- FTSE 100 climbs 28 points to 8,787
- Games Workshop issues short but sweet update
- Defence sector bolstered by German fiscal proposals
3.58pm: FTSE 100 on the front foot late on
London’s blue chips had largely given up a hefty initial gain come late trading, but nonetheless remained in the green as Wednesday’s close approach.
Having peaked at 8,831, the FTSE 100 scaled back to 8,787 late on for a 28-point gain for the day on the likes of broader optimism around potential deals to row back on US tariffs.
Miners Antofagasta PLC and Fresnillo PLC headed the risers, up 7.9% and 6.3% respectively.
ConvaTec Group PLC, Mondi PLC, Prudential PLC and Schroders PLC were also among those having racked up hefty gains.
Mid and small caps also enjoyed gains over the course of Wednesday, with the FTSE 350 up 14 points at 4,787 and AIM all-share adding five points to reach 691.
Aston Martin Lagonda Global Holdings PLC was among other risers with a 12.7% gain, while Galliford Try Holdings PLC was also a bright spot on a profit upgrade… Read more
3.08pm: Dow Jones higher as Wall Street holds breath on tariff talk
Wall Street got off to a better start on Wednesday as traders appeared optimistic on the prospect of deals between the US and its partners to water down tariffs.
Having been introduced on Tuesday, US Commerce Secretary Howard Lutnick signalled further announcements on scaling back the tariffs could be made on Wednesday.
The Dow Jones opened 0.4% higher in a slight reverse on Tuesday’s sharp drop as a result, while the S&P 500 and Nasdaq both added 0.3%.
“Investors are looking for any signs that Trump is open to deals rather than doling out tariffs and refusing to listen,” AJ Bell analyst Russ Mould commented.
“Markets would take even the slightest rollback from Trump as a positive sign, helping to settle nerves following concerns about a full-blown trade war.”
2.25pm: German fiscal overhaul to boost growth - UBS
Plans by Germany’s prospective leaders to loosen its ‘debt brake’ rule and create a €500 billion special fund for government investment should buoy economic growth, UBS says.
According to analysts at the bank, reforming the debt brake to exclude defence expenditures above 1% of GDP may add 0.3 percentage points to economic growth.
Ramped government investment could contribute a further 0.5 percentage points to gross domestic product, analysts added.
Chancellor-to-be Friedrich Mertz and other leaders of the CSU/CSU and SPD parties had unveiled the plans on Tuesday.
European markets subsequently rallied across the board on Wednesday, with Germany’s DAX up 3.2% come the afternoon.
UBS added the proposed changes would both free up the federal budget, but also allow for a sustained rise in defence spending without the need for special funds.
“The current government plans were for a moderate increase in defense spending to 2.3% of GDP by 2028,” UBS said.
“Removing the constraints of the debt brake now opens the door to a more substantial increase.
“A historical precedent might be 1957 to 1963, when defense spending was ramped up by 1pp from 3.9% of GDP to 4.9%.”
1.23pm: Severn Trent heads fallers on underwhelming targets
Severn Trent PLC emerged as the FTSE 100’s biggest faller into Wednesday afternoon after guidance issued in a capital markets day update appeared to disappoint, along with other factors weighing on the wider utilities space.
SVT said it anticipates net operational outperformance of £300 million over the coming AMP8 regulatory period to 2030 from pricing and operational incentives, down from the £470 million achieved in the AMP7 period to 2025.
Citi analysts dubbing the update “underwhelming”.
Shares fell 4.0% to 2,412p, placing Severn Trent ahead of the likes of National Grid PLC, Haleon PLC and peer United Utilities PLC among the day’s losers.
Antofagasta PLC surged 7% in the meantime to top the risers, as it rebounded from declines earlier in the week in line with a broader rally on optimism around deals between the US and its neighbours over tariffs.
Games Workshop Group PLC surged 5.9% after flagging expectation-beating profit earlier on, while Mondi PLC, Fresnillo PLC, Barclays PLC and easyJet PLC were others rising.
The FTSE 100 was up 37 points at 8,796.
