ongoing impact from Google's changes to its search engine results page. In addition, recent global macroeconomic uncertainty may impact foreign travel."
As a result, Trainline expects net ticket sales growth in the range of 6% to 9% for financial 2026, a slowdown from the year just ended. What's more, it predicts revenue growth to be slower than net ticket sales. Trainline predicts a revenue outcome for the new year that ranges from flat, to a 3% rise.
Paper and packaging firm James Cropper added 15%. It expects to report an adjusted Ebitda for the year to March 29 "consistent with board expectations" and the prior year.
"Group revenue marginally lower than FY24, with slightly higher Advanced Materials revenue offset by a less favourable product mix in Paper & Packaging compared to FY24," it added.
China vowed Wednesday to defend "justice" in upcoming trade talks with the US – their first since Donald Trump unveiled sweeping tariff rollout that shook global markets.
Since the US president returned to the White House in January, his administration has imposed tariffs totalling 145% on goods from China, with some sector-specific measures stacked on top.
Beijing has retaliated with 125 levies on imports from the US, along with more targeted measures.
Treasury Secretary Scott Bessent and US Trade Representative, USTR, Jamieson Greer will attend the talks in Switzerland on behalf of the US, their offices said.
Bessent told Fox News that the sides would hold meetings on Saturday and Sunday intended to lay the groundwork for future negotiations.
By Eric Cunha, Alliance News news editor
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