Sterling at $1.31 on US rate cut bets, UK PMI figures beat hopes
10:25 , Graeme Evans
The pound’s advance continued today, standing above $1.31 at its best level since March 2022 as traders bet on a series of interest rate cuts in the US.
Robust figures on the UK economy also helped sterling after the latest PMI readings from the services and manufacturing sectors both beat hopes. The overall score of 53.4 compared with City forecasts of 52.9.
Last night’s minutes of July’s Federal Reserve meeting cemented the case for a September cut, particularly as some policymakers favoured an immediate reduction.
Talk of a percentage point of policy easing this year will be tested tomorrow when Fed chair Jerome Powell addresses the annual gathering of central bankers at Jackson Hole.
The rate cut expectations have helped the S&P 500 index return to within 1% of its record high as the volatility of early August fades from view.
The calmer mood was today reflected in the FTSE 100 index, which pushed 0.3% or 26.26 points higher at 8309.69. The UK-focused FTSE 250 consolidated yesterday’s 1% advance by adding 1.32 points to 21,188.51.
In the top flight, United Utilities shares rose 16.4p to 989.6p after UBS upgraded to a “Buy” recommendation with 1150p target price. The bank believes the North West-based supplier’s draft Ofwat determination “is very close” to a level that supports the dividend.
Other blue-chip risers included Burberry, although the rise of 11p to 706.4p appears too late to prevent the luxury goods group’s relegation in next month’s FTSE 100 reshuffle.
On the fallers board, Legal & General reversed 2% or 3.9p to 227.15p as shares began trading without the right to the latest dividend.
JD Sports warns on volatile outlook as UK sales fall
09:16 , Simon Hunt
JD Sports is still struggling to retain customer demand in the UK as the country’s biggest sports fashion retailer posted another quarter of falling sales.
The Manchester-based business, which recently acquired US retailer Hibbetts in a $1 billion deal, posted a 0.8% decline in sales in the UK in the 13 weeks to August, adding to a 6.4% decline in the previous quarter.
Turnover outside the UK performed better, with US sales rising as much as 5.7% and global sales rising 2.4% on a like-for-like basis.
“The global macro environment remains volatile and so we continue to be cautious on our outlook for the rest of the year,” JD said, adding it was preparing for a financial knock of around £15 million due to the stronger pound.
JD Sports shares rose 3.1% to 132p. The stock remains down by nearly a fifth since the start of the year.
JD Sports higher in steady FTSE 100, Unilever among risers
08:35 , Graeme Evans
JD Sports Fashion shares lead the FTSE 100 index after the retailer reported an improved trading performance in the second quarter.
The stock rose 2.85p to 131p as like-for-like sales improved by 2.4%, leading to growth of 0.7% in the first half of the financial year.
Other stronger blue-chip stocks included Unilever, which lifted 64p to 4797p, and United Utilities after a rise of 13.4p to 986.6p.
The biggest faller was Legal & General, which lost 2% or 5.3p to 225.7p after the shares went ex-dividend.
The FTSE 100 index rose 12.85 points to 8296.28 while the FTSE 250 drifted 41.90 points to 21,145.29, having outperformed yesterday with a rise of 1%.
Hays shares fell 1.7p to 93.3p following the publication of full-year results.
Hays upbeat despite profits slide
07:33 , Graeme Evans
Recruitment firm Hays today posted a 50% slide in underlying profits to £94.7 million, reflecting low confidence levels and a longer-than-normal time-to-hire.
The downturn affected its three largest markets of Germany, Australia and the UK as net fees fell 12% to £1.1 billion in the year to 30 June.
It responded to the “increasingly challenging” market conditions by driving productivity and focusing on the delivery of £60 million of annualised savings.
Hays said trading in July and August has been in line with expectations, while it is too early to assess trends heading into the key trading month of September.
Chief executive Dirk Hahn said key markets are being driven by powerful, supportive megatrends and remain characterised by significant talent shortages.
He added: “Our actions are better positioning Hays to benefit when markets recover, and when they do, we can return to, and then exceed, prior peak profits.”
Hays announced an unchanged dividend of 3p a share.
FTSE 100 seen lower, Brent Crude continues retreat to $76
07:11 , Graeme Evans
Wall Street markets finished higher last night after the minutes of July’s Federal Reserve meeting boosted the prospect of a September interest rate cut.
Rates were kept on hold at the meeting but some policymakers said they were willing to act immediately because they feared “acting too little or too late”.
The S&P 500 index closed 0.4% higher and the Nasdaq Composite up by 0.6%, while the Dow Jones Industrial Average edged into positive territory.
The minutes kept up pressure on the US dollar, which has been at a seven month low against a basket of currencies. The pound this morning stood at $1.3084.
Oil prices continue to retreat, with Brent Crude near its lowest level of the year at $76.02 a barrel. The FTSE 100 index closed 10 points higher yesterday and is forecast to start today’s session down 14 points to 8270.