12.24pm: Nasdaq to bounce back as optimism on tariffs hits Wall Street
Wall Street looked on course for a positive start after a volatile session on Tuesday which saw stocks sink, partially recover but then tumble again as Trump’s tariffs came into force.
Futures had the Nasdaq, which posted a relatively shallow 0.4% drop against its counterparts on Tuesday, up 0.6% ahead of Wednesday’s opening bell.
The Dow Jones and S&P 500, which dropped 1.6% and 1.2% respectively, were both seen 0.4% higher in the meantime.
Donald Trump’s sweeping tariffs against Canada, Mexico and China had been introduced on Tuesday, sparking abrupt retaliation and stoking fears over US growth ahead.
Optimism appeared to seep through on Wednesday though, after US Commerce Secretary Howard Lutnick signalled deals could see tariffs potentially watered down.
“Both the Canadians and Mexicans were on the phone with me all day,” he said Wednesday evening.
“I think [Trump's] going to figure out, 'you do more, and I'll meet you in the middle some way.' And we're probably going to be announcing that tomorrow.”
11.31am: Car sales down for fifth straight month
Car registrations fell for a fifth successive month in February, despite a surge in electric vehicle sales ahead of tax changes in April.
Some 84,054 cars were registered across the country over the month, marking a 1.0% decline year on year, according to the Society of Motor Manufacturers and Traders.
Petrol and diesel sales fell by 17.3% and 15.1% respectively, with the former still accounting for the majority of registrations, as hybrid and fully electric sales increased.
Battery electric sales surged by 41.7% to 21,244, which SMMT dubbed “unsurprising” given April’s deadline for EV drivers to avoid facing vehicle excise duty for the first time.
Despite the surge, battery electric sales remained off the government’s mandated 28.0% for the year at 25.3% of total car sales so far, SMMT flagged.
10.46am: Games Workshop leads FTSE 100 higher as brokers applaud profit upgrade
Games Workshop Group PLC headed the FTSE 100 risers on Wednesday as it locked in backing from Peel Hunt analysts after gracing investors with news that profit would exceed expectations for the year.
Shares jumped on the back of the brief update on Wednesday, which pointed to strong trading in both its core business and from licensing.
Peel Hunt hiked the Warhammer owners share price target from 14,400p to 15,000p and doubled down on a ‘buy’ rating in response, noting “clear momentum” remained.
Though outer-year forecasts were left unchanged, Peel Hunt added: “The hobby is in good health, which bodes well.”
Shares were up 6.3% at 14,620p on Wednesday, placing it ahead of the likes of miners and banks in a strong day for London's blue chips.
Overall, the FTSE 100 was up 56 points at 8,815.
9.59am: Service sector job cuts continue despite growth
Britain’s service sector shed jobs for a fifth successive month in February, despite eking out slight growth, according to figures on Wednesday.
S&P Global’s UK Services Purchasing Managers Index (PMI) widened from 50.8 to 51.0 between January and February, signalling increasing output levels.
However, the fastest decline in new work was recorded since November 2022 over the month, alongside the steepest pace of job shedding in over four years.
Weak demand was said to be weighing on the sector as input prices also “sharply” increased on the likes of rising payroll costs following last October’s Budget.
“There has been a clear loss of growth momentum since last autumn,” S&P Global Market Intelligence economics director Tim Moore commented.
“Forward-looking indicators continue to suggest an elevated risk of stagflation on the horizon.”
He added business servicers had been hit by cutbacks in client investment, while consumer service providers grappled with “constrained” discretionary spending.
“Employment has now decreased for five months in a row,” Moore added, “aside from the pandemic, this represents the longest period of falling employment since early-2011”.
9.29am: Market commentary
European shares and US stock futures are all higher.
This is "fueled by optimism that President Donald Trump may announce tariff relief on imports from Canada and Mexico", says market analyst Naeem Aslam at Zaye Capital Markets, following the comments from US Commerce Secretary Howard Lutnick last night.
As mentioned below, Lutnick suggested that Trump is "probably" set to finalize tariff compromise deals with both nations today.
