Lunchtime market roundup: Stocks higher; UK’s John Healey resigns

Stocks were mostly higher on Thursday midday, shortly after John Healey announced his resignation as UK Defence secretary, and ahead of US producer price index inflation and weekly jobless data.

The FTSE 100 index was up 81.10 points, 0.8%, at 10,335.91. The FTSE 250 was up 34.47 points, 0.2%, at 22,985.81, and the AIM all-share was down 0.76 points, 0.1%, at 771.62.

The Cboe UK 100 was up 0.9% at 1,027.53, the Cboe UK 250 was up 0.1% at 19,806.45, and the Cboe small companies was 0.3% higher at 18,651.06.

In European equities on Thursday, the CAC 40 in Paris was up 0.9%, while the DAX 40 in Frankfurt was 0.3% higher.

Sterling was at $1.3360 at midday on Thursday, down from $1.3397 at the London equities close on Wednesday. Against the euro, sterling fell to €1.1582 from €1.1593.

John Healey has resigned as UK Defence secretary, stating that UK Prime Minister Keir Starmer has ‘been unable, and the Treasury has been unwilling, to commit the resources that the nation needs to defend the country at this time of rising threats.’

The euro was lower at $1.1531 from $1.1556. Against the yen, the dollar edged up to JP¥160.52 from JP¥160.46.

‘Despite continuing uncertainty about the fate of any peace deal in the Middle East, the FTSE 100 forged ahead on Thursday,’ said AJ Bell analyst Russ Mould.

Iran’s new body overseeing the Strait of Hormuz confirmed a complete closure order for the strategic waterway until further notice, after the Revolutionary Guards announced the move overnight.

‘Due to the tensions caused by the aggression of the American forces in the region and the announcement made last night by the Iranian armed forces, the Strait of Hormuz will be closed until further notice,’ the Persian Gulf Strait Authority said in a post on X.

Iran also warned that the shaky ceasefire in the three-month Middle East war was now ‘practically meaningless’ following fresh strikes by the US.

In their second straight day of tit-for-tat attacks, Washington hit surveillance, communications and air defence facilities, US Central Command said, while Iran’s Revolutionary Guards announced a ‘punitive operation’ targeting a US base in Jordan and Gulf states reported incoming fire.

Brent crude was trading lower at $92.03 a barrel at midday on Thursday from $92.98 on Wednesday, but was up at $95.44 earlier in the day.

AJ Bell analyst Russ Mould said: ‘As has often been the case during the Iran conflict, the UK’s flagship index has found support from its collection of energy companies and more traditionally defensive names. Miners and other China-linked stocks were lifted by data suggesting the country is investing heavily in AI and consuming raw materials at a healthy rate.’

This afternoon, the European Central Bank is widely expected to raise interest rates by 25 basis points, taking the deposit rate to 2.25%.

The last time the ECB changed interest rates was a quarter point cut in June 2025, marking the end of an easing cycle that began in June 2024, after rates had peaked at 4.00%.

Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.7%, the S&P 500 index 0.7% higher, and the Nasdaq Composite to advance 1.2%.

The yield on the US 10-year Treasury was unchanged from Wednesday’s close at 4.53%. The yield on the US 30-year Treasury advanced slightly to 5.01% from 5.00%.

Back in London, Halma shares sank 15% despite beating full-year earnings forecasts, as guidance for its Photonics arm disappoints the market.

In financial 2026, the Photonics business accounted for around eight percentage points of organic revenue growth, implying a growth rate of 52% in the financial year, improved from 37% the year before.

For financial 2027, Halma expects growth in the photonics business of 30%.

JPMorgan says the financial 2027 Photonics guide is ‘likely a disappointment’, slightly higher than sell-side expectations, but ‘likely lower than buy-side expectations in our view.’

AJ Bell analyst Russ Mould said: ‘Revenue growth is expected to slow considerably from the 12-month period which ended in March, and margins are expected to be broadly unchanged. This could represent a sensible dose of conservatism from management against an uncertain backdrop.’

On the FTSE 250 index, shares in Grafton Group climbed 2.2% after it outlined its financial ambitions to 2030 at a capital markets event.

The Dublin-based building materials distributor is targeting adjusted earnings per share compound annual growth of more than 10% over the period 2025 to 2030. It is aiming for cumulative free cash flow in excess of £850 million over the five-year timeframe, and a return on capital employed of around 13%.

In 2025, Grafton reported adjusted EPS of 75.4p pence, free cash flow of £168.3 million, and a return on capital of 10.9%.

‘The medium-term targets we are announcing reflect our confidence in the strength of our strategy for organic and inorganic growth, the resilience of our business model and the opportunities ahead, underpinned by long-term structural growth drivers,’ said Chief Executive Eric Born.

On the AIM market, Concurrent Technologies was up 6.5% after it secured its largest single contract to data, worth around £17 million.

The Colchester, England-based designer and manufacturer of computer products for use in critical embedded applications said the four-year order from a ‘major European defence equipment prime contractor’ eclipses by far last year’s previous largest order of $6.2 million.

The ‘long-standing’ customer is a leading provider of ground-based air defence systems and is expanding its production capacity to support increasing demand, Concurrent added.

Aeorema Communications was 8.8% higher, after its brand experience agency Cheerful Twentyfirst secured a three-year contract to deliver Climate Week NYC in 2026, 2027 and 2028.

The London-based live events agency said the contract win ‘solidifies’ its position as a ‘trusted partner for high-impact global conference work’.

Elsewhere, Ryanair shares were down 0.2% after the UK competition watchdog said it is investigating the airline over charging parents to sit with their children on flights.

The Competition & Markets Authority said it will determine whether the practice is ‘in line with consumer law’.

The Dublin-based airline described the investigation as ‘bogus’ and a ‘failed effort by the Starmer Government to pretend it cares about consumers’.

Ryanair requires at least one parent to sit with their children aged between two and 11, according to the watchdog.

It does this through what the carrier calls a mandatory family seat, which typically costs about £8 each way, the CMA said. Paying to reserve a seat is optional for other passengers.

Gold was lower at $4,089.82 an ounce at midday on Thursday from $4,129.15 late Wednesday.

Still to come on Thursday’s economic calendar is an interest rate call by the European Central Bank, plus US PPI and weekly jobless claims data.

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