5th Nov 2025 08:54
(Alliance News) - European equities were on the back foot in early trade on Wednesday, after a less-than-stellar handover from New York and Asia overnight.
The FTSE 100 index traded down just 1.41 points at 9,713.55. The FTSE 250 was down just 9.81 points, at 21,985.67, and the AIM All-Share was down 1.24 points, 0.2%, at 758.31.
The Cboe UK 100 was up 0.1% at 969.07, the Cboe UK 250 was down 0.1% at 19,030.26, and the Cboe Small Companies was 0.3% higher at 17,851.05.
In European equities on Tuesday, the CAC 40 in Paris was down 0.2%, while the DAX 40 in Frankfurt was 0.7% lower.
Focus on Wednesday will be on the ADP private payrolls report in the US, some rare light during a data blackout amid the government shutdown.
Numbers last month had showed the US private sector shed 32,000 jobs in September. Figures at 1315 GMT on Wednesday are expected to show employment rose by 25,000 in October, according to consensus cited by FXStreet.
The US government shutdown became the longest ever Wednesday, topping the 35-day record set during Donald Trump's first term.
Federal agencies have been grinding to a halt since Congress failed to approve funding past September 30, and the pain has been mounting as welfare programs – including aid that helps millions of Americans afford groceries – hang in limbo.
There were in recent days the first fragile signs of progress in Congress in the search for an off-ramp, although – for now – 1.4 million federal workers, from air traffic controllers to park wardens, remain on enforced leave or working without pay.
In New York on Tuesday, the Dow Jones Industrial Average lost 0.5%, the S&P 500 lost 1.2% and the Nasdaq Composite slumped 2.0%.
Rabobank analysts commented: "Markets were in a risk-off mood yesterday, led by a sell-off in tech shares and growing investor concerns about valuations and policy risks.
"Tensions between China and the Netherlands –and by extension the EU– remain unresolved. The US announced on Saturday that China would allow Dutch chipmaker Nexperia BV to resume shipments from its Chinese facilities, easing fears of disruptions to auto production. However, China escalated pressure yesterday. Beijing criticized the Dutch government's 'unilateral' actions and urged it to stop interfering in Nexperia's internal affairs and find a constructive solution."
Rabobank analysts continued: "The broader economic impact on European or even global industry is still hard to gauge at this stage. Nexperia chips are widely used, especially in automotive applications. Since Nexperia halted wafer exports to China, supply disruptions could also affect production of consumer goods there. Automotive experts note that substitutes exist, but switching would take weeks at minimum – raising the risk of temporary production halts given low inventories in Europe."
In Tokyo on Wednesday, the Nikkei 225 lost 2.5%. In China, the Shanghai Composite rose 0.2%, while the Hang Seng in Hong Kong declined 0.1%. In Sydney, the S&P/ASX 200 fell 0.1%.
Sterling fell ever-so-slightly to USD1.3043 on Wednesday morning, from USD1.3045 at the time of the London equities close on Tuesday. The euro ebbed to USD1.1491 from USD1.1494. Against the yen, the dollar rose to JPY153.51 from JPY153.41.
UK ministers are facing questions about which taxes could rise in a matter of weeks after Rachel Reeves warned everyone will "have to contribute" to securing the country's economic future.
The National Institute of Economic & Social Research further raised the spectre of tax increases at the upcoming November 26 budget as it said it believes Reeves is on track to miss one of her fiscal rules by GBP38.2 billion in 2029-30.
In it latest economic outlook, Niesr said it believes the UK's independent fiscal watchdog, the Office for Budget Responsibility, will predict a smaller deficit of around GBP20 billion when its latest forecasts are published alongside the budget.
But Niesr is calling on the chancellor to aim for a buffer of at least GBP30 billion on top of this to help future-proof the finances against further shocks, which would still leave her needing to find GBP50 billion.
Niesr said a 2p rise on the 20% basic rate of income tax was expected to be the minimum needed to repair Britain's battered public finances, raising around an extra GBP20 billion.
