23rd Apr 2025 08:58
(Alliance News) - London opened in the green on Wednesday, buoyed by renewed efforts to end the war in Ukraine, and new hopes for a de-escalation in the trade spat between the US and China.
The FTSE 100 index opened up 112.03 points, 1.4%, at 8,440.63. The FTSE 250 was up 240.33 points, 1.3%, at 19,478.57, and the AIM All-Share was up 1.35 points, 0.2%, at 673.14.
The Cboe UK 100 was up 1.4% at 839.50, the Cboe UK 250 was up 1.2% at 17,017.82, and the Cboe Small Companies was down 0.1% at 15,314.10.
UK public sector net borrowing was higher than expected in March, figures released by the Office for National Statistics showed on Wednesday.
Public sector borrowing totalled GBP16.44 billion in March, up from GBP12.31 billion in February and higher than GBP12.7 billion the year before. It also exceeded an FXStreet-cited consensus of GBP16.05 billion.
Notably, February's net borrowing was revised up from a previously reported GBP10.71 billion, which the ONS said was primarily due to improvements of its estimation of the monthly profile of local government debt. It has not changed the quarterly values, it added.
It was the third-highest March borrowing since monthly records began in 1993, the ONS noted.
Meanwhile, UK Chancellor Rachel Reeves has pledged to "defend Britain's interests" as she prepares to meet fellow finance ministers in Washington and push for a US trade deal. Reeves will spend three days in the US capital for the International Monetary Fund's spring meetings, which bring together finance ministers and business leaders from across the G7 and G20.
It comes amid worldwide economic uncertainty after the IMF said the impact of US President Donald Trump's global tariffs will significantly slow growth in economies around the world, including the UK. The organisation said on Tuesday it is slashing its global growth forecast by 0.5 percentage points this year, with nearly all countries seeing a downgrade.
The pound was quoted lower at USD1.3320 early on Wednesday in London, compared to USD1.3383 at the equities close on Tuesday. The euro also stood lower at USD1.1401, against USD1.1479.
Against the yen, the dollar was trading up at JPY141.73 compared to JPY140.73.
In Asia on Wednesday, the Nikkei 225 index in Tokyo was up 1.9%. In China, the Shanghai Composite shrank 0.1%, while the Hang Seng index in Hong Kong rose 2.2%. The S&P/ASX 200 in Sydney closed 1.5% higher.
Efforts to find an end to the war in Ukraine will continue in London with officials from Kyiv along with US and European allies discussing ways to end the bloodshed.
The talks have been downgraded from the high-level meeting of ministers which had been expected after US Secretary of State Marco Rubio pulled out. Donald Trump's envoy for Ukraine and Russia Keith Kellogg will represent Washington in the discussions in London instead. The US state department blamed a scheduling issue for Mr Rubio's absence, but it suggests the chances of a breakthrough in London are limited.
Ukraine could be forced to swallow a bitter pill under terms being ironed out between the US and Russia, according to the Financial Times. Russian leader Vladimir Putin has offered to halt his invasion of Ukraine across its current front lines, the newspaper reported.
Among the ideas floated by the US for the settlement are Moscow's continued control of occupied Ukrainian regions, and US recognition that Russia owns the Crimean peninsula, the FT said. Ukrainian President Volodymyr Zelensky is unlikely to accept the surrender of Crimea and called for an unconditional ceasefire as the first step to negotiations to end the war.
In the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average climbing 2.7%, the S&P 500 improving 2.5% and the Nasdaq Composite edging up 2.7%.
The trade stand-off between Washington and Beijing is not sustainable, US Treasury Secretary Bessent said, predicting the tit-for-tat tariff war would de-escalate soon. Speaking at a closed-door event hosted by JPMorgan Chase, Bessent said the enormous tariffs the world's two biggest economies placed on each other's imports amounted to a reciprocal trade embargo. Bessent told the event that he expects a de-escalation in the near future, according to a person who was in the room.
US President Donald Trump signalled on Tuesday that he was not looking to "play hardball" in the ongoing trade dispute with China.
"We're going to be very nice. They're going to be very nice, and we'll see what happens," Trump said referring to China. "But ultimately they have to make a deal, because otherwise they're not going to be able to deal in the US."
"If they don't make a deal, we'll set the deal ... and it'll be a fair deal for everybody," Trump added, saying he expects the process to move quickly.
China said it was willing to engage in trade talks with Washington.
"China pointed on early on that there are no winners in tariff wars and trade wars," foreign ministry spokesman Guo Jiakun said at a daily press conference in Beijing, adding: "The door for talks is wide open."
In European equities on Wednesday, the CAC 40 in Paris was up 2.0%, while the DAX 40 in Frankfurt was 2.4% higher.
Croda International led the FTSE 100 at the London market open on Wednesday, up 7.7%.
The specialty chemicals firm said sales in the first quarter that ended March 31 totalled GBP442 million, up 8.1% from GBP409 million the year before. Sales within its Life Sciences arm improved 10% to GBP134 million, its Consumer Care unit delivered 7.6% on-year growth to GBP255 million, and Industrial Specialties sales increased 6.0% to GBP53 million.
Adjusted pretax profit for the quarter was "in line with our expectations", noted Croda, as "sales growth was driven by higher sales volumes with the price/mix headwinds we saw in 2024 starting to diminish". The company maintains its 2025 adjusted pretax profit guidance of GBP265 million to GBP295 million, which would represent at least a 1.9% rise from GBP260.0 million in 2024.
Ethernity Networks shares surged.
The supplier of data processing semiconductor technology for networking appliances expects to post revenue of around USD1.4 million for 2024, down 63% from USD3.8 million in 2023.
However, it anticipates a loss before interest, tax, depreciation and amortisation of USD1.4 million, narrowed from USD3.9 million a year prior. This was primarily the result of research and development expenditure for the year reducing by 40% to USD2.5 million from USD4.2 million.
Ethernity also notes it is in talks "at varying levels of advancement" with four unnamed wireless vendors, which have "expressed an interest" in the application-specific standard product in development by Ethernity. No formal deal has been made to date.
At the other end, CleanTech Lithium tumbled 26%.
The lithium exploration company said its special lithium operating contract application for the Laguna Verde project has been rejected by the Chilean government, and has not been admitted into the process for direct negotiation but should instead enter a short public tender process.
CleanTech Lithium intends to appeal the decision within the next five business days, as the operating contract is required for the commercial production of lithium.
Brent oil was quoted up at USD68.45 a barrel early in London on Wednesday from USD67.62 late Tuesday.
Gold was quoted lower at USD3,311.07 an ounce against USD3,425.98, retreating from a record high of USD3,500.12 on Tuesday.
Still to come on Wednesday's economic calendar, a slew of PMI readings across the globe, including the UK, US and eurozone.
German data is already out, with the country's private sector economy slipping back into contraction in April amid concerns over tariffs and economic uncertainty.
The Hamburg Commercial Bank flash Germany composite PMI output index fell to 49.7 points in April from 51.3 in March, falling below the 50-point threshold between expansion and contraction for the first time in four months.
By Emily Parsons, Alliance News reporter
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