- FTSE 100 closes at 8,801
- US 50% steel and aluminium tariffs begin (UK dodges bullet)
- Mixed numbers from retailers B&M and WH Smith
4.59pm: FTSE nears record
The FTSE 100 rose 0.2% or 14 points to close at 8,801 on Wednesday.
London’s blue chip index was lifted by relief over the U.K. securing an exemption from the U.S.'s steepened steel and aluminium tariffs. The exemption, confirmed in a proclamation by President Trump, helps ease months of trade tension, giving a modest boost to market sentiment.
Mining stocks were among the strongest performers thanks to steady gold and copper prices, while investors shrugged off tariff concerns and showed cautious optimism after data revealed a slight rebound in Britain’s services sector in May.
The FTSE 100 now sits just 1% shy of its record high, hinting at a broader recovery in investor confidence following a limited trade agreement with the U.S. in May.
4.03pm: FTSE 100 heading higher for fourth day in a row
As we dawdle into the final half hour of Wednesday's session, the FTSE 100 is sitting on a reasonable gain, its fourth consecutive daily gain and around a hundred points from its March all-time high.
Babcock is again top of the leaderboard, with the shares up 4% today, 13% this week, and over 110% so far this year as they scuds to the highest since 2016. Though at around £5.4 billion market cap, the defence contractor is not much of an influence on the overall movement of the index.
However, London's mining giants, led by Antofagasta, Glencore and Anglo American are doing some heavy lifting, while AstraZeneca, Diageo and 3i Group from the benchmark's top 20 by market cap are also contributing gains of between 1% and 3%.
While the London index is up 0.3%, Germany's DAX and France's CAC have both climbed 0.6% today, with the Euro Stoxx rising 0.5% .
Biggest faller on the Stoxx is FTSE 250-listed B&M European Value Retail, down 14% after today's final results.
The results did "not contain many surprises and are broadly in line", while the "outlook remains uncertain", said analyst Wayne Brown at Panmure Liberum.
"The results did not contain any information on current trading (which is in line with the reporting guidelines from B&M) and while we would have liked a comment here, we would not reach too much into the absence. Considering the favourable weather, we can’t see how the sell-through of S/S stock has not been strong in Q1 – especially as the group is up against weak comps."
Among small caps a notable mover is AFC Energy PLC (AIM:AFC, OTC:AFGYF), up 34% following the signing of a joint development agreement with an unnamed "leading global industrial S&P 500 company".
It promises to de-risk the small-cap’s development model and deliver material revenue in the next few years, analysts at Zeus said.
3.40pm: UBS advice: stay calm
While this week has been fairly calm, trade tensions are bubbling under the surface, with US President Donald Trump ratcheting up tariffs on steel and aluminium, China promises a firm response and courts in Washington bicker over whether the tariffs are even legal.
According to UBS’s latest market outlook, the overall direction of travel still favours equities over the next 12 months, especially for Wall Street.
Earnings are growing, interest rates could be heading lower again, and even geopolitical posturing might be more bark than bite.
UBS’s call is simple: don’t get blown off course by dramatic headlines this summer: "We think investors can use periods of volatility or pullbacks to gradually add to US equities or balanced portfolios, as phasing into the market can be an effective way to position for medium- and longer-term upside while managing timing risks."
3pm: US early gains mostly wiped out
US stocks have started higher, with the domestically focused Russell 2000 index taking an early lead, while gains for most semiconductor companies helped lift the Nasdaq and S&P 500.
The small and mid-cap Russell index has gained around 0.3%, while initial gains for the Nasdaq, S&P 500 and Dow Jones have mostly evaporated.
Hewlett Packard Enterprise was top riser on the S&P, as the IT infrastructure provider reported strong earnings for its fiscal second quarter.
Dollar Tree was the biggest faller, down 8.25% after a mixed earnings update just as the stock hit a nine-month high.
CrowdStrike was down 7.9% after the cybersecurity company's second-quarter revenue outlook came in below analysts' estimates, hit by the Windows-related outage last year.
2.02pm: Bargain hunt continues
Warehouse REIT PLC (AIM:WHR) has become the latest London mid-cap to fall to bargain hunters in what is fast becoming a feeding frenzy on unloved UK companies.
Following recent takeover deals struck for H&T Group, Deliveroo, Dowlais, and Kinovo, the property group has agreed to a £470 million takeover by US investment giant Blackstone.
