10th Sep 2025 12:15
(Alliance News) - Stock prices in Europe were on the up on Wednesday afternoon, aided by an easing of French political uncertainty, Federal Reserve rate cut expectations and "blockbuster" US earnings overnight.
Geopolitical worries kept a lid on airline shares, but failed to deter the wider equity market.
The FTSE 100 index rose 36.02 points, 0.4%, at 9,278.55. The FTSE 250 was up 21.32 points, 0.1%, at 21,618.03, and the AIM All-Share was down 6.16 points, 0.8%, at 762.14.
The Cboe UK 100 was up 0.3% at 929.63, the Cboe UK 250 was down 0.3% at 18,879.45, and the Cboe Small Companies was 0.2% lower at 17,077.02.
In Paris, the CAC 40 was up 0.5%. In Frankfurt, the DAX 40 was 0.1% higher.
French President Emmanuel Macron on Tuesday named his defence minister and close ally Sebastien Lecornu as the new prime minister to resolve a deepening political crisis as protests loom in the coming days.
In choosing Lecornu, 39, to replace Francois Bayrou as the seventh premier of his mandate, Macron has plumped for one of his closest allies rather than seeking to broaden the appeal of the government across the political spectrum.
Macron has told Lecornu "to consult the political forces represented in parliament with a view to adopting a budget for the nation and making the agreements essential for the decisions of the coming months", the president's office announced.
Francois Bayrou on Tuesday submitted his resignation to President Macron after parliament ousted the government. Bayrou suffered a crushing loss in a confidence vote he had himself called, plunging France into fresh uncertainty.
Rostro analyst Joshua Mahony commented: "Markets appear relieved at the prospect of stability after recent political turbulence, though challenges lie ahead as Lecornu must navigate a divided parliament to secure passage of the 2026 budget. The failure of his predecessor's austerity push signals that compromise will be needed, but for now, investors are focusing on the near-term boost to sentiment rather than the longer-term fiscal risks."
Also providing impetus, Mahony added, was a "blockbuster update" from New York-listed Oracle.
"While top-line numbers were mixed, investors were energised by a huge uplift in Oracle's cloud infrastructure outlook," the analyst said.
Oracle shares were 31% higher in pre-market dealings in New York on Wednesday.
Stocks in New York are set for a mixed open. The Dow Jones Industrial Average is called down 0.2%, but the S&P 500 and Nasdaq Composite up 0.2%.
XTB analyst Kathleen Brooks said the S&P 500 hit a record on Tuesday, shaking off geopolitical worries. The analyst also noted a "record downward revision in non farm payrolls" for the year to March. The Bureau of Labor Statistics said 911,000 fewer jobs were created than first reported.
"The market reaction was muted and rate cut bets were scaled back slightly after the data was released. The reason is that a Fed rate cut is now fully priced in by financial markets, and the market is already aware of weakness in the labour market. Although the 911k revision was more than some expected, it does not deviate from the narrative that the labour market remains weak, which solidifies the case for Fed easing," Brooks added.
The pound traded at USD1.3533 early Wednesday afternoon, up slightly from USD1.3531 at the time of the London equities on Tuesday. The euro fell to USD1.1698 from USD1.1724. Against the yen, the dollar bought JPY147.46, up from JPY147.20.
The yield on the US 10-year Treasury widened slightly to 4.09% from 4.08%. The yield on the 30-year stretched to 4.75% from 4.73%.
Gold rose to USD3,655.46 an ounce midday Wednesday, from USD3,640.80 late Tuesday. Gold hit a record high just shy of USD3,675 an ounce on Tuesday.
In the equity market, the fortunes of two ubiquitous names in retail diverged. Primark owner AB Foods slumped 10% in London, but Inditex, the operator of Zara, Bershka and Lefties. shot up 6.3% in Madrid.
AB Foods said sales growth at Primark is expected to be around 1% in the second half of the financial year to September 13 compared to the prior year, and below Visible Alpha consensus of 3.4%.
Inditex, in contrast, said autumn/winter collections have been "very well received by customers". Store and online sales in constant currency at the start of the second half of the year, from August 1 to September 8, were up 9% from a year ago, beating consensus of 7% growth.
AJ Bell analyst Russ Mould commented: "Zara-owner Inditex is also navigating a challenging path. Its products are more expensive, which means the goods must sparkle to convince cautious shoppers to part with their cash. The difference between Inditex and Primark is that the former is more upbeat about current trading, explaining why its shares jumped on its update.
"Both Inditex and Primark have US operations and they're having to contend with tariffs and unfavourable foreign exchange rates. Life is never easy as a retailer as there are so many things out of their control – be it the wrong type of weather, economic weakness or taxes. It currently feels like a perfect storm for the retail sector and management must be adept at spinning multiple plates."
Wickes, another retail name, added 1.3% in London.
The Watford, England-based home improvement retailer said pretax profit in the half-year to June 28 increased 5.7% to GBP24.2 million from GBP22.9 million. Adjusted pretax profit climbed 17% to GBP27.3 million from GBP23.4 million.
Revenue improved 5.6% to GBP847.9 million from GBP803.2 million.
Wickes remains "comfortable with market expectations for the full year". The firm puts consensus for annual adjusted pretax profit at GBP48.2 million, which would represent a rise from GBP43.6 million in financial 2024.
Gym Group shares bulked up 8.5%. It said it expects to deliver full year results at the top end of market expectations after a strong first half.
Pretax profit ballooned to GBP3.3 million in the six months to June 30 from GBP200,000 the year prior, or to GBP4.9 million from GBP500,000 on an adjusted basis.
Revenue rose 7.9% to GBP121.0 million from GBP112.1 million, with like-for-like growth of 3%.
The firm expects full-year adjusted earnings before interest, tax, depreciation and amortisation, less normalised rent, to be at the top end of analysts' forecast range of GBP50.6 million to GBP52.8 million, up from GBP47.7 million in 2024.
In the first half of 2025, adjusted Ebitda less normalised rent jumped 24% to GBP47.7 million from GBP38.5 million a year ago.
Travel sector shares were on the decline amid the geopolitical worries. British Airways owner IAG was down 3.0%, while budget carrier easyJet fell 1.5%. Wizz Air was down 2.2%.
A barrel of Brent eased slightly to USD66.86 midday Wednesday from USD66.91 at the time of the London equities close on Tuesday.
ING analysts commented: "Israel's targeting of the Hamas leadership in Doha saw a brief spike in energy prices. But unless Gulf countries retaliate, which is very unlikely, we don't see this having a lasting impact on energy markets. We've also had news this morning that Poland has shot down Russian drones in its airspace."
Getting a boost from the geopolitical worries, BAE Systems rise 2.2%.
Still to come on Wednesday is a US producer price index reading at 1330 BST. In focus on Thursday is a US consumer price index reading, and a European Central Bank decision.
By Eric Cunha, Alliance News news editor
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