Lunchtime market roundup: FTSE100 up before Warsh Jackson Hole speech

London-listed equities showed flickers of hope around noon on Friday, despite pressure related to the UK government's defence budget, as markets await US Federal Reserve Chair Kevin Warsh's address at the Jackson Hole symposium.

The FTSE 100 index was up 16.68 points, 0.2%, at 10,809.22. The FTSE 250 was up 47.67 points, 0.2%, at 24,946.53, and the AIM all-share was up 0.59 points, 0.6%, at 813.70.

The Cboe UK 100 was up 0.1% at 1,074.58, the Cboe UK 250 was up 0.3% at 21,712.26, and the Cboe small companies was up 0.1% at 19,010.08.

In European equities on Friday, the CAC 40 in Paris was up 0.9%, while the DAX 40 in Frankfurt was up 0.5%.

Defence stocks in London fell amid uncertainty over whether the UK government will maintain its target of spending 3% of gross domestic product on defence by 2030, let alone 3.5% by 2035.

UK Chancellor John Healey will shelve his target for defence spending to reach 3% of GDP by 2030 when he delivers his first budget in October, the Financial Times reported on Friday.

Citing government insiders, the FT said larger decisions over increasing defence spending will be delayed until a Treasury spending review next year.

Healey resigned as defence secretary in June over what he viewed as insufficient ambition for military spending under former prime minister Keir Starmer. He previously argued that the UK should spend 3% of GDP on defence by 2030 as a step towards meeting Nato's target of 3.5% by 2035.

The October budget instead is expected to focus on filling a defence equipment funding gap of almost £5.0 billion left by the previous government, equivalent to around £1.2 billion annually.

"The immediate priority is to fund the defence investment plan that was published by Keir Starmer and the chancellor will set out more details on that at the budget," a government figure told the FT.

Healey told Sky News that "fiscal discipline" was the first priority for any chancellor, while acknowledging the financial pressures created by global conflict and increasing security threats.

Among London-listed defence contractors, BAE Systems fell 1.8%, Babcock International lost 1.3% and Qinetiq declined 0.8%.

Meanwhile, the pound was on course for a second consecutive month of gains, its longest winning streak since before the start of the Iran war.

The pound was quoted at USD1.3591 midday Friday, compared to USD1.3588 at the time of the London equities close on Thursday. Against the euro, it was down to EUR1.1668 from EUR1.1663.

The euro fell to USD1.1647 from USD1.1650. Against the yen, the buck rose to JPY159.67 from JPY159.31.

Back in London, Investec and SSE were at the top of the FTSE 100, both up 2.0%.

Airtel Africa was the biggest faller, down 2.2%.

On the FTSE 250, Goodwin was the top performer, up 5.6%, after the engineering and refractories company reported record annual profit and said a sales process for its Mechanical Engineering division was progressing well.

Trading profit more than doubled to a record £77.5 million in the year to April 30 from £35.5 million. Goodwin lifted its final dividend to 330 pence from 280p and said it expects to return a "substantial" portion of any disposal proceeds to shareholders.

Hays rose 5.3% after Panmure Liberum upgraded the recruiter to 'buy'.

"For the first time in a long time, we see an asymmetric risk profile to the upside on forecasts. It's likely to be a bumpy ride, but we raise our target price from 35p to 100p," analysts at the broker said.

Among smaller companies, McBride jumped 20% after hailing a "transformational business win" through a new contract with EH Group BV, known as Vestacy, the home care company behind brands such as Air Wick and Calgon.

The Manchester-based private-label products manufacturer entered a tie-up with Schiphol, Netherlands-based Vestacy, which will see McBride take ownership of two factories in Spain and Portugal for a "nominal" amount.

McBride will manufacture household goods, mainly laundry products, which it considers a key growth category, for Vestacy's European customers. Production volumes will be split between the two new sites and McBride's existing facilities in Italy, France, Belgium, Poland and the UK.

The manufacturing contracts with Vestacy will run for between five and eight years. McBride stressed that it expects the arrangement to be "materially earnings accretive".

Stocks in New York were called mixed. The Dow Jones Industrial Average was called up 0.1%, the S&P 500 index down 0.1%, and the Nasdaq Composite down 0.3%.

The yield on the US 10-year Treasury was quoted at 4.69%, widening from 4.66%. The yield on the US 30-year Treasury was quoted at 5.20%, widening from 5.18%.

A barrel of Brent fell to USD88.18 on Friday from USD88.67 late Thursday afternoon.

Gold traded at USD4,597.69 an ounce, little changed from USD4,597.90.

Elsewhere, Irish retail sales increased in July from both the previous month and a year earlier, figures from the Central Statistics Office showed on Friday.

The volume of retail sales rose 1.3% in July from June on a seasonally adjusted basis and was 2.2% higher than a year earlier.

Excluding motor trades, retail sales volumes increased 0.8% on a monthly basis and 2.2% annually.

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