Shareholders will get 109p per share in cash for the REIT, which is less than two-thirds of the peaks of over 175p seen in 2021.
The offer from Blackstone was first revealed in late March, with the offer confirmed today after the due diligence process was completed.
1.39pm: Oil prices drop after Zelenskiy comments
Oil prices have dropped slightly after comments from Ukraine's President Zelenskiy, who has proposed ceasefire until a leaders' meeting takes place and says Ukraine is ready for such a meeting "any time".
He also said a prisoner of war exchange with Russia could take place over the weekend.
But Zelenskiy says Russian proposals are "not doable", adding that a Ukrainian team is in the US with plans to discuss a possible agreement on purchasing US weapons, sanctions on Russia and the minerals deal agreed with President Trump.
He says the continuation of Istanbul meetings at a level which does not lead to decisions is meaningless.
Brent crude is down 0.7% to $65.2 a barrel. Shell and BP shares are down 0.4% and 0.7%.
12.53pm: Thames Water creditors express support
Thames Water's main creditors have confirmed their "continued support and commitment to securing a market-based solution" for the UK's largest water company as quickly as possible after preferred partner KKK walked away.
A statement from the creditors group said they were "always going to play a critical role in any transaction, including KKR’s" and have today confirmed "they have the committed capital, capabilities and expertise needed within the group to complete a recapitalisation of Thames Water".
Talks with the company and regulator Ofwat and the government "are ongoing".
12.19pm: FTSE ticking higher
The FTSE has been ticking along higher the past few hours and has shown signs of a lift, after a sheepish start, though it's off its best as we pass midday.
Defence & aerospace, industrials and miners are providing the thrust, with the leaderboard topped by Babcock, Melrose, Spirax, Antofagasta, IMI and Glencore.
Defence names are higher despite a warning from Citi that BAE Systems, Melrose and QinetiQ "appear most at risk" from section 899 of Donald Trump's One Big Beautiful Bill (or OBBBA, as all analysts love an acronym).
If enacted in its Congressional form, though it has yet to go to the Senate, may allow the US to increase federal taxes on foreign-domiciled companies whose home country is seen by the US Treasury to have a "discriminatory" tax regime, with 5% in year one, rising progressively to 20% in year four.
BAE Systems has around 45-50% sales in the US, Melrose has 25-30% net assets in the US and QinetiQ has about 20% of sales in the US - though with the UK escaping the steel tariff investors might hope that it is not deemed to be "discriminatory".
Babcock is being lifted by JP Morgan placing the shares on what it calls “positive catalyst watch” ahead of full-year results in three weeks time, expecting the defence contractor to raise guidance and outline growth opportunities following the UK’s Strategic Defence Review (SDR).
Meanwhile, on the Continent, the DAX and CAC are both up 0.6%, while US futures are pointing to modest gains at the open, with all the major indices up between 0.1% and 0.2%.
11.38am: Ups and downs
IG Group Holdings Plc (LSE:IGG) shares are down 3% after an UBS downgrade, which saw its previous 'buy' rating removed and a 'neutral' stance adopted.
The investment case may be running out of steam, the Swiss bank says, at least in the short term, amid a challenging growth outlook and despite an expected strong set of upcoming annual results.
Shares in 4GLOBAL PLC (AIM:4GBL) crashed 50% after the sports data company announced plans to delist from London’s AIM market and re-register as a private limited company.
The company, which provides data and technology to sports and wellness organisations, said maintaining its AIM listing cost around £500,000 annually, money it believes could be better used to support its push into North America and other markets.
Attempts to raise equity funding were unsuccessful, and the group faces refinancing deadlines on its debt later this year.
More positively, CAB Payments Holdings PLC (LSE:CABP) is up 9% after the cross-border transfers specialist got the regulatory green light to open a representative office in New York City.
The approvals, granted by both the Federal Reserve and the New York State Department of Financial Services, allow Crown Agents Bank, a subsidiary of the group, to establish a licensed presence in the United States for the first time.
11:00am: Small Cap Headlines: Mosman, EGT, Ariana, and EMV Capital
Mosman Oil and Gas Ltd (AIM:MSMN) is counting down to its next helium well in Colorado, as the drill crew is now on the ground at the ‘The Bard’ location. The drill rig is in the area and will be mobilised once weather conditions allow, Mosman noted.
