London close: Stocks finish higher amid global recovery

London's stock markets closed higher on Wednesday, buoyed by positive global sentiment following remarks from the Bank of Japan.

The FTSE 100 rose 1.75%, ending the day at 8,166.88 points, while the FTSE 250 gained 1.02%, closing at 20,576.03 points.

Investor confidence was bolstered by comments from Bank of Japan governor Shinichi Uchida, who reassured markets about the stability of Japan’s monetary policy overnight, easing fears of global financial instability.

In currency markets, sterling was last up 0.16% on the dollar, trading at $1.2711, as it strengthened 0.25% against the euro, changing hands at €1.1639.

“The disorderly selloff of Monday’s session has been replaced with more gains for stocks and a continued decline in the volatility index, a sign that things continue to calm down,” said IG chief market analyst Chris Beauchamp.

“The light macro and earnings calendar this week has proved to be an unexpected blessing, giving investors space to reassess their outlook on the next few months.

“However, it might not take much to tip them into risk off mode again, particularly if signs of a fresh unwind in the yen trade rear their head.”

Beauchamp noted that oil prices hit six-month lows at the start of the week, despite signs that geopolitical tension in the Middle East could boil over into all-out war.

“While an Iranian strike on Israel still seems likely, today’s sharp drop in US inventories has been behind the surge in WTI and Brent this afternoon.

“The US economy might be closer to a recession than it was a week ago, but oil demand isn’t currently flashing any warning signals.”

BoJ deputy reassures global markets, UK house prices rise in July

The Bank of Japan's deputy governor, Shinichi Uchida, helped to calm global markets overnight, addressing recent market turbulence by assuring that the central bank would not raise interest rates amid financial instability.

Following a sharp sell-off in equities earlier this week, Uchida emphasised the need to maintain the current policy rate, citing extreme volatility in global financial markets.

Uchida also noted that the BoJ's stance could shift if market volatility impacted Japan's economic outlook, price stability, or its ability to achieve the 2% inflation target.

On home shores, UK house prices saw a notable increase in July after three stagnant months.

According to lender Halifax, prices rose by 0.8% from the previous month, surpassing expectations of a 0.3% rise.

On an annual basis, house prices grew by 2.3% in July, up from a 1.9% increase in June, marking the highest annual growth rate since January 2024.

The average house price in the UK reached £291,268, up from £289,042 in June.

“Last week’s Bank of England Base Rate cut, which follows recent reductions in mortgage rates, is encouraging for those looking to remortgage, purchase a first home or move along the housing ladder,” said Amanda Bryden, head of mortgages at Halifax.

“However, affordability constraints and the lack of available properties continue to pose challenges for prospective homeowners.

“Against the backdrop of lower mortgage rates and potential further Base Rate reductions, we anticipate house prices to continue a modest upward trend throughout the remainder of this year.”

On the continent, Germany's industrial production experienced a partial recovery in June, driven by a significant rebound in the auto sector.

According to Destatis, total industrial output rose by 1.4% month-on-month, exceeding economists' forecasts of a 0.9% increase.

However, over the second quarter, overall production fell by 1.3% compared to the previous quarter, with a downward revision of May's figures to a 3.1% decline.

On a yearly basis, production dropped by 4.1%.

Despite the broader decline, manufacturing output grew by 1.5% in June, with auto production surging by 7.5% after a sharp drop the previous month.

Energy production also increased by 2.9%, while construction output saw a slight decline of 0.3%.

Banks on the front foot, WPP falls on revenue guidance downgrade

On London’s equity markets, banks were on the front foot, with Standard Chartered rising by 2.79%, NatWest Group up 3.08%, Barclays gaining 3.15%, Lloyds Banking Group increasing by 3.34%, and HSBC Holdings advancing by 1.76%.

Vodafone Group added 3.92% after announcing a share buyback programme worth up to €500m (£430m).

Commodities trader Glencore reversed earlier losses, ending the day up 2.81%, despite reporting a drop in half-year profits.

