Stocks up but pound flags against dollar strength

Stocks in London ended in positive territory as technology shares rallied, while the dollar continued to make progress after strong US inflation figures.

The FTSE 100 index closed up 83.88 points, 0.8%, at 10,835.47. The FTSE 250 ended 178.39 points higher, 0.7%, at 24,925.04, and the AIM all-share added 4.75 points, 0.6%, at 764.29.

In Europe, the CAC 40 in Paris rose 0.7%, while the DAX 40 in Frankfurt climbed 1.2%.

In the US, equity markets were higher across the board. Around the time of the London equities close on Wednesday, the Dow Jones Industrial Average was up 0.1%, the S&P 500 was 1.2% higher, while the Nasdaq Composite jumped 1.9%.

US technology stocks rallied after well-received results from CoreWeave and ahead of Anthropic’s initial public offering which is likely next week.

Shares in neo-cloud CoreWeave leapt 24% after it reported results ahead of guidance, raised its outlook and looked to assuage financing concerns when it delivered third quarter results after the US equity market close on Tuesday.

“We feel confident in our ability to fund our business for growth even in the current macroeconomic conditions,” chief financial officer Nitin Agrawal told analysts on the earnings call following the earnings.

“We are not a growth at all cost business,” he added.

David Morrison, analyst at Trade Nation, said the news provided “welcome relief for AI-adjacent companies, and investors, amid a difficult period”.

Chip makers Nvidia, Advanced Micro Devices and Intel were all in demand, up 4.5%, 7.1% and 8.5% respectively, while computer memory and data storage firm Micron Technology leapt 12%.

In London, technology investor Polar Capital Technology Trust ended up 4.0% and Computacenter, which has a major data centre and IT infrastructure business, advanced 4.7%.

Elsewhere, the dollar continued to gain ground after Tuesday’s hot US inflation print and a bunch of “hawkish” words from Federal Reserve officials.

After Federal Reserve governor Christopher Waller told a conference in London on Tuesday that he was minded to vote for a 50 basis point rate hike in December should inflation continue to rise, other Fed officials took to the airwaves.

Dallas Fed president Lorie Logan said two quick 25-basis point rate hikes were needed, Philadelphia Fed president Anna Paulson said she wants gradual rate hikes and Chicago Fed president Austan Goolsbee warned of a “real inflation issue”.

Goldman Sachs added another 25-basis point rate hike to its forecast for March next year, having already pencilled in an increase of the same size at the December meeting.

A “hike could come earlier in January, but we think March is a bit more likely because we expect the November and December inflation reports to be softer but then expect larger start-of-the-year price increases amidst ongoing cost pressures to boost inflation in January”, Goldman analysts wrote.

The pound was quoted at 1.3284 dollars late Wednesday afternoon, down from 1.3323 dollars at the same time on Tuesday. Against the euro, sterling firmed to 1.1974 euros from 1.1949 euros.

The euro was lower at 1.1095 dollars from 1.1150 dollars late Tuesday. Against the yen, the dollar was higher at 159.83 yen from 158.79 yen.

US bond markets are closed Wednesday in observance of Veterans’ Day.

Meanwhile, oil prices moved higher after Iranian security chief Mohsen Rezaei threatened on Wednesday to strike US bases beyond the Middle East, including in Europe, if they were used for attacks against the Islamic republic.

“If American aircraft take off from an American military base, even one located in a European country or some other distant region, to bomb Iran, we will strike those bases as well,” Mr Rezaei said in an interview with Lebanon’s Al Mayadeen TV.

The oil price had fallen sharply since the US midterm elections on hopes that an agreement between the US and Iran can be reached.

Brent oil was trading at 94.03 dollars a barrel on Wednesday, higher than 91.74 dollars late Tuesday.

The gains supported BP, up 2.7%, and Ithaca Energy, up 2.1%.

In London, Bloomberg reported that the UK Government is unwilling to accept automatic alignment of British financial services regulations with those of the EU, citing UK officials.

Under the proposed mechanism, the UK would automatically adopt EU regulations in certain sectors. However, Prime Minister Andy Burnham’s government is seeking to preserve the City of London’s regulatory independence and does not want financial services included in any such arrangement.

The Labour Government is negotiating closer ties with the EU, potentially including regulatory alignment in areas such as agriculture and energy. However, British officials have told their European counterparts that extending the arrangement to financial services is a red line, according to people familiar with the discussions cited by Bloomberg.

On the FTSE 100, Spirax gained 3.6% after reiterating its full-year guidance, supported by stronger organic sales growth and improved profit margins.

The thermal energy and fluid technology specialist said organic sales growth and adjusted operating profit margin in the four months to October 31 improved compared with the first half, while performance for the first 10 months of 2026 remained in line with expectations.

On the FTSE 250, Asos soared 6.9% as Investec upgraded the retailer to ‘buy’ from ‘hold’, while Funding Circle rose a further 6.8%, after Tuesday’s raised guidance.

Heading south, Taylor Wimpey fell 4.5% as it guided for full-year adjusted operating profit at the bottom end of the consensus range, and trimmed its completions outlook, after a “subdued” autumn selling season.

“The housing market has remained challenging during the autumn selling season with increasing mortgage rates placing further pressure on affordability during this period,” the High Wycombe-based housebuilder said in a trading statement.

RBC Capital Markets analyst Anthony Codling said: “Mortgage rates are doing to Taylor Wimpey what build cost inflation did in 2022: eroding the demand just as the supply is rising.”

“Outlets are up, strategic conversion has surged, but demand is down – it’s all dressed up with nowhere to sell,” he added.

ITV fell 3.5% as it said it was cutting costs by £30 million after reporting lower-than-forecast advertising sales in its third quarter.

ITV chief executive Dame Carolyn McCall said demand for advertising in the second half of 2026 has weakened.

“This is due to continuing broader macroeconomic uncertainty, increased digital advertising on global streaming platforms and the impact of less healthy food regulations which came into effect on October 1 2025,” she explained.

The latter includes a ban on advertising identifiable less-healthy food and drink products on TV and on-demand programme services between 5.30am and 9pm.

Gold was quoted at 4,000.66 dollars an ounce on Wednesday, lower than 4,025.90 dollars on Tuesday.

The biggest risers on the FTSE 100 were Computacenter, up 220.00p at 4,928.00p, Polar Capital Technology Trust, up 22.50p at 590.00p, Spirax Group, up 265.00p at 7,620.00p, Halma, up 94.00p at 3,564.00p and BP, up 14.80p at 567.00p.

The biggest fallers on the FTSE 100 were JD Sports Fashion, down 2.94p at 94.66p, Babcock International Group, down 22.00p at 1,040.00p, GSK, down 30.00p at 1,887.00p, Associated British Foods, down 25.00p at 1,984.00p and Kingfisher, down 4.20p at 369.90p.

Thursday’s global economic events calendar has UK gross domestic product, industrial production, manufacturing production and trade figures. This is followed by US initial jobless claims and existing home sales data.

Thursday’s local corporate calendar has half-year results from luxury goods brand Burberry, water provider United Utilities and private equity and infrastructure investment firm 3i Group. Aerospace and defence company Rolls-Royce updates on trading.

Contributed by Alliance News