Early market roundup: FTSE 100 rises, DAX 40 hits record; BoE nears

Stocks traded mostly higher on Thursday morning in Europe, with Germany's blue chip index reaching a record high following a rally on Wall Street after the Democrats in the US won control of the House and the Senate, while investors expect the Bank of England to announce an interest rate hike at noon in London.

The FTSE 100 index opened up 99.48 points, 0.9%, at 10,928.69. The FTSE 250 was up 255.41 points, 1.0%, at 25,171.64, and the AIM All-Share was up 8.99 points, 1.2%, at 769.88.

The Cboe UK 100 was up 0.8% at 1,084.68, the Cboe UK 250 was up 1.2% at 22,316.15, and the Cboe Small Companies was marginally higher at 18,833.03.

In European equities on Thursday, the CAC 40 in Paris was up 1.3%, while the DAX 40 in Frankfurt reached a record high as it gained 0.5%.

Investors were looking ahead to the Bank of England's latest monetary policy decision at 1200 GMT, with the central bank widely expected to raise interest rates by 25 basis points to 4.00% from 3.75%. The decision is expected to be 7 votes in favour of the raise, with 2 votes for a hold.

The anticipated increase comes amid persistent inflationary pressures in the UK economy, with recent data showing accelerating services sector activity and rising input costs.

The pound was quoted at USD1.3471 early Thursday, higher than USD1.3464 at the London equities close on Wednesday. Against the euro, sterling fell to EUR1.1986 from EUR1.1999 a day earlier.

The euro rose to USD1.1240 from USD1.1222 late Wednesday. Against the yen, the dollar fell to JPY158.22 from JPY158.45.

In the FTSE 100, BT Group was among the leading gainers, climbing 6.3% after reporting higher half-year profit.

The telecommunications company said pretax profit rose 12% to £1.07 billion from £956 million a year earlier.

Diageo advanced 3.5% after reporting higher first-quarter sales, supported by growth across most regions despite continued weakness in North America.

The Guinness and Johnnie Walker maker said net sales increased 1.2% to USD4.93 billion from USD4.88 billion a year earlier, while organic net sales grew 1.4%.

Excluding East African Breweries Ltd, organic net sales rose 0.6%, with volumes declining 0.1% and price and mix contributing 0.7%.

Organic net sales in North America fell 3.6%, reflecting continued softness in the US spirits market, while Latin America and the Caribbean grew 4.8%, Asia Pacific rose 4.1%, India increased 3.4%, and Europe, the Middle East and Africa grew 2.4%.

Diageo said trading remained in line with expectations and maintained its financial 2027 guidance.

At the other end of the blue-chip index, BAE Systems fell 4.2%, extending recent losses for defence stocks.

Auto Trader Group declined 2.2% after reporting lower half-year profit and revenue.

The automotive marketplace said pretax profit fell to £191.2 million from £199.3 million a year earlier, while revenue declined 1.0% to £313.4 million from £317.7 million.

Operating profit edged down 1.0% to £198.5 million from £200.1 million, although its operating profit margin remained unchanged at 63%.

Energy stocks also fell, with Shell down 1.7% and BP down 1.6%, as oil prices retreated.

Brent oil traded at USD94.73 a barrel early Thursday, down from USD99.00 late Wednesday, as investors continued to assess developments in the Middle East.

US President Donald Trump acknowledged that rising fuel prices caused by the war with Iran had contributed to the Republican Party's defeat in the midterm elections, although he defended his decision to launch military strikes against Tehran.

Speaking to reporters in Washington, Trump agreed with Vice President JD Vance's assessment that the conflict had played a role in the election losses.

In the FTSE 250, OSB Group rose 5.8% after reporting growth in its loan book and retail deposits, while maintaining its full-year guidance.

The specialist lender said its net loan book increased to £26.42 billion at September 30 from £25.92 billion at December 31, while retail deposits rose to £24.99 billion from £24.25 billion.

Total assets edged down to £30.96 billion from £31.12 billion over the same period.

OSB reaffirmed its 2026 guidance as set out alongside its half-year results.

Elsewhere in the mid-cap index, Asos climbed 4.6% after swinging to an annual pretax profit despite a decline in revenue, as its turnaround strategy continued to deliver improvements.

The online fashion retailer reported pretax profit of £24.4 million for the financial year ended August 30, compared with a loss of £281.6 million a year earlier.

Revenue fell 9.0% to £2.25 billion from £2.48 billion.

In Asia on Thursday, the Nikkei 225 index in Tokyo closed down 1.8%. In China, the Shanghai Composite ended up 0.1%, while the Hang Seng index in Hong Kong jumped 3.7%. The S&P/ASX 200 in Sydney closed up 2.6%.

Meanwhile, China's Vice Premier Ding Xuexiang rejected accusations that Beijing was undermining other economies through its industrial policies, describing the claims as "completely unfounded".

Speaking at the opening of the China International Import Expo in Shanghai, Ding dismissed concerns that China's heavily subsidised industries were flooding overseas markets with goods, particularly in the automotive and green technology sectors.

The US and European Union have repeatedly accused Beijing of supporting domestic manufacturers through extensive subsidies, putting foreign competitors at a disadvantage.

"Some institutions and media outlets have been hyping up the so-called 'China squeeze' theory," Ding said.

"Such claims... are completely unfounded," he added.

In the US on Wednesday, Wall Street rallied following the Democrats' victory in the midterm elections, with the Dow Jones Industrial Average jumping 3.0%, the S&P 500 gaining 1.6% and the technology-heavy Nasdaq Composite advancing 1.4%.

The Democrats secured control of both chambers of Congress, dealing a significant political setback to Trump and the Republican Party.

The yield on the US 10-year Treasury was quoted at 4.87% early Thursday, narrowing from 4.92% on Wednesday. The yield on the US 30-year Treasury narrowed to 5.25% from 5.31%.

Gold was quoted at USD4,122.82 an ounce early Thursday, higher than USD4,041.83 on Wednesday.

Still to come on Thursday's economic calendar, Germany, the eurozone and the UK release construction purchasing managers' index figures, while the eurozone also publishes producer price inflation data.

The Bank of England announces its latest interest rate decision at 1200 GMT, while the US releases weekly jobless claims and nonfarm productivity figures.

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