The company’s decision to maintain its coal and carbon steel business appeared to help stabilise its share price.

Financial services company Legal & General Group advanced by 1.29% after reporting interim operating profits that exceeded analyst expectations, driven by strong annuity sales.

TP ICAP Group surged 7.82% following the launch of a third share buyback programme worth £30m, and reporting a 10% rise in interim adjusted pre-tax profit.

Similarly, Quilter rose 4.63% after posting record first-half adjusted profits.

In the consumer sector, Entain, the owner of Ladbrokes, rallied 3.93% ahead of its interim results, while housebuilder Persimmon increased by 2.46%, benefiting from the positive housing market update from Halifax.

Brick maker Ibstock climbed 4.3%, despite reporting a slump in first-half profits, as it expressed cautious optimism about medium-term prospects under the new Labour government's house-building plans.

On the downside, advertising giant WPP fell 2.06% after lowering its full-year revenue growth forecast due to challenges in China and project-related businesses, as well as a broader uncertain macroeconomic environment.

Coca-Cola HBC dipped 1.53% despite raising its full-year guidance following a strong first half, while insurer Hiscox declined 1.8%, even after reporting a rise in first-half pre-tax profit amid a more challenging loss environment.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,166.88 1.75%
FTSE 250 (MCX) 20,576.03 1.02%
techMARK (TASX) 4,766.11 1.32%

FTSE 100 - Risers

Entain (ENT) 526.20p 3.93%
Vodafone Group (VOD) 73.20p 3.92%
Pershing Square Holdings Ltd NPV (PSH) 3,618.00p 3.73%
NATWEST GROUP (NWG) 334.60p 3.59%
Lloyds Banking Group (LLOY) 57.00p 3.34%
Standard Chartered (STAN) 709.80p 3.32%
Barclays (BARC) 214.75p 3.15%
Ashtead Group (AHT) 5,230.00p 3.14%
Phoenix Group Holdings (PHNX) 535.00p 2.98%
Rentokil Initial (RTO) 465.50p 2.85%

FTSE 100 - Fallers

WPP (WPP) 703.00p -1.95%
InterContinental Hotels Group (IHG) 7,274.00p -1.84%
Coca-Cola HBC AG (CDI) (CCH) 2,706.00p -1.24%
easyJet (EZJ) 418.90p -1.23%
Rightmove (RMV) 518.40p -1.11%
Burberry Group (BRBY) 692.00p -0.57%
Sage Group (SGE) 1,014.50p -0.34%
Whitbread (WTB) 2,823.00p -0.25%
Antofagasta (ANTO) 1,816.50p -0.25%
International Consolidated Airlines Group SA (CDI) (IAG) 164.50p -0.21%

FTSE 250 - Risers

TP Icap Group (TCAP) 227.50p 7.82%
Quilter (QLT) 133.40p 4.63%
CMC Markets (CMCX) 304.00p 4.47%
Ibstock (IBST) 179.60p 4.30%
Hilton Food Group (HFG) 909.00p 4.00%
Target Healthcare Reit Ltd (THRL) 83.20p 4.00%
IG Group Holdings (IGG) 915.00p 3.92%
Alpha Group International (ALPH) 2,400.00p 3.42%
Wood Group (John) (WG.) 133.20p 3.42%
International Workplace Group (IWG) 172.10p 3.36%

FTSE 250 - Fallers

Abrdn (ABDN) 151.50p -4.54%
WH Smith (SMWH) 1,216.00p -2.64%
4Imprint Group (FOUR) 5,490.00p -2.31%
Hiscox Limited (DI) (HSX) 1,148.00p -1.80%
Wizz Air Holdings (WIZZ) 1,423.00p -1.79%
ICG Enterprise Trust (ICGT) 1,238.00p -1.75%
FirstGroup (FGP) 158.00p -1.74%
Auction Technology Group (ATG) 455.00p -1.73%
Close Brothers Group (CBG) 471.40p -1.71%
Domino's Pizza Group (DOM) 282.40p -1.60%