European Green Transition PLC (AIM:EGT) chair Cathal Friel is to take up executive responsibilities in order to ‘lead the company’s M&A strategy’. Also today, EGT released its full-year results for 2024.
Ariana Resources PLC (AIM:AAU) is growing its footprint in Kosovo, applying to extend the boundaries of the Hertica Porphyry Project.
EMV Capital (AIM:EMVC) said it was “well-positioned” for a market recovery as it reported a sharp rise in assets under management and a growing mix of revenue streams. The deep tech and life sciences venture capital firm said total assets under management had climbed to £103 million by the end of May, up from £74 million a year earlier.
10.22am: UK PMI views
Some views on the services PMIs and whether it will affect the Bank of England's policy thinking.
Thomas Pugh, economist at RSM UK, said the data suggests that "April may have marked the nadir for the UK economy" and the economy began to recover in May amid the rollback of US tariffs.
The composite PMI is pointing to flat growth in Q2, but he suspects it is "overstating the gloom", with both input and output cost factors dropping sharply, "suggesting that the jump in employment costs in April aren’t continuing to put upward pressure on prices".
He says “That may help to calm some nerves on the MPC, however, positive signs on the inflation front will probably be offset by the indications of a stronger economy. We still expect the MPC to continue with its quarterly rate cutting path, which would mean two more 25bps cuts this year. But the risks are rising that the committee skips one cut, which would leave rates at 4%."
Rob Wood at Pantheon Macroeconomics agrees that UK growth "has passed the worst".
"Even after the latest salvo from Mr Trump on steel tariffs – which the UK gained a short reprieve from – policy uncertainty is still down by 60% from its mid-April peak."
He also reckons the MPC is "far too pessimistic" in judging that underlying GDP growth was flat in Q1. "The domestic economy is likely expanding steadily, if unspectacularly," says Wood.
The inflationary factors in the services sector, including competitive pressures leading to a margin squeeze, "would be helpful for the MPC if sustained, because the output price balance is consistent with underlying services inflation slowing to around 3.5% three-months-on-three-months.
"But we are sceptical. A similar margin squeeze that was recorded last April after minimum wage hikes was quickly reversed, and we expect the same to happen this time given improving growth signals in the PMI."
9.55am: European stocks are climbing
The FTSE 100 is underperforming other European indices this morning, with the German DAX up 0.9% and France's CAC rising 0.7%.
European stocks are being lifted on a report that the German government is planning to pass a package of tax breaks worth an estimated €46 billion, while the ECB is set to cut rates again tomorrow amid falling inflation.
Also lifting sentiment, says market analyst Neil Wilson at Saxo, is Airbus rallying 4% on a report that China is considering placing an order for hundreds of aircraft in coming weeks.
"Today will see G7 countries hold talks on trade at an OECD meeting in Paris ahead of their summit in Canada in two weeks," says Wilson, adding that "the key is whether there is much appetite to nail your colours to a trade deal with Trump before court cases are complete in the US".
The US court ruling against Trump’s ‘Liberation Day’ tariffs prolongs the situation and creates further uncertainty, but Wilson says "markets seem content to see the glass half full for now".
"The White House has pushed for countries to submit their best and final offers by today...could we see an announcement from Trump if he doesn’t get what he wants? There is scope for another hit-and-TACO move here."
9.37am: Services PMI better than expected
UK services compaines were in a slightly better state of mind in the past month, with the services PMI increasing to 50.9 in May from 49.0 in April, above the first estimate of 50.2.
Incorporating the manufacturing PMI from earlier in the week, the S&P Global composite PMI rose to 50.3 in May from 48.5 the month before, above the first estimate of 49.4.
"The service sector regained its poise in May as receding concerns about US tariffs, recovering global financial markets and greater confidence among clients all helped to support output growth," said Tim Moore, economics director at S&P Global Market Intelligence.
"Although only marginal, the upturn in service sector activity was stronger than first estimated in May."
Output growth expectations for the year ahead also rebounded and optimism reached its highest level since last October, which he said "reflected forthcoming business investment plans alongside hopes of a turnaround in sales pipelines and improving domestic economic prospects".
On the downside, he said services companies saw a reduction in total new orders, with cutbacks to discretionary business and consumer spending cited.
"Reduced workloads and pressure on margins from increased payroll costs meant that headcounts remained under close scrutiny," he added, with the eight-month period of falling employment numbers the longest streak since 2008-10 apart from during the pandemic.
