25th Jun 2025 08:48
(Alliance News) - Stock prices in Europe opened higher on Wednesday, following gains from New York overnight and Asia in the early hours, as an Israel-Iran ceasefire lifts spirits.
The FTSE 100 index opened up 31.65 points, 0.4%, at 8,790.64. The FTSE 250 rose 63.50 points, 0.3% at 21,389.70, and the AIM All-Share was down just 0.12 of a point at 762.42.
The Cboe UK 100 was up 0.3% at 876.52, the Cboe UK 250 was 0.2% higher at 18,906.28, and the Cboe Small Companies was down 0.2% at 17,248.67.
In Frankfurt, the DAX 40 rose 0.1%. The CAC 40 in Paris was 0.3% higher.
In Tokyo on Wednesday, the Nikkei 225 added 0.4%, while in Sydney, the S&P/ASX 200 ended marginally higher. In China, the Shanghai Composite was up 1.0%, while the Hang Seng Index in Hong Kong traded 1.3% higher.
In New York on Tuesday, the Dow Jones Industrial Average closed up 1.2%, the S&P 500 added 1.1% and the Nasdaq Composite jumped 1.4%.
Swissquote analyst Ipek Ozkardeskaya said "tensions in the Middle East are deescalating" after US President Donald Trump hit out at both Israel and Iran on Tuesday.
"It was pretty effective—at least from the market's point of view. Oil prices continued to fall," the analyst said.
"Easing stress in energy markets is excellent news for everyone who doesn't want to see higher oil prices translating into accelerating inflation and tighter monetary policy. So the market mood is restored—and the Federal Reserve doves are pressing the lemon particularly hard these days."
A barrel of Brent rose to USD68.27 on Wednesday, from USD68.08 at the time of the London equities close on Tuesday. Oil prices had tumbled on Tuesday, with the North Sea benchmark falling as low as USD67.77. It had spiked as high as USD79.31 on Monday. Gold rose to USDD3,334.01 an ounce from USD3,314.07.
Eyes were also on Federal Reserve Chair Jerome Powell, who told lawmakers Tuesday that the central bank can afford to wait for the impact of tariffs before deciding on further interest rate cuts.
Powell testified before the House Committee on Financial Services on Tuesday. He heads to the Senate on Wednesday.
The yield on the 10-year US Treasury eased to 4.29% on Wednesday from 4.30% at the time of the London equities close on Tuesday. The 30-year yield narrowed to 4.83% from 4.85%.
Sterling was up at USD1.3626 on Wednesday morning, from USD1.3621 at the time of the London equities close on Tuesday. The euro fell to USD1.1604 from USD1.1621, while against the yen, the dollar bought JPY145.28, up from JPY144.84.
Babcock International was the star performer on the FTSE 100 in early trade. It said it stands to benefit from a "new era for defence", as it upped its medium-term ambitions, raised its dividend and announced a share buyback.
The aerospace, defence and nuclear engineering services company reported pretax profit of GBP329.1 million in the year to March 31, surging 52% from GBP216.7 million. Revenue was 11% higher at GBP4.83 billion from GBP4.39 billion.
"This is a new era for defence. There is increasing recognition of the need to invest in defence capability and energy security, both to safeguard populations and to drive economic growth. Our specialist capabilities are increasingly relevant and, with a growing set of opportunities before us, Babcock is committed to play its part in driving prosperity alongside its customers," Chief Executive Officer David Lockwood said.
"Our strong financial performance in FY25, with operational momentum across the business, has enabled us to upgrade our medium-term guidance, increase our dividend and launch a GBP200 million share buyback programme for the first time in the company's history."
Babcock said the GBP200 million will be completed in the new financial year. The firm raised its final dividend by 36% to 4.5 pence per share from 3.3p. It took the total dividend to 6.5p per share, a rise of 30% from 5.0p.
Babcock said it expects to achieve its previous medium term target of underlying operating margin of 8% in financial 2026, "at least one year earlier than we anticipated".
Its underlying operating margin in the year just ended improved to 7.5% from 5.4%. Its new medium-term margin aim is "at least 9%". Its medium-term revenue ambition is for average growth of mid-single-digits.
Babcock shares jumped 11%.
Warehouse REIT added 6.2%. Tritax Big Box REIT said it has reached a cash and shares deal to acquire Warehouse REIT.
The deal values the industrial warehouse investor's entire issued, and to be issued shares at GBP485.2 million. Tritax Big Box will pay 47.2p in cash, plus 0.4236 of one of its own shares, for each share in Warehouse REIT.
Based on Tritax Big Box's closing price on Tuesday, the deal puts a 114.2p value on each Warehouse REIT share. That would be a 4.8% premium to a prior 109p per share takeover proposal from Blackstone.
Warehouse REIT had previously thrown its weight behind the GBP470 million Blackstone cash offer, but has now withdrawn that recommendation in favour of the bid by large logistics warehouses investor Tritax Big Box.
Tritax Big Box REIT shares were down 1.3%.
Also on the up, THG added 8.6% as the retailer said it has returned to constant currency revenue growth. Kitchenware seller ProCook added 4.1% on improved annual earnings.
Ultimate Products group slumped 33%, however. The owner of homeware brands including Salter and Beldray warned that it expects full-year adjusted earnings before interest, tax, depreciation and amortisation below consensus.
It expects an adjusted Ebitda for the year ending July of GBP12.5 million, against consensus of GBP14.3 million. It would also be below the GBP18.0 million it achieved in financial 2024.
UP said revenue in the four months to May rose 3% on-year, but sales were weighted to "lower margin product categories and sales channels". It meant the gross margin was similar to what it achieved in the first half. The adjusted Ebitda for the period was flat.
UP also reported a lower rate of order intake by retail customers.
Second half revenue alone is expected to be flat on-year. What's more, its order book, down 7.5% annually, suggests a slow start to the next financial.
"Given the current trading environment, the board therefore believes it is prudent to expect FY26 revenue to be lower than FY25, at a level broadly in line with the current order book position," the firm added.
By Eric Cunha, Alliance News news editor
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Related Shares:
Ultimate ProductsThgProcook GrpWarehouse ReitTritax Big BoxBabcock