2nd Jul 2025 08:57
(Alliance News) - European blue-chips opened higher on Wednesday, as a UK minister warns on the potential fallout from Tuesday's welfare reform vote and US President Donald Trump threatens Japan with an up to 35% tariff ahead of the July 9 deadline.
The FTSE 100 index opened up 4.64 points, 0.1%, at 8,789.97. The FTSE 250 was down 75.11 points, 0.4%, at 21,668.05, and the AIM All-Share was down 2.60 points, 0.3%, at 770.34.
The Cboe UK 100 was up 0.1% at 877.05, the Cboe UK 250 was down 0.3% at 19,157.64, and the Cboe Small Companies was flat at 17,434.92.
In European equities on Wednesday, the CAC 40 in Paris was 0.3% higher, while the DAX 40 in Frankfurt was up 0.3%.
There will be "financial consequences" to UK Prime Minister Keir Starmer's last-minute climbdown on welfare reform, a Cabinet minister has said, as he declined to rule out tax rises. Pat McFadden said that ministers "will keep to the tax promises" in their election manifesto.
Rachel Reeves has seen the GBP4.8 billion predicted savings from welfare changes whittled away through the government's changes to plans designed to keep backbenchers onside.
In a late concession on Tuesday evening, ministers shelved plans to restrict eligibility for the personal independence payment, Pip, with any changes now only coming after a review of the benefit.
The prime minister had a revolt of almost 50 MPs regardless of the changes.
The Chancellor of the Duchy of Lancaster told Times Radio on Wednesday that there will be "financial consequences" to the decision, and indicated that would be set out at the budget expected in the autumn.
The pound was quoted higher at USD1.3715 early on Wednesday in London, compared to USD1.3705 at the equities close on Tuesday. The euro also stood higher, at USD1.778 against USD1.1770. Against the yen, the dollar was trading up at JPY144.01 compared to JPY143.62.
Thruvision rose 56%.
The Abingdon, England-based provider of walkthrough people-screening technology has won a more than GBP1 million contract for 20 systems from a new unnamed government customer in Asia.
Thruvision added that order intake for its first quarter that ended June 30 was GBP2.3 million, more than doubled from the year before and in line with the board's expectations.
The firm now expects that its cash resources will last until the end of 2025, extended beyond its prior estimate for resources lasting only until the end of September. However, it notes this is dependent on "future trading performance and conversion of the sales pipeline in line with the board's reasonable expectations".
Spectris was one of the FTSE 250's top risers at the market open, up 4.6%.
The provider of high-tech instruments, test equipment and software has agreed to the terms of a takeover by private equity consortium Kohlberg Kravis Roberts & Co at GBP40 per share in cash.
The offer comprises GBP39.72 in cash per Spectris share plus an interim dividend of 28 pence per share. The KKR offer would be reduced by any additional Spectris dividend payment.
Spectris noted that KKR's bid represents a 6.3% premium to the offer by Advent for GBP37.63 per Spectris share, and so the Spectris board withdrew its recommendation of the Advent offer.
KKR's offer represents a 96% premium to the Spectris' closing price of GBP20.38 per share on June 6, and values Spectris' entire share capital at around GBP4.1 billion. It implies an enterprise value of around GBP4.7 billion. Spectris said it expects the takeover to complete in or by the first quarter of 2026.
At the other end, Greggs sank 14%.
The Newcastle upon Tyne, England-based pastry provider said despite "good progress" in May, footfall fell in June amid very high temperatures, though demand for cold drinks increased.
Greggs said total sales were up 6.9% in the 26 weeks to June 28 to GBP1.03 billion, with like-for-like sales growth of 2.6%.
The firm forecasts operating profit in the first half to be lower than last year, due to last year's stronger comparative trading performance and the phasing of refurbishments and cost recovery initiatives across the current year.
For the full year, Greggs said its cost inflation outlook is unchanged as it expects cost mitigation measures to improve performance in the second half.
"Whilst acknowledging that comparative LFL sales are less demanding in the second half of the year, in light of the current trading conditions the board now anticipates that the full year operating profit could be modestly below that achieved in 2024," Greggs said.
Bytes Technology slipped 22%.
In a statement before its annual general meeting on Wednesday, the Surrey, England-based enterprise software firm said it expects gross profit to be at a similar level to last year and operating profit to be marginally lower, followed by more normalised growth in the second half to February 28, 2026.
For the six months that ended August 31, 2024, gross profit rose 9.0% to GBP82.1 million from GBP75.3 million a year before, and operating profit was up 16% to GBP35.6 million from GBP30.6 million.
Bytes said trading across the first months has been hit by a "challenging macroeconomic environment", resulting in some deferral of customer buying decisions.
The company said the shift in its corporate sales division from a generalist model to specialised, customer-segment-focused teams also hurt performance.
In Asia on Wednesday, the Nikkei 225 index in Tokyo fell 0.6%. In China, the Shanghai Composite was down 0.1%, while the Hang Seng index in Hong Kong rose 0.6%. The S&P/ASX 200 in Sydney closed up 0.7%.
US President Donald Trump said Tuesday a trade deal with Japan was unlikely before the July 9 deadline, threatening to raise tariffs on Japanese imports to 30 or 35%.
Speaking to reporters aboard Air Force One, Trump criticised Japan's reluctance to accept imports of US rice, as well as the imbalance in auto trade between the two countries.
"I'm not sure we're going to make a deal," Trump said. "I doubt it with Japan, they're very tough."
While Trump imposed a sweeping 10% tariff on imports from most trading partners in April, he unveiled – then paused – higher rates on dozens of economies to allow room for negotiations.
This pause expires July 9, meaning the elevated rates are due to kick in next week if countries fail to reach agreements with Washington to avert them.
To date, only two pacts have been announced. One was a broad framework with Britain and the other a deal to temporarily lower steep tit-for-tat duties with China.
In the US on Tuesday, Wall Street ended mixed, with the Dow Jones Industrial Average rising 0.9%, the S&P 500 fading 0.1% and the Nasdaq Composite slipping 0.8%.
The yield on the US 10-year Treasury was quoted at 4.27%, widening from 4.26%. The yield on the US 30-year Treasury was quoted at 4.80%, widening from 4.79%.
Brent oil was quoted higher at USD67.02 a barrel early in London on Wednesday from USD66.97 late Tuesday.
Gold was quoted up at USD3,328.74 an ounce against USD3,286.04.
Still to come on Wednesday's economic calendar, eurozone unemployment figures and ADP private payrolls figures in the US.
By Emily Parsons, Alliance News reporter
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