Lunchtime market roundup: European stocks ease before US data flurry

European stocks traded largely lower on Wednesday afternoon, despite a strong start, ahead of an avalanche of key US data.

The FTSE 100 index traded up 12.53 points, 0.1%, at 10,649.24. It sat as high as 10,725.31 earlier on Wednesday.

The FTSE 250 was up 178.73 points, 0.7%, at 24,553.54, and the AIM all-share was up 1.20 points, 0.2%, at 787.36.

The Cboe UK 100 was up 0.2% at 1,057.76, the Cboe UK 250 shot up 1.1% at 21,436.96, and the Cboe small companies edged up to 19,043.86.

In European equities on Wednesday, the CAC 40 in Paris shed 0.5%, while the DAX 40 in Frankfurt was 0.2% lower. Both had opened solidly higher.

A lofty French inflation reading put focus on the European Central Bank. French consumer price inflation was loftier than expected in September, numbers from Insee showed on Wednesday.

Consumer prices rose 3.0% on-year in September, picking up speed from a 2.4% increase in August, a preliminary reading showed.

On a harmonised basis, allowing for EU-wide comparison, the consumer price inflation rate accelerated to 3.4% in September from 2.6% in August. The pace of inflation was ahead of the FXStreet cited forecast of 3.0%.

Eyes turn to a German inflation reading at 1300 BST.

The yield on the US 10-year Treasury was quoted at 5.23% Wednesday afternoon, narrowing from 5.29%. The yield on the US 30-year Treasury was quoted at 5.57%, 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.

The Dow Jones Industrial Average and S&P 500 are called to open flat, while the Nasdaq Composite is set to fall 0.1%.

A barrel of Brent fell to USD103.18 early Wednesday afternoon from USD104.44 late Tuesday afternoon. Gold rose to USD4,185.13 an ounce from USD4,157.46.

The pound rose to USD1.3290 on Wednesday from USD1.3210 at the time of the London equities close on Tuesday. Against the euro, it climbed to EUR1.1698 from EUR1.1656. The euro fetched USD1.1357, up from USD1.1335. Against the yen, the dollar bought JPY157.07, 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.

XTB analyst Kathleen Brooks commented: "This suggests that the UK economy was resilient to the effects the Iran war, the energy price surge and the rise in borrowing costs. Stronger services growth and rising household spending boosted the figure. This is fairly typical of the UK economy, which is service based, the real surprise was the strength of business investment and an improvement in the trade figures, which showed a boost in exports."

In London, Saga was the best FTSE 250 performer, jumping 19%. 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 7.2%. 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 16% 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.

Tullow Oil plunged 48% after disclosing that critical arbitration proceedings in Ghana had not ended in the company's favour.

Tullow Oil said it was "disappointed" by the International Chamber of Commerce tribunal's decision.

The tribunal ruled that a USD196.5 million corporate income tax assessment does not breach Tullow's petroleum agreements with the Ghanaian government.

"The tribunal has also ruled that the assessment of penalties of 100%, fall outside the scope of the contractual protections in Tullow's petroleum agreements," Tullow said.

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