Early market roundup: FTSE 100 up as miners perk up, yields ease

Stocks in Europe were on the up on Wednesday, supported by dovish remarks by a US central banker, before focus turns to data from stateside later.

In the UK, sterling was supported by stronger than expected gross domestic product growth.

The FTSE 100 index traded up 70.08 points, 0.7%, at 10,706.79. The FTSE 250 was up 161.90 points, 0.7%, at 24,536.71, and the AIM all-share was up 2.10 points, 0.3%, at 788.26.

The Cboe UK 100 was up 0.8% at 1,063.62, the Cboe UK 250 was up 0.9% at 21,399.65, and the Cboe small companies was down 0.1% at 19,009.11.

In European equities on Wednesday, the CAC 40 in Paris was up 0.2%, while the DAX 40 in Frankfurt was up 0.6%.

In New York on Tuesday, the Dow Jones Industrial Average fell 0.3%, the S&P 500 lost 0.2% and the Nasdaq Composite declined 0.1%.

The yield on the US 10-year Treasury was quoted at 5.22% Wednesday morning, narrowing from 5.29%. The yield on the US 30-year Treasury was quoted at 5.55%, easing from 5.60%.

Yields cooled following remarks from New York Fed chief John Williams.

"With the policy action we took at our September meeting, there is no need for urgency, and we have time to gather more information," said New York Fed President John Williams in an address at the University at Buffalo.

Williams is an influential voice on the 12-member Federal Open Market Committee that votes to set US monetary policy.

"If the economy evolves in a manner broadly consistent with my forecast, one further upward adjustment of the federal funds target range may be appropriate late this year to support a timelier return of inflation to target," he said.

Focus turns to US gross domestic product data and personal consumption expenditures, out at 1330 BST on Wednesday, after the ADP private payrolls report at 1315.

A barrel of Brent fell to USD102.38 early Wednesday from USD104.44 late Tuesday afternoon. Gold rose to USD4,192.53 an ounce from USD4,157.46.

The pound rose to USD1.3267 on Wednesday morning from USD1.3210 at the time of the London equities close on Tuesday. Against the euro, it climbed to EUR1.1684 from EUR1.1656. The euro fetched USD1.1351, up from USD1.1335. Against the yen, the dollar bought JPY156.84, down from JPY157.59.

The UK economy grew at a stronger pace than expected in the second quarter of the year, according to data from the Office for National Statistics on Wednesday.

Gross domestic product expanded 0.5% quarter-on-quarter in the three months to June 30, upwardly revised from a previously reported 0.4% increase.

It still represents a slight slowdown from a 0.6% climb in the first quarter.

Year-on-year, the UK economy rose 1.4% in the second quarter, upwardly revised from a 1.2% increase.

In Tokyo on Wednesday, the Nikkei 225 ended 1.9% higher. In China, the Shanghai Composite rose 0.3%. The Hang Seng Index in Hong Kong was up 0.3% in late trade. Sydney's S&P/ASX 200 added 0.9%.

Factory activity in China crept back to growth in September, official data showed Wednesday, providing a positive sign for the country's leaders after two months of contraction.

The data came after Beijing announced a stimulus package to offset economic strains and low spending in the world's second-largest economy.

The manufacturing purchasing managers' index, a closely watched gauge of industrial health, came in at 50.1 this month, just above the 50 mark separating expansion from contraction.

Beijing on Monday announced "a package of pragmatic and effective incremental policy measures" to support the economy.

The government will introduce measures aimed at stabilising the property market and promoting employment and income growth, state news agency Xinhua said.

On Tuesday, the People's Bank of China followed suit, announcing measures to reduce credit costs in sectors including infrastructure and technology, and to offer more subsidies to home buyers.

The central bank will also broaden loans to support investment in water, power-grid, computing, communications, urban pipeline and logistics networks, it said.