Says Aslam: "Investors see this as a significant step toward easing trade tensions, which have weighed on markets in recent months."
As well as the German fiscal announcement, European stock markets are being boosted by "optimism that reduced trade barriers could provide a boost to European exporters, especially in key sectors such as manufacturing and automobiles", says Aslam.
If Trump follows through on tariff adjustments, "it could strengthen North American trade relations and create a more stable economic environment", he adds.
Neil Wilson at TipRanks, not normally of a Communist leaning, is also channeling Lenin's "weeks when decades happen" quote today.
He notes that European stocks are rallying and German bond yields surging to push up the euro to its best in months on a "seismic" spending plan by the incoming government in Berlin.
He notes that the dollar is on the back foot as Trump "doubled down on tariffs" in a Washington speech last night.
Wilson says bond vigilantes did not seem to be worried about all the proposed German spending, as "maybe it’s more about the market saying yes please to spending, we’ve had enough of austerity crippling growth".
Germany's "whatever it takes" moment has echoes for him of when Mario Draghi "saved the euro when he said the ECB would do whatever it takes, the stakes are even higher for Germany's leaders this time as a schism at the heart of the Nato alliance has moved from being a pessimist's fantasy to now being a real possibility".
9.01am: London's defensives holding index back
Holding back the FTSE are falls for utilities groups and the defensive stocks that provided a buffer from losses yesterday, led by National Grid's fall of 3.1%, Severn Trent down 2.8% and British American Tobacco down 2.3%.
They are followed by Haleon, SSE and other water, tobacco, pharma and telecoms companies.
8.42am: Europe back on the charge
The FTSE 100 is continuing to march higher, up 0.7%, but as often in recent weeks is being outshone by Germany.
This is not unexpected on this occasion, given the spending plans announced last night. The DAX index is up 3%, wiping out most of the tariff-inspired losses from yesterday.
Construction group Heidelberg Materials and renewables and gas power group Siemens Energy are up to, rising 10% and 8.6% in light of the infrastructure element to Mertz's proposals.
Other markets are also bouncing back, with the French, Spanish and Italian benchmarks all up 1.7% or 1.8%.
The Euro Stoxx 600 index has jumped 1.35%, with industrial and engineering companies, especially in construction, materials, energy, and infrastructure in the lead, including German names Hochtief, Wienerberger and Bechtle.
8.23am: Breedon expands in the US
Topping the FTSE 250 is Breedon Group Plc (LSE:BREE), up 11% after it announced its second US acquisition, the $238 million (£187 million) purchase of Lionmark Construction Companies, a construction materials and road surfacing specialist based in the US state of Missouri.
Breedon will pay $226 million cash on completion, funded from its existing bank facility, with roughly $12 million paid in shares to be retained by the vendors for a minimum of 12 months.
Completion is expected by the end of this week.
8.12am: FTSE 100 opens higher
The FTSE 100 is indeed storming the barn, up 50 points in the first few minutes of trading to 8,809.36 to roughly halve the losses from yesterday.
Games Workshop Group PLC (LSE:GAW), after its short but sweet trading statement, is up 7.7% at the head of the barnstorming activity, presumably manned by miniature warrior orcs or something.
Barclays has jumped 6.6%, British Airways owner IAG is flying 4.2% higher and equipment hire group Ashtead is up 3.9%, all companies that fell sharply the day before.
7.58am: Royal Mail delay
News of a Royal Mail delay - something that customers of the postal service are quite familiar
The recommended takeover offer of RM owner International Distribution Services PLC (LSE:IDS) by Daniel Kretinsky’s EP Group is likely to be delayed until the second quarter of the year.
One final condition to be satisfied is needed before the offer can be declared unconditional, EP said in a statement this morning, relating to clearance for foreign direct investment in Romania.
"We believe this has been held up by the cancellation of the Romanian presidential election," says analyst Gerald Khoo at Panmure Liberum.
7.44am: 'Days where decades are happening'
Jim Reid, macro strategist at Deutsche Bank, says last night's fiscal announcement from Germany's likely next government fits the phrase "days where decades are happening", paraphrasing the famous VI Lenin misquote.
