Early market roundup: Stocks mostly higher as oil up; US-Iran tensions

Stock prices in London were mostly higher on Wednesday morning as the US and Iran traded strikes with one another; meanwhile Beeks Financial Cloud shares were up as it won three contracts.

The FTSE 100 index opened up 11.61 points, 0.1%, at 10,238.94. The FTSE 250 was up 44.11 points, 0.2%, at 22,882.07, and the AIM all-share was down 4.97 points, 0.6%, at 775.84.

The Cboe UK 100 was down slightly at 1,016.82, the Cboe UK 250 was down 0.1% at 19,708.68, and the Cboe small companies was up 0.2% at 18,601.87.

In European equities on Wednesday, the CAC 40 in Paris was up 0.4%, while the DAX 40 in Frankfurt was slightly lower.

Sterling was at $1.3390 on Wednesday morning, up from $1.3381 at the London equities close on Tuesday. Against the euro, sterling rose slightly to €1.1585 from €1.1581.

The euro was a little higher at $1.1553 from $1.1551. Against the yen, the dollar edged up to JP¥160.38 from JP¥160.29.

Investors were again focused on the latest developments in the Middle East on Wednesday, as Iran attacked US bases in Jordan and Bahrain amid a spate of tit-for-tat strikes between the US and Iran.

The fresh Iranian strikes came after the US carried out its own attacks on the Islamic republic, after Tehran shot down an American helicopter.

Iranian forces fired ‘long-range missiles’ and ‘targeted and destroyed four major targets’ in Jordan, including F35 fighter nests at an air base and the US command centre in Al-Azraq, the country’s Revolutionary Guards said in a statement quoted by state-run IRNA news agency early on Wednesday.

US Central Command, which oversees American forces in the Middle East, said on X that it had ‘struck Iranian air defense, ground control stations, and surveillance radar sites near the Strait of Hormuz with precision munitions from US Air Force and Navy fighter jets’.

In response, Brent crude was trading higher at $91.44 a barrel on Wednesday morning from $90.90 on Tuesday.

Focus is also on US inflation data for May, which is due out later today. The headline US inflation rate is set to top 4% year-on-year.

Following on from strong jobs data on Friday, this could put more pressure on the Federal Reserve to consider raising interest rates.

In Asia on Wednesday, the Nikkei 225 in Tokyo was down 1.9%. In China, the Shanghai Composite was 0.4% lower, while the Hang Seng Index in Hong Kong fell 0.8%. The S&P/ASX 200 in Sydney rose 0.6%.

In the US on Tuesday, Wall Street ended mixed, with the Dow Jones Industrial Average up 0.2%, while the S&P 500 fell 0.3% while the Nasdaq Composite lost 1.0%.

The yield on the US 10-year Treasury was quoted at 4.53%, narrowed slightly from 4.56%. The yield on the US 30-year Treasury slimmed a little to 5.01% from 5.03%.

Back in London, WH Smith shares sank 17% on the FTSE 250 index as it cut its profit guidance and proposed a placing to strengthen its capital position.

The Swindon, England-based travel retailer now expects to deliver headline pretax profit before non-underlying items of between £75 million and £90 million, down from April’s guidance for between £90 million and £105 million. Before that, earlier guidance was for between £100 million and £115 million.

Revenue in the 14 weeks to June 6 rose 5% on a constant currency basis, with like-for-like revenue up 2%.

WH Smith said its revised expectations for the full year ‘reflect the observed and anticipated decline in passenger numbers and weakening consumer demand across all divisions’.

WH Smith proposed a capital raise, including a non-pre-emptive placing, of up to around 26 million new shares, representing 20% of share capital.

Executive Chair Leo Quinn said: ‘There is no doubt that current economic uncertainty and its effect on consumer appetite for spending has created headwinds. In this environment, sorting legacy issues while investing in the core model requires the financial flexibility of a stronger balance sheet in lock-step with self-help. This placing is a prudent and proactive step to accelerate our transformation of what is, at heart, a good business with some great people and clear opportunity for profitable growth.’

Shares in water utility Pennon were down 1.5%, as it swung to a pretax profit of £114.4 million in the financial year to the end of March from a loss of £72.7 million a year prior.

Underlying earnings before interest, tax, depreciation and amortisation improved by 55% to £519.2 million from £335.6 million. Revenue grew 23% to £1.29 billion from £1.05 billion.

It upped its final dividend by 3.1% to 20.03p, bringing the total payout to 29.29p, down 7.2% from 31.57p.

Among small caps, Fuller, Smith & Turner shares climbed 8.5% as it raised its dividend after ‘another strong year’.

The London-based pubs and hotels operator said pretax profit fell 13% to £29.5 million in the 12 months to March 28 from £33.8 million a year earlier.

However, revenue climbed 5.7% to £397.8 million from £376.3 million. The company made a £800,000 profit from disposal of property, down from £18.9 million a year earlier.

Adjusted earnings before interest, tax, depreciation and amortisation climbed 10% to £74.6 million from £67.6 million.

The firm declared a final dividend of 13.35 pence per share, up from 12.35p a year prior. This took the total dividend to 21.20p per share, an increase of 7.3% from 19.76p.

Executive Chair Simon Emeny said: ‘As we move into our summer season, preparations have gone well. Our garden investment programme has seen fresh space created for peak trading, advance bookings for the World Cup have been strong, and we are seeing increased demand for staycations benefiting our excellent rooms business.’

On the AIM index, shares in Beeks Financial Cloud climbed 9.4%.

The Renfrew, Scotland-based cloud computing and connectivity provider wins three contracts across its Analytics, Proximity Cloud and Private Cloud offerings, worth around £1.7 million in total.

Revenue recognition from the Analytics and Proximity Cloud contracts is expected to start this month, support the firm’s performance in the current financial year. Revenue from the remaining contract will be recognised in the next financial year.

‘These contract wins demonstrate continued demand across our product portfolio and reflect the breadth of opportunities we are seeing across infrastructure, connectivity, analytics and AI-powered insight,’ said Chief Executive Officer Gordon McArthur.

Gold was lower at $4,185.39 an ounce early on Wednesday from $4,270.69 late Tuesday.

Still to come on Wednesday’s economic calendar is an interest rate decision in Canada, plus inflation data in the US.

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