The overall rate of cost inflation eased from April's 21-month high, with softer cost inflation and competitive pressures contributing to the slowest rise in price charged by service providers since last October.
9.16am: THG tumbles as FTSE demotion set to be confirmed
Shares in THG PLC (LSE:THG) have tumbled almost 8%, which seems likely to be becuase the owner of MyProtein nutrition and CityAM newspaper is poised to be relegated from the FTSE 250 index as part of the June reshuffle.
FTSE Russell, the index organiser, will confirm this evening the next quarterly changes to the FTSE 100 and FTSE 250, based on the closing share prices from yesterday.
No changes to the blue-chip index are expected, but THG is almost certain to be demoted from the mid-cap index, along with Bellvue Healthcare Trust, National Express owner Mobico Group PLC (LSE:MCG) and iron ore producer Ferrexpo PLC (LSE:FXPO).
Three or four companies are predicted to be promoted are Avon Technologies PLC (LSE:AVON), Gamma Communications (AIM:GAMA) and Wickes Group PLC (LSE:WIX) and Pantheon Infrastructure PLC (LSE:PINT).
8.59am: FTSE 250 on the up
While the FTSE 100 is trundling along sideways, the FTSE 250 is tiptoeing moderately higher, up 0.2%.
Top of the mid-cap leaderboard is electronic components maker discoverIE Group PLC (LSE:DSCV), up 14% as it reported final results and set out new long-term targets.
Revenue and profits were roughly flat, with analysts saying the new information is the stronger margin performance, with operating margins reaching a record 14.8% in the second half. A new mid-term margin target of 17% by FY30 was also set out, previously 15% by FY28).
Also on the up is Ninety One PLC (LSE:N91), up 6.7% as the investment manager also FY results, with PBT down 6% on the previous year but 3% ahead of consensus forecasts.
At the other end of the scale is B&M European Value Retail SA (LSE:BME), which also released its results and has seen its shares fall 6.1%.
Hammerson PLC (LSE:HMSO) is down 2.4% as its CEO steps down.
8.47am: Profit warning from spirits maker
Shares in Johnnie Walker and Tanqueray maker Diageo PLC (LSE:DGE) opened higher this morning, so far unfazed by a profit warning from rival Remy Cointreau.
The French company, maker of St-Rémy cognac and owner of Cointreau liqueur, Mount Gay rum, and Bruichladdich whisky, has abandoned its 2030 growth targets due to persistent weakness in key markets and the impact of tariffs.
Remy Cointreau said the sales ambitions were no longer achievable, citing continued sluggish demand in the US, ongoing pressure in China, and trade tariffs on its flagship cognac.
8.39am: Tough advertising market
Shares in S4 Capital PLC (LSE:SFOR) are up 5.5% despite the digital advertising and marketing group giving a pretty hit-and-miss trading update for the first five months of the year.
Net revenues are expected to decline by a low single-digit percentage in 2025, compared to the previous guidance of broadly flat as stated in an update last month. Clients are said to "remain generally cautious" in the first five months of 2025, given the uncertainty caused by volatile global macroeconomic conditions.
However, CEO Martin Sorrell has kept his target for operational EBITDA unchanged, expecting it to be "broadly similar" to last year.
Analyst Jessica Pok at Peel Hunt says: "While the weaker trading performance does not come as a surprise, we are encouraged that profit guidance is being maintained."
8.14am: FTSE quickly on back foot
The FTSE 100 opened a handful of points higher but has already dropped back into the red.
There are no especially big moves up or down, but all but three of the index's 10 largest names are lower, including 0.5% falls for oil giants Shell and BP.
Falling furthest are Auto Trader, Marks & Spencer, Rio Tinto and WPP.
WPP is likely to be down after a report from smaller rival S4 Capital, which said advertising clients "remain generally cautious".
Precious metals miner Fresnillo, Games Workshop and defence contractor Babcock are top of the early leaderboard.
7.58am: Steel tariffs for everyone except UK
Last night, US President Donald Trump signed a proclamation that confirmed the doubling of tariffs on imports of steel and aluminium (or aluminum, as they say in the US) from 25% to 50% as of midnight.
The UK is the only country exempt from the hike, as the only country to have struck a trade agreement with the US so far.
With other trade deals conspicuous by their absence, White House officials said letters have been sent to other countries as a "friendly reminder" that Trump's 90-day pause on "reciprocal" tariffs runs out at the start of next month.