"Last night Germany announced plans for one of the largest fiscal regime shifts in post-war history, perhaps with reunification 35 years ago being the only rival.
"Everything you thought you knew about Germany's economic prospects 3 months ago, or even 3 weeks ago, should be ripped up and you should start your analysis from fresh. This is game-changing if it goes through."
Friedrich Mertz and other leaders of the CSU/CSU and SPD parties announced an agreement to approve three material changes to the 'debt brake' before the end of the outgoing parliament, including a €500 billion special purpose vehicle for infrastructure investment, an exemption from the debt brake for defense spending above 1% of GDP and a rise in the net borrowing cap for federal states.
Economists now think German defence spending could rise to at least 3% of GDP, perhaps as early as next year, if the Greens provide support for the constitutional majority.
And Deutsche's FX strategists have been led to take an outright bullish view on the euro, targeting a $1.10 level against the dollar, while equity strategists see the events as confirming their case for an ongoing 'overweight' of European equities, despite these having already posted the strongest outperformance versus the US at the start of a year since 2000.
Amid a crazy day of volatility on markets after the 25% Mexican and Canadian tariffs went through, US Commerce Secretary Lutnick’s said that President Trump might announce a pathway for some tariff relief on Mexico and Canada as soon as today.
Lutnick said that with both Mexico and Canada “trying to show that they’ll do better”, Trump could decide to “meet in the middle some way and we’re going to probably announce that tomorrow “ - but appeared to rule out a full rollback or pause to the tariffs.
7.33am: Games Workshop brief and to the point
Games Workshop Group PLC has rolled out an extremely short but positive trading update, saying trading in January and February has been ahead of expectations.
The owner and licensor of the Warhammer tabletop game, which was promoted to the FTSE 100 just before Christmas, said trading had been strong across both its core business and licensing.
"As a result, the group's profit before tax for the 12 months to 1 June 2025 is estimated to be ahead of expectations," it concluded in the two-sentence update.
7.17am: FTSE 100 to make barnstorming start
A barnstorming start for the FTSE 100 is predicted on Wednesday in what is already a rollercoaster week for stock markets as US tariffs kicked in, but with prospects that they could quickly be rolled back a touch.
Futures for the London stock benchmark are up 54 points ahead of the open, after it fell 112 points yesterday to end bang-on 8,759.
Overnight, US stock markets fought back from an initial sell-off but ended in the red, while Germany's most likely next government announced a huge fiscal shift.
On Wall Street, the S&P 500 battled from as low as -2% early in the session into the green as the closing bell approached, before slumping again and closing down 1.2%, having now wiped out all its gains since the US election.
The Dow Jones closed 1.55% lower and the Nasdaq 0.35% in the red, shortly after which US Commerce Secretary Howard Lutnick said that President Trump might announce a pathway for some tariff relief on Mexico and Canada as soon as today.
Meanwhile, Germany's Chancellor-in-waiting, Friedrich Merz, said his party's proposed coalition planned an unprecedented package of billions of euros in extra spending on defence and infrastructure, in a "whatever it takes" approach.
Asian markets are all in the green this morning, led by the Hang Seng with a 2.6% increase and India's Sensex, up 1.1%.
5am: What to watch on Wednesday
Foxtons is among those lining up to update on Wednesday, while car sales and purchasing managers index data will also be released.
Foxtons' update will draw focus to the housing market ahead of April's stamp duty hike... Read more
Announcements due:
Interims: Netcall PLC, Ricardo PLC
Finals: Assetco PLC, Breedon Group PLC, Dowlais Group PLC, Foxtons PLC, Quilter PLC, Sig PLC
US earnings: MongoDB, Zscaler
AGMs: BSF Enterprise PLC, Geiger Counter Ltd, Impax Asset Management Group PLC, Impax Environmental Markets PLC, Income & Growth VCT PLC, Jersey Electricity PLC, Paragon Banking Group PLC
Economic announcements: New Car Sales (UK), Services PMI (UK), Services PMI (US), Factory Orders (US), Crude Oil Stocks (US)