Proactive Investors -
- FTSE 100 advances 60 points to 8245
- UK unemployment rate remains at 4.4%, wage growth 5.7%
- Frasers (LON:FRAS) tops blue-chips as profits impress
London leading the way
The FTSE 100 is leading the gains in Europe this morning, up 0.74% so far.
Germany's DAX is the laggard, down 0.13%, while France's CAC 40 and the wider the Euro Stoxx 600 are both marginally above flat, with investors seemingly keeping their powder dry ahead of the ECB meeting later.
Italy's FTSE MIB and Spain's IBEX 35 are better, up 0.24% and 0.41%.
The pound is down slightly against the dollar, back below $1.30 again, and just below flat against the euro too at £0.8411.
Looking ahead to the ECB meeting, Marc Ostwald at ADM Investor Services says: "The stubborn level of services CPI... is among the factors that are expected to see the ECB hold rates today, with most expecting Lagarde to hint at the possibility of, but not commit to a September rate cut, with views on the governing council on how much further rates will fall this year rather divergent, judging by recent comments."
He says the lending survey earlier this week also highlighted that credit conditions are also "bolsters the case for not embarking on a more aggressive rate cut cycle, as does the fact that wage growth is not decelerating at a pace that would make a stronger case for a further rate cut".
Currency analyst Chris Turner at ING says the last ECB meeting before the summer break is "unlikely to drive markets", with the governing council expected to "probably be happy with current market pricing of further 25bp rate cuts in September and December and will prefer not to move the needle today".
He notes the EUR/USD is "starting to show some resilience", which "may also be down to creeping uncertainty in the market over what a possible Trump presidency could mean for the dollar after all".
Energy regulator's plans
Shares in National Grid PLC (LON:NG) and SSE PLC (LON:SSE) are also moving in reaction to energy watchdog Ofgem's decision on the financial framework for the next regulatory period starting in 2026.
NG was up earlier but is now flat, while SSE fell initially then rose but the gains are being pared.
The Sector Specific Methodology Document (SSMD) sets the rules for the so-called RIIO3 period from April 2026 through to March 2031 for electricity and gas transmission as well as gas distribution.
Analysts at Barclays (LON:BARC) say the key point is the cost of equity, which has initially been set by Ofgem in a range of 4.57-6.35%, so the midpoint of 5.43% is "slightly light" compared to the consensus forecast of 5.75%.
This is the early view from Ofgem, with the submission date for companies' business plans in mid-December, followed by draft determinations from Ofgem in June/July 2025 with a final decision late next year.
UK investors investing more (mostly overseas) says AJ Bell
AJ Bell PLC shares are up 4.5% as the investment platform said there has been an uptick in dealing activity by retail investors, but it added that this was mostly investors have been buying overseas shares more than UK ones.
International dealing activity was "particularly strong" said boss Michael Summersgill, adding recent stock market performance has boosted confidence among small investors.
Total platform customers increased by 25,000 to 528,000, net inflows were 55% up at £1.7 billion with assets under administration at a record of £83.7 billion or 20% higher than a year ago.
As a reminder, AJ Bell's larger rival, Hargreaves Lansdown (LON:HRGV), said it "would be willing" to recommend a takeover offer from a consortium led by private equity firm CVC Advisers - though there have been objections raised.
SSE and Dunelm updates
Elsewhere in the FTSE 100 reporters today, renewable power generator SSE PLC provided a trading update where it restated its growth targets, stating that the Labour government’s clean energy policies will be supportive of its forecasts.
Shares fell initially but now are up 0.8%.
Chief financial officer Barry O’Regan says in the update: "The outlook is supported by the enhanced clean power target of the new UK government which recognises the essential need for investment in renewables, flexible power and electricity networks - areas where SSE has unrivalled capability and significant growth potential."
In the FTSE 250, Dunelm Group PLC is the top riser, up 6% on the back of an update where the home furnishings retailer said it expects full-year profit before tax to come in “slightly ahead of expectations”.
The company noted increased sales volumes in the final quarter of its 2024 financial year, with total sales edging up 5%, meaning full-year sales grew 4%, while margins improved by 1.7% due to lower year-on-year freight rates.
Dunelm (LON:DNLM) expects the consumer outlook to improve in the year ahead, but warned that “the impact and timing on our markets remains unpredictable”.
FTSE zooms higher
The FTSE 100 has zoomed up 74 points in early trades, climbing 0.9% to 8,263.
Sportswear and fashion retailer Frasers Group PLC is up 7%, topping the blue-chips, as its results seem to have impressed.
Diploma PLC (LON:DPLM) is bottom of the list, down 3% after its third-quarter update, which looks fine ("strong Q3 performance in-line with our expectations, continuing into the final quarter"), but its shares hit an all-time high earlier this week, so this may just be some profit taking.