The FTSE 100 edged higher on Wednesday, with gains in Next and mining stocks offsetting a drag from lower Asia-focused finance stocks.
The FTSE 100 index closed up 8.92 points, 0.1%, at 10,888.30. The FTSE 250 ended up 173.33 points, 0.7%, at 24,632.63, while the AIM All-Share closed up 7.42 points, 1.0%, at 781.78.
Brighter economic data gave London a lift with the UK services PMI business activity index, issued by S&P Global, rising to 52.1 points in July from 48.8 in June, above the flash estimate of 51.8.
New business increased for the first time since February, supported by stronger demand for technology services and tentative signs of a recovery in consumer spending.
The UK composite PMI output index, combining manufacturing and services, rose to 52.2 points from 49.3 in June, also slightly above the flash estimate of 52.1. Earlier this week, data showed the UK manufacturing PMI eased to 51.9 in July from 52.5 in June.
Rob Wood, chief UK economist at Pantheon Macroeconomics, said the PMI signal is “remarkably healthy”, and the fractional upward revision to the flash release “surprising”, given oil prices rising in July as US-Iran hostilities restarted.
The pound traded at 1.3466 US dollars on Wednesday afternoon, up from 1.3445 dollars at the equities close on Tuesday. Against the euro, sterling fell to 1.1663 euro from 1.1674 euro.
The euro stood higher at 1.1545 dollars against 1.1517 dollars. Against the yen, the dollar was little changed at 157.58 yen, compared to 157.56 yen.
Oil prices continued to edge lower as investors weighed the chances of a US-Iran deal to reopen the Strait of Hormuz.
Brent oil for October delivery traded lower at 79.47 dollars a barrel on Wednesday afternoon, from 80.60 dollars late Tuesday.
In European equities on Wednesday, the CAC 40 in Paris closed up slightly, while the DAX 40 in Frankfurt ended 0.3% lower.
Stocks in New York were mostly higher. The Dow Jones Industrial Average was up 0.9%, the S&P 500 index was 0.2% higher, and the Nasdaq Composite was little changed.
The yield on the US 10-year Treasury narrowed to 4.63% on Wednesday from 4.64% on Tuesday. The yield on the US 30-year Treasury fell to 5.17% from 5.20%.
Back in London, Next gained 5.7% as it raised profit guidance once again.
The Leicester-based clothing and homewares retailer, led by chief executive Simon Wolfson, has made a habit of under-promising and over-delivering, giving 19 profit guidance upgrades since the start of financial 2024 before Wednesday’s made it 20.
In a trading statement, Next said full price sales were up 9.2% in the 13 weeks to August 1, the second quarter of its financial year, compared with the year prior, “materially” ahead of its 4% prior growth forecast.
JPMorgan analyst Georgina Johanan said: “We think this compares to investor expectations for (greater than) 6%, and is certainly at the very upper end of expectations.”
Online international growth led the way, with revenue up 37% on-year, while revenue in the UK was up a more modest 2.8%.
Next put the strong sales down to the weather in the UK being as warm as last year, the release of some pent-up demand in the Middle East and Northern Europe after a weaker first quarter, and more profitable marketing than anticipated.
AJ Bell investment director Russ Mould said Next’s playbook as a public company “looks simple on the face of it but its ability to pull off the under-promise and over-deliver trick time after time is anything but”.
Rising metal prices boosted miners for the second day in a row, with upbeat results from Glencore adding to the positive mood.
Gold was higher at 4,255.64 dollars an ounce on Wednesday from 4,078.23 dollars on Tuesday. The price of silver rose 4.9%, and copper increased 0.9%.
Gold miners Endeavour Mining and Fresnillo climbed 5.7% and 4.5%, while Glencore added 4.1%.
Glencore declared a special dividend and announced a new share buyback, along with plans for an Australian listing.
In a research note, JPMorgan analyst Dominic O’Kane said the creation of an Australian secondary listing will reignite expectations of “corporate optionality, including M&A and a coal de-merger”.
Holding the FTSE 100 back were losses in Asia-focused financial stocks, with Prudential, HSBC and Standard Chartered down 6.4%, 4.7% and 1.6% respectively.
Caixin Global reported that Chinese mainland tax authorities have started levying personal income tax on the returns of offshore insurance policies, closing a longstanding regulatory loophole.
This follows July’s move by China’s Ministry of Finance to materially tighten personal income tax rules governing offshore trusts.
Citigroup banking analyst Andrew Coombs noted the impact on sentiment from the headlines but thinks the eventual impact on earnings is likely to be small.
Mr Coombs had earlier downgraded HSBC to “neutral” from “buy”, and thinks it is time to “take a pause” on the stock with shares up 40% year-to-date.
“For a further re-rating from here we believe one needs to believe in a period of more rapid top-line growth and while there are some encouraging signs, we believe this will take time to materialise,” Mr Coombs wrote in a research note.
On the FTSE 250, 4Imprint led the way, up 11%, after it said it expects full-year revenue and earnings to come in above current market expectations after an encouraging first half of 2026.
Among smaller companies, B90 Holdings climbed 3.5%.
The online gaming firm said first-half trading had been strong and now expects revenue to exceed market expectations.
It added that first-half Ebitda should be broadly comparable with the prior year despite continued investment in technology, with its iGaming business continuing to provide a profitable base.
The biggest risers on the FTSE 100 were Next, up 850p at 15,660p; Endeavour Mining, up 206p at 3,842p; Fresnillo, up 118p at 2,747p; Glencore, up 22.7p at 573.3p; and Coca-Cola HBC, up 189p at 5,015p.
The biggest fallers on the FTSE 100 were Prudential, down 70p at 1,025p; HSBC, down 74p at 1,510.6p; Autotrader, down 15.2p at 520p; Convatec, down 5.6p at 223.8p; and Vodafone, down 2.5p at 114.4p.
Thursday’s economic calendar has a bunch of construction PMI prints, including the UK at 9.30am. US weekly initial jobless claims figures are also due for release, along with eurozone retail sales data and German factory orders figures.
Thursday’s UK corporate calendar has half-year results from insurer Admiral and housebuilder Persimmon plus full-year results from Guinness owner Diageo.
Contributed by Alliance News.