LONDON (ShareCast) - (Sharecast News) - London equities ended Wednesday narrowly mixed as investors weighed stronger-than-expected US economic data against a wave of corporate earnings that failed to inspire.
The FTSE 100 index closed effectively flat, inching up by just 0.01% to 9,136.94, while the FTSE 250 slipped 0.08% to 21,776.58.

In currency markets, sterling weakened 0.49% on the dollar to trade at $1.3286, while it gained 0.24% against the euro, changing hands at €1.1591.

Sentiment was dampened by a lacklustre response to updates from major UK corporates including Taylor Wimpey, HSBC and BAE Systems, alongside global caution ahead of key economic and monetary policy decisions.

"Investors got out of the wrong side of the bed, judging by the negative reaction to the latest round of corporate earnings," said Russ Mould, investment director at AJ Bell.

US economy, employment data surprises to the upside

In data, the US economy grew at an annualised rate of 3.0% in the second quarter, according to preliminary data from the Bureau of Economic Analysis.

That far outpaced economists' expectations of 2.5%, and marked a sharp rebound from a 0.5% contraction in the first three months of the year.

The BEA attributed the improvement to a pullback in imports and strong consumer spending, although investment and exports declined, with the latter falling 1.8%.

Inflationary pressures appeared to ease, with the headline personal consumption expenditures (PCE) price index up 2.1% year-on-year, and the core PCE rate easing to 2.5% from 3.5%.

"Data on the state of the US economy will show if Trump's tariffs have caused upset domestically," added Mould, ahead of a Federal Reserve decision due later today.

US employment data also surprised to the upside.

ADP reported private sector job gains of 140,000 in July, well above the 78,000 expected.

Pay growth held steady, with job-changers seeing a 7% increase and job-stayers 4.4%.

"Our hiring and pay data are broadly indicative of a healthy economy," said ADP's chief economist Nela Richardson.

In contrast, US mortgage activity remained weak, with applications falling 3.8% last week.

Purchases dropped 6% despite easing interest rates, and refinancing hit its lowest point since May.

Closer to home, the eurozone economy edged up 0.1% in the second quarter, outperforming expectations for flat growth.

France and Spain helped offset a 0.1% quarterly contraction in Germany.

Separately, German retail sales rose 1% in June, beating forecasts and lifting the annual rate to 4.9%.

Taylor Wimpey slides after trimming profit forecast, GSK in the green

On London's equity markets, corporate results drove significant moves in individual stocks.

Taylor Wimpey tumbled 6.25% after trimming its full-year profit forecast by £20m to £424m, citing a one-off remediation charge.

"Even without those factors, life is still an uphill battle," said Mould, pointing to falling average selling prices and soft private sales rates.

HSBC fell 4.54% as a $2.1bn impairment on its stake in China's Bank of Communications and rising credit losses dragged first-half profits below expectations.

Pre-tax profit slid to $15.8bn from $21.5bn a year ago.

"Repositioning HSBC is not a simple task given its size and scale," Mould added, warning of continued challenges in key Asian markets.

BAE Systems dropped 1.98% despite upgrading its sales and earnings guidance for the year.

Investors appeared disappointed by the lack of a substantial earnings per share uplift and reduced buyback expectations.

"Investors have lofty expectations for all defence stocks," said Mould.

"Without a significant upgrade, shares are vulnerable to a bout of profit taking."

Luxury carmaker Aston Martin Lagonda sank 9.71% after it downgraded its full-year outlook, blaming disruption from newly implemented US tariffs.

On the upside, GSK climbed 4.69% after it raised its full-year outlook and reported a 12% rise in core operating profit for the second quarter.

Bodycote surged 12.66% after announcing a £30m extension to its share buyback and reiterating its full-year guidance.

Wizz Air ascended 1.81% after an upgrade to 'buy' from Deutsche Bank.

Looking ahead, investor attention was shifting to the Federal Reserve's policy decision later in the global day, Friday's US jobs report, and an imminent deadline for a decision on US tariffs.

"By Friday night, investors will have a veritable feast of data points and financial results that could help shape their portfolio positioning for the rest of the year," said Mould.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 9,136.94 0.01%
FTSE 250 (MCX) 21,776.58 -0.08%
techMARK (TASX) 5,290.54 0.34%

FTSE 100 - Risers

GSK (GSK) 1,462.50p 4.69%
Pershing Square Holdings Ltd NPV (PSH) 4,194.00p 3.20%
AstraZeneca (AZN) 11,498.00p 3.05%
Spirax Group (SPX) 6,330.00p 2.18%
InterContinental Hotels Group (IHG) 8,848.00p 1.98%
Glencore (GLEN) 311.70p 1.90%
Informa (INF) 870.60p 1.56%
Coca-Cola Europacific Partners (DI) (CCEP) 7,530.00p 1.48%
British American Tobacco (BATS) 3,988.00p 1.37%
Airtel Africa (AAF) 200.80p 1.31%

FTSE 100 - Fallers

Taylor Wimpey (TW.) 100.45p -6.25%
Convatec Group (CTEC) 231.00p -5.48%
HSBC Holdings (HSBA) 926.00p -4.54%
The Sage Group (SGE) 1,200.50p -4.53%
JD Sports Fashion (JD.) 85.90p -3.55%
Kingfisher (KGF) 267.20p -2.55%
Smurfit Westrock (DI) (SWR) 3,521.00p -2.38%
BAE Systems (BA.) 1,785.00p -1.98%
Croda International (CRDA) 2,549.00p -1.89%
Rolls-Royce Holdings (RR.) 988.00p -1.79%

FTSE 250 - Risers

Bodycote (BOY) 645.00p 12.66%
Big Yellow Group (BYG) 941.00p 3.75%
JTC (JTC) 822.00p 3.01%
Bridgepoint Group (Reg S) (BPT) 322.60p 2.94%
Trainline (TRN) 271.20p 2.88%
Lion Finance Group (BGEO) 7,740.00p 2.72%
Carnival (CCL) 2,073.00p 2.52%
Bytes Technology Group (BYIT) 359.80p 2.33%
Rathbones Group (RAT) 1,906.00p 2.25%
Allianz Technology Trust (ATT) 464.00p 1.98%

FTSE 250 - Fallers

RHI Magnesita N.V. (DI) (RHIM) 2,630.00p -10.24%
Aston Martin Lagonda Global Holdings (AML) 71.10p -9.71%
Trustpilot Group (TRST) 243.80p -4.39%
Raspberry PI Holdings (RPI) 425.00p -4.11%
Lancashire Holdings Limited (LRE) 606.00p -3.81%
Pantheon Infrastructure (PINT) 98.80p -3.14%
CMC Markets (CMCX) 228.50p -2.97%
NB Private Equity Partners Ltd. (NBPE) 1,440.00p -2.70%
W.A.G Payment Solutions (WPS) 82.80p -2.59%
Travis Perkins (TPK) 535.00p -2.37%

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