In London, Barratt Redrow shares rose 2.0%. It left its annual outlook unchanged after a "resilient performance" during the first few months of the housebuilder's financial year.
Barratt's guidance for guidance for total home completions remains unchanged at between 17,200 and 17,800 homes for the financial year ending June 28.
Around 40% of this will be completed during the first half, "reflecting the typical seasonality of our completions".
"Our FY26 performance remains dependent on normal seasonal trading patterns for the remainder of the financial year and the impact of the upcoming budget on demand," it adds.
During the 17 weeks to October 27, the firm has seen a "resilient performance" in the face of tricky conditions and uncertainty ahead of this month's UK government budget.
The net private reservation rate per week in the period faded to 0.57 from 0.59 a year prior, it said.
The forward order book stands at 10,669 homes, down on-year from 10,706. Total home completions during the 17-week period were 3,665, up 7.9% on-year.
JD Wetherspoon fell 1.8%. Sales increased in the pub firm's first quarter, as it extended its streak of outperforming a market tracker. Like-for-like sales in the 14 weeks to November 2, its first quarter plus one more week, expanded 3.7% on-year. Total sales rose 4.2%, Wetherspoon added.
The firm said it has outperformed the CGA RSM Hospitality Business Tracker for "37 consecutive months".
"The CGA RSM Hospitality Business Tracked reports monthly LFL sales for a number of multi-outlet pub and restaurant companies. In September, the latest month for which information is available, the tracker reported industry sales of +0.2%, compared to +3.4% for Wetherspoon," the FTSE 250 listing explained.
Looking ahead, Chair Tim Martin said: "The company is pleased with the continued sales momentum but is mindful of the chancellor's budget statement later this month and, as a result, is slightly more cautious in its outlook for the remainder of the year."
At the other end of the FTSE 250, Trainline surged 9.6%. It has lifted its annual outlook after reporting first half growth. The rail ticketing platform said pretax profit in the six months to August 31 rose 42% to GBP66.2 million from GBP46.5 million a year prior. Revenue improved 2.5% to GBP234.7 million from GBP229.1 million.
Looking ahead, Trainline expects annual revenue to be between flat on the year prior or up 3%. It lifted its adjusted earnings before interest, tax, depreciation and amortisation outlook to growth between 10% and 13%, from its prior outlook of 6% to 9% growth.
"We are already Europe's number one most downloaded rail App and now we are expanding our business travel sales too, with Trainline Solutions Distribution business growing 55% in Europe. Each of our businesses are leaders in their respective markets with significant scope for future growth as we innovate to make travel simpler, better value and more sustainable for millions of people. Given the strength of our first half performance, we are again raising our Ebitda guidance for the full year," CEO Jody Ford said.
Headlam slumped 12%. The floor coverings distributor said market dynamics remain "challenging" and its performance so far in the second half of the year has been below forecast.
Headlam said revenue in the four months to October 31 has fallen 5%.
"This performance is below our expectations outlined at the interim results in September 2025, and therefore the board expects full year performance to be below expectations," it added. "In response, the board has already initiated a comprehensive programme of restructuring, cost reduction and operational improvements and is accelerating the implementation of these measures. Further details of the programme will be presented on 11 November."
Headlam said the actions are aimed at retuning the firm to profit and boosting its market footing, even if the wider environment is "subdued".
"The board is confident that these measures, combined with the group's market position and established relationships with suppliers and customers, provides a platform for a return to sustainable profitability and growth," Headlam added.
Brent traded at USD64.53 a barrel Wednesday morning, rising from USD64.48 at the time of the London equities close on Tuesday. Gold rose to USD3,982.14 an ounce from USD3,971.09.
The yield on the 10-year US Treasury ebbed to 4.07% from 4.10%. The 30-year yield faded to 4.66% from 4.67%.
Wednesday's global economic calendar has composite PMI readings in the UK at 0930 GMT before the ADP private payroll data in the US.
By Eric Cunha, Alliance News news editor
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Barratt RedrowTrainlineWetherspoon (J.D)Headlam