Trump fired off a social media post last night too, saying "I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!" after earlier in the day another had said that "Because of Tariffs, our Economy is BOOMING!"
7.52am: WH Smith backs outlook despite slower sales
Another mixed bag from WH Smith PLC (LSE:SMWH) in its third-quarter update?
Revenue growth slowed again in the past quarter, but the retailer said its full-year outlook remained unchanged as it is "well positioned" ahead of the coming peak summer period.
Revenue from its Travel division, which is the main business as the sale of its UK High Street business is set to complete later this month, rose 5% in the 13-week period to 31 May 2025, or 7% on a constant currency basis and 6% on like-for-like terms.
This was slower than the 6% total growth in the first half, and down from the 8% constant currency growth, but the FTSE 250-listed group said its expectations for the full financial year are "unchanged".
7.31am: Mixed bag from B&M
B&M European Value Retail SA (LSE:BME) has posted prelims showing a 13.5% fall in reported profits, though underlying EBITDA is towards the upper end of most recent guidance, as it prepares to begin a new era after the recent departure of its CEO.
The discounter's full-year numbers show adjusted EBITDA up 0.6% to £620 million for the year to 29 March 2025, compared to the guidance range of between £605 million and £625 million provided in a profit warning in April, when previous CEO Alex Russo stepped down.
The FTSE 250-listed group has since appointed experienced European discount boss Tjeerd Jegen as CEO, starting on 16 June and had revealed most of the top-line numbers earlier.
Free cash flow dropped 18.5% and final dividend of 9.7p, brought the total dividend to 30p for the year, including a special dividend of 15p paid this February, down from 34.7p a year earlier.
I can't see any comment on outlook or recent trading.
7.14am: FTSE to make another step in right direction
The FTSE 100 is projected to make another step in the right direction on Wednesday morning, even as Donald Trump’s 50% tariffs on steel and aluminium come into effect.
On the futures market, London's blue-chip benchmark has been called 15 points higher, following a day when just under 13 points were added to reach a tad over 8,787.
Wall Street overcame a wobbly start overnight, with all the major indices finishing higher, led by a 1.6% gain for the domestically focused small-cap Russell 2000 and a 0.8% increase for the tech heavy Nasdaq.
The S&P 500 and Dow Jones both closed up 0.5% despite the sizeable downgrade to the economic growth forecast from the OECD, which expects the US to be the hardest hit among major economies.
"So why are US stocks still being bought?" wonders market analyst Ipek Ozkardeskaya at Swissquote Bank. "There are several explanations: FOMO: Fear of missing out on the rally, TACO: Trump Always Chickens Out, or economic data/Federal Reserve (Fed) hopes?"
Asian markets are mostly higher this morning, led by a 1% gain for the Nikkei in Tokyo, while the Hang Seng and Chinese mainlaind indices are up between 0.3% and 0.5%.
5am: What to watch on Wednesday 4 June
Shares in B&M European Value Retail SA (LSE:BME) have been heading into their June finals with some momentum, up by a third in March and April as sales data and dry spring weather suggest a stronger-than-expected start to the new financial year, according to Citi analysts.
With CEO Alex Russo stepping down alongside a profit warning in February, a subsequent update in April saw the FTSE 250-listed discount chain narrow its profit guidance for the past year to March.
Two weeks ago, it announced that its new chief executive will be Tjeerd Jegen, former boss of Dutch discounter HEMA and German chain Takko Fashion.
Shares in B&M have been roughly flat for the past month, and losing even more momentum this week as expectations seemed to diminish.
Elsewhere, specialist lender Paragon Banking Group PLC (LSE:PAG) is expected to deliver strong revenue growth by UBS, where it is the preferred mid-cap pick among UK banks.
Among the macroeconomic news flow the UK services sector PMI survey will be out mid-morning.
With US earnings season tailing off, GameStop reports fresh from its recent jump headfirst into crypto.
Announcements due:
Interims: Paragon Banking Group, Ramsdens Holdings
Finals: B&M European Value Retail, DiscoverIE Group, Ninety One, RTW Biotech Opportunities
Overseas earnings: GameStop, Rémy Cointreau
Economic announcements: Services PMI (UK, EU, US), ISM Prices Paid (US), ISM Services (US), Crude Oil Inventories (US), ADP Payrolls (US), Federal Reserve Beige Book (US)