3rd Jul 2025 09:00
(Alliance News) - European blue-chips opened higher on Thursday following news of the US striking a trade deal with Vietnam, and after a tearful UK chancellor spooked markets at Wednesday's PMQs.
The FTSE 100 index opened up 41.92 points, 0.5%, at 8,816.61. The FTSE 250 was up 121.63 points, 0.6%, at 21,574.12, and the AIM All-Share was up 4.74 points, 0.6%, at 772.50.
The Cboe UK 100 was up 0.5% at 879.63, the Cboe UK 250 was up 0.6% at 19,044.89, and the Cboe Small Companies was up 0.2% at 17,448.12.
In European equities on Thursday, the CAC 40 in Paris was 0.3% to the green, while the DAX 40 in Frankfurt was up 0.2%.
Rachel Reeves will be chancellor for a "very long time to come", Keir Starmer has said after she was seen crying during Prime Minister's Questions.
The UK prime minister said it was "absolutely wrong" to suggest the chancellor's visibly tearful appearance in the Commons related to the welfare U-turn, which put an almost GBP5 billion black hole in her plans.
"It's got nothing to do with politics, nothing to do with what's happened this week. It was a personal matter for her," he said while speaking to the BBC's podcast Political Thinking with Nick Robinson.
Markets took fright after scenes of Reeves's tears spread, with the value of the pound and long-term government bonds slumping sharply.
The pound was quoted at USD1.3670 early on Thursday in London, up from USD1.3612 at the equities close on Wednesday, and against USD1.3705 at the equities close on Tuesday.
Asked if Reeves would remain in her post, the prime minister said: "She will be chancellor by the time this is broadcast, she will be chancellor for a very long time to come, because this project that we've been working on to change the Labour party, to win the election, change the country, that is a project which the chancellor and I've been working on together."
The euro stood higher at USD1.1807, against USD1.1781. Against the yen, the dollar was trading lower at JPY143.68 compared to JPY143.85.
Mkango Resources jumped 49% at the London market open.
The producer of recycled rare earth magnets, alloys, and oxides announced subsidiary Lancaster Exploration will merge with other wholly-owned Mkango subsidiaries in a business combination deal with Crown PropTech Acquisitions, to become a publicly-traded company under the name Mkango Rare Earths.
Lancaster owns Mkango's Songwe Hill rare earths project in Malawi and the Pulawy rare earth separation project in Poland, which are both designated as strategic projects under the EU Critical Raw Materials Act.
The new entity's shares are expected to trade on Nasdaq, and the pro forma value of Mkango's stake in the combined MKAR Group is USD400 million, prior to transaction expenses.
"This transaction is expected to significantly accelerate the growth trajectory of the Mkango group and position us as a key player in the global rare earth supply chain, with a strong emphasis on sustainability and critical industry demand," says Mkango President Alexander Lemon.
"Partnering with CPTK, an organisation that shares our strategic vision and values, enhances our platform for scalable growth and innovation. As we move towards a Nasdaq listing, we believe this combination will catalyse new opportunities, broaden our investor base, and drive long-term value creation."
Alien Metals gained 27%.
The Australia-focused minerals explorer and developer said it has completed a mapping and rock chip sampling programme that identified "significant" iron mineralisation at its flagship Hancock iron ore project in the Pilbara region of Western Australia.
Subsequently, the firm defined an exploration target of up to 27 million tonnes and an iron grade of 62%, which was supported by its recent exploration work. The lower end of the target is 12 million tonnes at 58% iron. This is in addition to the mining reserve and mineral resource estimates of 8.4 million tonnes at 60% iron set out in February 2024.
"The exploration target at our Hancock iron ore project is an outstanding result that further validates the scale and quality of this high-grade opportunity. The exploration target shows that the Hancock iron ore project could be materially larger than previously considered and positions Alien in a very strong commercial and technical position as we advance discussions with potential partners to develop this project," said Executive Chair Guy Robertson.
At the other end, Baltic Classified was one of the FTSE 250's biggest losers, shedding 11%.
The online classified ads portal provider in Lithuania, Estonia and Latvia reported pretax profit rose 46% to EUR51.1 million in the financial year to April 30 from EUR34.9 million a year prior. Revenue grew 15% to EUR82.8 million from EUR72.1 million.
"The strengthening macroeconomic environment is driving demand in the Baltic online classifieds sectors. Combined with the strength of our platforms, this supports our confidence in the outlook for the business," the firm said.
The firm proposed a final dividend of 2.6 cents per share, up 24% from 2.1c a year ago, taking the total payout to 3.8c, up 23% from 3.1c a year ago.
However, analysts at Jefferies said the results signal a second half financial 2025 performance "tracking behind expectations."
"This is somewhat borne out by a complex FY26 guidance statement and signals of moderating growth and margin expansion," the broker said. In the results statement, Baltic Classifieds said it expects to deliver revenue growth in the current financial year "close to last year, with the second half performing more strongly than the first half".
In Asia on Thursday, the Nikkei 225 index in Tokyo gained 0.1%. In China, the Shanghai Composite improved 0.2%, while the Hang Seng index in Hong Kong shed 0.8%. The S&P/ASX 200 in Sydney closed slightly lower.
In the US on Wednesday, Wall Street ended mixed, with the Dow Jones Industrial Average slightly lower, the S&P 500 up 0.5% and the Nasdaq Composite rising 0.9%.
The yield on the US 10-year Treasury was quoted at 4.26%, narrowing from 4.29%. The yield on the US 30-year Treasury was quoted at 4.78%, slimming from 4.79%.
"The S&P 500 closed at a fresh record high yesterday, boosted by a 4% jump in Nike shares — now up 45% since April's dip on the back of the US–Vietnam trade deal," commented Swissquote analyst Ipek Ozkardeskaya.
"At first glance, the market reaction might suggest the deal was great news. But was it?
"Under the agreement, Vietnamese exports to the US will face a 20% tariff, while goods transiting through Vietnam — such as Chinese products — will be taxed at 40%. In other words, goods made in Vietnam will now cost 20% more than they did before, which is 10 percentage points above the 10% universal tariff rate. While that’s still lower than the 40+% initially floated on Liberation Day, the new tariff structure still marks a significant cost increase, though lifting sentiment at names like Nike, Lululemon and Under Armour. In exchange, US goods will enter Vietnam without tariffs. A power play, clearly."
Meanwhile, Donald Trump's signature tax and spending bill was in limbo early Thursday as Republican leaders in the US Congress scrambled to win over a group of rebels threatening to torpedo the centerpiece of the president's domestic agenda.
Trump is seeking final approval in the House of Representatives for his Senate-passed "One Big Beautiful Bill" – but faces opposition on all sides of his fractious party over provisions set to balloon the national debt while launching a historic assault on the social safety net.
As midnight, 0500 BST, struck, House Speaker Mike Johnson was still holding open a key procedural vote – the bill's last hurdle before it can advance to be considered for final approval – more than two hours after it was first called.
With no clear sign of the stalemate breaking, his lieutenants huddled in tense meetings behind the scenes with the rebels who had either voted no or had yet to come to the House floor.
"We're going to get there tonight. We're working on it and very, very positive about our progress," Johnson told reporters at the Capitol, according to Politico.
Brent oil was quoted higher at USD68.21 a barrel early in London on Thursday from USD67.57 late Wednesday.
Gold was quoted up at USD3,357.78 an ounce against USD3,341.71.
Still to come on Thursday's economic calendar, the UK composite purchasing managers index at 0930 BST, followed by the latest US nonfarm and weekly jobless figures at 1330 BST.
By Emily Parsons, Alliance News reporter
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