LONDON (ShareCast) - (Sharecast News) - London's stock markets ended the day with strong gains on Wednesday, driven by robust performances in the mining and energy sectors.

The FTSE 100 climbed 1.13%, closing at 8,367.98 points, while the FTSE 250 rose by 0.78%, finishing at 21,600.71 points.

In currency markets, sterling was last down 0.05% on the dollar to trade at $1.2829, as it decreased 0.02% against the euro, changing hands at €1.1866.

"UK stocks are once again hot property, with the FTSE 100 leaping to its highest level since late May," said IG chief market analyst Chris Beauchamp.

"Between them, index heavyweights Shell and HSBC have added 30 points to the index's gains for the day, the former powering higher as oil prices rebound on heightened tensions in the Middle East.

"The latter's new buyback has powered the shares to their biggest one-day gain since late April, with China stimulus hopes providing additional impetus."

Beauchamp added that Microsoft "paid the price" for its current lofty valuation overnight, while AMD's bullish outlook fired up investors.

"But with Meta, Amazon and Apple earnings still to come, plus the Fed decision, there is still some caution about the short-term outlook for the tech sector overall."

Eurozone inflation ticks higher, US private sector employment growth falls short

In economic news, eurozone inflation ticked higher in July, reaching an annual rate of 2.6%, slightly above expectations and June's 2.5%, according to Eurostat's flash estimate.

The increase, surpassing the European Central Bank's (ECB) 2% target, could prompt the ECB to reassess its future rate cuts.

Core inflation remained steady at 2.9% for the third consecutive month.

While services and food inflation eased slightly, energy prices rose by 1.3% year-on-year, contributing to the overall inflationary pressure.

"The rise in headline CPI (is) the third such reading in the past six-months. The final stretch back down to 2% remains a difficult hurdle to overcome, and today's report will likely create jitters for those expecting a September rate cut that is currently being priced at a 68% chance," said Scope Markets analyst Joshua Mahony.

In Germany, unemployment rose more than anticipated in July, reflecting ongoing economic struggles.

The Bundesagentur für Arbeit reported a seasonally adjusted jobless rate of 6%, the highest since May 2021.

Total unemployed increased by 18,000 to 2.8 million, marking the 19th consecutive month of rising unemployment.

The increase outpaced economists' expectations of a 15,000 rise, highlighting the challenges posed by high energy costs, weak global demand, and elevated interest rates.

Across the Atlantic, US private sector employment growth in July fell short of forecasts, with ADP reporting an increase of 122,000 jobs, below the expected 150,000.

Small businesses shed 7,000 jobs, while medium and large businesses added 70,000 and 62,000 jobs, respectively.

The service sector contributed 85,000 new jobs, and the goods-producing sector added 37,000.

Wage growth showed signs of slowing, with job-stayers seeing a 4.8% annual pay increase, the slowest in three years, and job-changers experiencing a significant drop in pay gains to 7.2% from 7.7%.

"With wage growth abating, the labour market is playing along with the Federal Reserve's effort to slow inflation," said Nela Richardson, chief economist at ADP.

"If inflation goes back up, it won't be because of labour."

In the US housing market, pending home sales rose in June for the first time in three months, driven by improved supply and slightly lower mortgage rates.

The National Association of Realtors reported a 4.8% month-on-month increase in the pending home sales index, exceeding expectations of a 1.5% rise.

However, on an annualised basis, pending sales were down 2.6%.

In Japan, the central bank raised its key interest rate to 0.25%, marking only the second increase in 17 years as it moved to tighten monetary policy.

The Bank of Japan also announced plans to phase out its extensive bond-buying program, signalling a retreat from a decade of stimulus measures.

That followed a previous rate hike in March, marking Japan's gradual exit from negative interest rates.

Miners and oil firms in the green, GSK falls

On London's equity markets, there were significant gains in the mining sector, with Antofagasta rising 4.58%, followed by Anglo American, up 3.4%, and Glencore, which gained 3.23%.

The increases were driven by a rise in copper prices, as Rio Tinto also performed well, adding 2.48% after reporting a 1.8% increase in first-half profit.