Quintex Intel analyst Stephen Innes commented: "China has finally opened the stimulus drawer again, but anyone waiting for Beijing to wheel out the old bazooka can probably leave the ear protection at home.

"This is not Beijing trying to restart the boom. It is Beijing trying to make sure growth gets across the line. The official 4.5% to 5% growth target has become uncomfortable enough to require intervention, but not uncomfortable enough to trigger the kind of broad fiscal reflation markets have spent years waiting for. So once again China is reaching for the scalpel rather than the sledgehammer."

Nonetheless, miners traded higher, supporting the FTSE 100. Antofagasta rose 2.9%, Rio Tinto added 1.9% and Anglo American perked up 1.5%.

Also among the best performers early Wednesday were utilities, after falling on Tuesday. Prime Minister Andy Burnham had unveiled plans for new laws to pave the way for public ownership of failing water firms, and vowed a 10-year path to a "very different water system" in the UK.

Burnham told the Labour conference: "Water is a symbol of what has gone wrong with Britain – a service where the shareholders never lose and the public never win, from which some have syphoned out easy money while the public picked up the bill for the sewage in our seas. It stinks."

He said the new water bill will "start a 10-year journey to a very different water system, it will strengthen public control, mayors will have new powers to hold water companies to account, with tougher consequences for those which repeatedly fail. It will close the loopholes used to pay excessive bonuses".

"Where private companies serve the public interest, we will support them – but the consequences will be clear for those who do not, including taking back control or ownership," he added.

Severn Trent was up 2.7% on Wednesday, after falling 0.1% on Tuesday. United Utilities was also up 2.7%, having lost 0.3% on Tuesday. FTSE 250-listed Pennon rose 4.2%, having shed 0.7% on Tuesday.

Saga was the best FTSE 250 performer, adding 7.8%. Its half-year earnings have improved, and it now expects to meet medium-term aims sooner than expected. The provider of products and services for people over 50 said pretax profit in the six months to July 31 jumped to £28.0 million from £3.7 million. Revenue improved 12% to £367.5 million from £328.2 million.

Underlying pretax profit soared 98% to £46.6 million from £23.5 million. It was a first half that was "ahead of expectations and driven by growth across all core businesses", Saga added.

It now expects annual underlying pretax profit "to be materially higher than in the prior year" and in a range of £65 million to £70 million. It now expects to meet its medium-term underlying pretax profit aim of £100.0 million and leverage ratio target of 2.0 "before the original target date of January 2030".

Greggs added 7.3%. It has seen "improved" trading in recent weeks, helped by more favourable weather, and it has proposed a plan to consolidate its manufacturing operations which may lead to over 700 roles being lost.

In the 13 weeks to September 26, total sales rose 7.7%, Greggs says, climbing 7.4% on a like-for-like basis. Company-managed shop like-for-like sales were up 3.4% during the period.

"Trading improved across the quarter, supported by the successful launch of new products and more settled weather in August and September," Greggs added.

It now expects a modestly improved outcome for 2026. It had previously expected an outcome "broadly in line with 2025".

Greggs has proposed changes to its manufacturing operations after a "comprehensive review".

"This review has resulted in a set of proposals that would relocate elements of our manufacturing processes. Today we have launched a consultation exercise that will consider proposals that could lead to the closure of four sites. This may result in a total of circa 740 roles becoming redundant over a period of two and a half years. We believe such changes, whilst difficult, are necessary to ensure Greggs continues to meet capacity requirements for growth in the years ahead in the most cost-efficient manner," Greggs explained.

Elsewhere in London, Liontrust Asset Management jumped 9.8% after unveiling an up to £10 million buy of the fund management and model portfolio services business of Hawksmoor Fund Management and Hawksmoor Investment Services.

The deal adds around £1.9 billion of assets under management and advice.

The asset management company will pay £6 million in cash upfront under the terms of the deal, plus two contingent payments of up to £2 million each in cash.

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