14th Aug 2025 09:00
(Alliance News) - The FTSE 100 opened in the decline on Thursday, despite gains from insurance firms, though peers in Europe were on the rise.
The FTSE 100 index traded down 14.45 points, 0.2%, at 9,150.78. The FTSE 250 fell 12.93 points, 0.1%, at 21,838.63, and the AIM All-Share rose 2.00 points, 0.3%, at 759.54.
The Cboe UK 100 was down 0.1% at 917.09, the Cboe UK 250 was flat at 19,243.92, and the Cboe Small Companies was up 0.2% at 17,105.64.
In European equities on Thursday, the CAC 40 in Paris was up 0.4%, while the DAX 40 in Frankfurt was 0.2% higher.
In Tokyo on Thursday, the Nikkei 225 ended down 1.5%, easing from Wednesday's record high. Over in China, the Shanghai Composite was down 0.5%, while the Hang Seng Index in Hong Kong was 0.4% lower. Sydney's S&P/ASX 200 rose 0.5%.
The FTSE 100 achieved a new closing high on Wednesday but eased on Thursday morning, with some of its bigger constituents going ex-dividend. Shares in miner Rio Tinto fell 3.4%, GSK lost 1.9%, BP fell 1.4% and Shell shed 1.2%. Buyers of all four will not qualify for the latest payout.
On the up, however, insurers Admiral and Aviva climbed 6.3% and 4.1%. Both reported improved half-year profit.
Hargreaves Lansdown analyst Susannah Streeter commented: "Aviva brings insurance, wealth, and retirement under one roof and 2025 is proving to be highly encouraging with momentum building across its diversified business. It's reported a better-than-expected rise in profits for the first half. Sales from insurance, wealth and retirement rose 9% to GBP21.5 billion. This buoyant performance has lit up the path ahead and it's meant the company sees no change to its positive guidance ahead for 2026. The rise in the interim dividend will be welcome news for shareholders. At 13.1p, it's around 10% up on last year and a bit higher than expected."
The pound edged up to USD1.3581 on Thursday morning, from USD1.3566 at the time of the London equities close on Wednesday.
The UK economy expanded at a faster pace than expected in the second quarter, numbers on Thursday showed, but growth slowed from the start of the year as some activity had been "brought forward" in fear of US tariffs.
The Office for National Statistics said UK gross domestic product rose 0.3% in the second quarter from the first, slowing from a 0.7% expansion in the first three months of the year.
"Some activity was brought forward to February and March ahead of changes to stamp duty in April and announced US tariff changes," the ONS explained.
According to market consensus cited by FXStreet, growth of 0.1% on-quarter had been expected for the three months to June.
Deutsche Bank analyst Sanjay Raja said the UK economy found an "unexpected second wind".
"The economy expanded by 0.3% on the quarter. But mind the third decimal. Unrounded, UK GDP grew by 0.345% on the quarter – a hair's breadth away from an even stronger surface print. This puts the UK on course to become the second fastest growing economy in the G7 (after claiming the top prize in Q1-25)," Raja said.
"Underneath the surface though, there's much to be desired."
The euro slipped to USD1.1680 early Thursday from USD1.1713 at the time of the European equities close on Wednesday. Against the yen, the dollar faded to JPY146.45 from JPY147.24.
The yen got a boost after US Treasury Secretary Scott Bessent weighed on Bank of Japan policy.
Bessent told Bloomberg that the BoJ is "behind the curve" in its inflation fight.
"So they're going to be hiking and they need to get their inflation problem under control," Bessent told Bloomberg TV.
The yield on the 10-year US Treasury slimmed slightly to 4.22% from 4.23%. The 30-year yield was narrowed at 4.81% from 4.83%.
Bessent also said the Federal Reserve should cut by 50 basis point in September, with pressure from the Donald Trump administration remaining a theme ahead of next week's Jackson Hole event.
Analysts at ING commented: "Treasury Secretary Scott Bessent's comments on the Fed yesterday added fuel to dovish Fed bets. The USD two-year swap rate fell another 6bp yesterday to just under 3.40%, around 10bp below pre-US CPI. Bessent said the Fed's rate should be 150-175bp lower, and that the September cut should be 50bp. Markets aren't pricing in anything over 25bp for now, and a 50bp option would probably not be taken seriously unless there are some hints in that direction at the Jackson Hole symposium (21-23 August), or August jobs data hugely disappoints again."
In New York on Wednesday, the Dow Jones Industrial Average ended up 1.0%, the S&P 500 rose 0.3% and the Nasdaq Composite edged up 0.1%.
A barrel of Brent rose to USD65.89 early Thursday, from USD65.51 at the time of the London equities close on Wednesday. Gold traded at USD3,363.31 an ounce, up from USD3,356.28.
Back in London, Empiric shares fell 2.7% while Unite Group added 0.2%. Unite Group announced a GBP634 million deal to acquire Empiric Student Property in a cash and shares agreement. Empiric shareholders stand to receive 0.085 of a new Unite share, as well as 32 pence in cash.
The deal values each Empiric share at roughly 94.2p. Including dividends, the deal puts at 107.5p valuation on Empiric's shares, or GBP723 million for its entire issued and to be issued share capital. Empiric shareholders would own 10% of the combined firm.
Unite had made a takeover approach for Empiric back in June. Unite said the agreed bid is a 10% premium to Empiric's undisturbed share price of 97.3p.
Elsewhere in London, South32 was down 5.4%. It plans to place its Mozal aluminium smelter in Mozambique on care and maintenance and take a hefty impairment hit if it has no access to "sufficient and affordable" electricity by the end of March next year.
The Perth-based diversified mining group said its engagements with power utilities do not provide confidence that Mozal will secure sufficient electricity beyond March 2026.
Electricity is supplied to Mozal under an agreement due to expire in March 2026.
By Eric Cunha, Alliance News news editor
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