Oil majors BP and Shell surged, gaining 1.32% and 2.46% respectively, as oil prices climbed amid escalating Middle Eastern tensions.

FTSE 250 counterparts Harbour Energy and Diversified Energy Company also benefited, rising 3.19% and 1.9%.

Essentra jumped 6.61% as it continued to rally after reporting a return to growth in its second quarter and maintaining full-year expectations.

HSBC Holdings was another standout, up 4%, following the announcement of a $3bn share buyback and better-than-expected interim profits in its last results under chief executive officer Noel Quinn.

Taylor Wimpey gained 0.73% despite reporting a drop in first-half profits, as the housebuilder revised its full-year completions forecast to the higher end of expectations.

Shaftesbury Capital edged up 0.13% after positive interim results, and Just Eat Takeaway rose 8.42% after backing its 2024 guidance and announcing a €150m share buyback.

Rathbones Group advanced 5.81%, buoyed by a jump in first-half profit and progress following its merger with Investec Wealth & Investment.

Spectris also saw gains, up 2.84% after receiving an upgrade from JPMorgan Cazenove.

On the downside, GSK slipped 2.07%, despite raising its annual forecast and delivering better-than-expected second-quarter results, driven by strong performances in its cancer and HIV treatment divisions.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,367.98 1.13%
FTSE 250 (MCX) 21,600.71 0.78%
techMARK (TASX) 4,834.80 0.89%

FTSE 100 - Risers

Antofagasta (ANTO) 2,020.00p 4.58%
HSBC Holdings (HSBA) 704.00p 4.00%
Intermediate Capital Group (ICG) 2,196.00p 3.49%
Ashtead Group (AHT) 5,602.00p 3.36%
Spirax Group (SPX) 9,015.00p 3.31%
Anglo American (AAL) 2,350.00p 3.21%
Glencore (GLEN) 429.80p 3.17%
Halma (HLMA) 2,649.00p 2.94%
Shell (SHEL) 2,840.00p 2.66%
Flutter Entertainment (DI) (FLTR) 15,375.00p 2.53%

FTSE 100 - Fallers

Smurfit Westrock (DI) (SWR) 3,451.00p -4.40%
InterContinental Hotels Group (IHG) 7,840.00p -2.95%
GSK (GSK) 1,512.00p -1.98%
easyJet (EZJ) 450.60p -1.79%
Convatec Group (CTEC) 236.80p -1.26%
Vodafone Group (VOD) 72.44p -0.96%
Marks & Spencer Group (MKS) 328.30p -0.91%
Hikma Pharmaceuticals (HIK) 1,918.00p -0.83%
Sainsbury (J) (SBRY) 275.40p -0.79%
Imperial Brands (IMB) 2,144.00p -0.79%

FTSE 250 - Risers

Rathbones Group (RAT) 1,898.00p 7.49%
Essentra (ESNT) 171.00p 6.61%
Auction Technology Group (ATG) 507.00p 5.74%
Indivior (INDV) 1,070.00p 5.73%
Elementis (ELM) 159.80p 5.55%
Renishaw (RSW) 3,795.00p 5.42%
Mony Group (MONY) 238.00p 5.03%
CMC Markets (CMCX) 333.50p 3.57%
HGCapital Trust (HGT) 540.00p 3.45%
FirstGroup (FGP) 175.40p 3.36%

FTSE 250 - Fallers

PPHE Hotel Group Ltd (PPH) 1,420.00p -2.41%
Inchcape (INCH) 843.00p -1.92%
Carnival (CCL) 1,205.50p -1.83%
Kainos Group (KNOS) 1,098.00p -1.79%
St James's Place (STJ) 685.00p -1.72%
Wizz Air Holdings (WIZZ) 1,913.00p -1.59%
RHI Magnesita N.V. (DI) (RHIM) 3,650.00p -1.48%
Mitchells & Butlers (MAB) 311.50p -1.43%
Ibstock (IBST) 183.60p -1.29%
Workspace Group (WKP) 612.00p -1.29%

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