FTSE 100 Live 03 July: Index higher as markets steady, Currys extends strong run

FTSE 100 Live Thursday

• UK assets steady after turmoil
• Currys resumes dividends
• WoS hails US landmark

Market update: FTSE 100 higher as UK assets improve, Currys surges

UK-focused assets today rallied in the FTSE 100 index after Keir Starmer’s backing for chancellor Rachel Reeves brought calm to currency and bond markets.

The Prime Minister said it was “absolutely wrong” to suggest the chancellor’s visibly tearful appearance in the Commons related to this week’s welfare U-turn, which put an almost £5 billion black hole in her plans.

His pledge that Reeves will be in her role for a “very long time to come“ helped the pound steady at $1.3668 while the 10-year bond yield fell back to 4.53%.

Companies exposed to rising borrowing costs benefited from the calmer mood after coming under significant selling pressure yesterday.

They included housebuilder Berkeley, which put back 2% or 70p to 3670p after closing 8% lower last night.

Lloyds Banking Group also added 1.7p to 75.2p and Persimmon rose 21p to 1231.5p as the FTSE 100 index stood 0.5% or 42.88 points higher at 8817.57.

The UK-focused FTSE 250 index followed Wednesday’s 1.3% reverse by adding 0.65% or 138.53 points to 21,519.02.

The mid-cap session saw contrasting results-day fortunes for the retailers Currys and Watches of Switzerland.

Currys shares traded at their highest level in more than three years, up another 9% or 10.8p to 129.3p after the electricals chain resumed dividend payments alongside a 37% rise in adjusted profits to £162 million.

The surplus represented a more than 30% beat versus initial consensus a year ago, highlighting chief executive Alex Baldock’s view the business has “real momentum”.

Analysts at Berenberg said the results were “everything we had hoped for”, having seen the shares rally by 85% over the past year.

Watches of Switzerland also reported an improved trading performance as underlying earnings lifted by 12% to £150 million and revenues in the US passed $1 billion for the first time.

The Rolex and Breitling retailer unveiled record revenues of £1.65 billion, with growth in the US of 16% and 2% in the Mappin & Webb and Goldsmiths UK division.

However, shares fell 5% or 21.8p to 399.8p as investors reacted to current year guidance that included a broadly flat margin performance. Constant currency revenue growth is set to be between 6% and 10%.

FTSE 100 higher as markets steady, Currys up 6%

The FTSE 100 index has risen 0.3%, while the pound and the 10-year bond yield have steadied in the wake of yesterday’s markets turmoil.

Housebuilders and lenders put back some of their losses from the previous session, with Taylor Wimpey up 1.65p to 115p and NatWest up 5p to 478.85p.

The FTSE 100 added 38.44 points to 8813.13, while the FTSE 250 index followed yesterday’s 1.3% slide with a recovery of 0.4% or 79.08 points to 21,531.37.

Currys lifted 6% or 7.5p to a three-year high of 126p after it resumed dividend payments alongside annual results but Watches of Switzerland weakened 5% or 21.8p to 399.8p following its figures.

The pound stood at $1.366 while the 10-year bond yield weakened to 4.54%.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “There’s been a recovery in sentiment for the pound, stocks and UK government debt after scenes in Parliament roiled markets.

“A Chancellor in tears, a backbench revolt, and signs investors are becoming more risk averse to the UK is hardly the way the Prime Minister wanted to mark his first year in office.

“The government is in repair mode, with Keir Starmer backing Rachel Reeves to remain Chancellor into the next election and beyond.

“This is helping restore some calm on bond and currency markets, given that investors need stability and certainty to have the confidence to invest in UK assets.”

Watches of Switzerland earnings rise

Watches of Switzerland today lifted underlying earnings by 12% to £150 million amid a “significant trading improvement“ in the second half of the financial year.

The Rolex and Breitling retailer said its UK business returned to growth while the US division surpassed $1 billion revenue for the first time.

Total sales rose 7% to a record £1.65 billion in the year to 27 April, with growth in the US of 16% and 2% in the Mappin & Webb and Goldsmiths UK division.

Whilst mindful of tariffs and economic uncertainty, the company said it expected constant currency revenue growth of between 6% and 10% in the current year.

The underlying margin is set to be flat or slightly lower than the previous year.

Bond yields in focus amid fears of borrowing surge

The yield on 10-year gilts yesterday touched 4.66% in the biggest rise since President Trump’s Liberation Day announcement in April.

Today’s session opens at 4.61% amid the pressure on UK assets caused by heightened uncertainty over the direction of the public finances.

Deutsche Bank said today: “For markets, the logic is that Rachel Reeves has been a big defender of the fiscal rules, and there’ve been growing calls for these rules to be eased and for borrowing to go up.

“So the concern in bond markets is that a new Chancellor might trigger a fresh wave of borrowing that pushes rates up further.

“Earlier, Prime Minister Starmer refused to confirm whether Chancellor Reeves would stay in post, but much later he said to the BBC that she would remain chancellor "for many years to come" which seems to take away some of the short term pressure.”

Currys resumes dividends after 37% profit rise

Electricals chain Currys said its business had “real momentum” after annual results today showed a 37% rise in adjusted profits to £162 million.

The performance, which was in line with recently upgraded expectations, was built on 4% growth in like-for-like sales in the UK and Ireland division.

The recovery of the company’s Elkjøp brand continued in the Nordics after a flat reading for underlying sales in the year to 3 May. Group revenues of £8.7 billion rose 3%.

The company resumed dividend payments with the award of 1.5p a share, while it said the early part of the new financial year had been in line with expectations.

Chief executive Alex Baldock said: "Currys' performance continues to strengthen and the business has real momentum.”

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S&P 500 hits record ahead of labour market report

The S&P 500 index last night set a fresh record, boosted by President Trump’s announcement of a US-Vietnam trade deal.

The benchmark closed up 0.5% at 6,227.42, while the Nasdaq Composite rose 0.9% and the Dow Jones Industrial Average gave up some of Tuesday’s outperformance.

Attention turns to today’s US labour market report, which is expected to show a drop in non-farm payroll employment to about 100,000 from 140,000 in May. The unemployment rate is seen edging up to 4.3%

FTSE 100 seen higher as pound steadies

The pound has steadied at near to $1.364 after the Prime Minister said Rachel Reeves will be Chancellor for a “very long time to come”.

Keir Starmer said it was “absolutely wrong” to suggest the Chancellor’s visibly tearful appearance in the Commons related to the welfare U-turn, which put an almost £5 billion black hole in her plans.

The FTSE 100 index is seen rising by about 0.3%, boosted by last night’s latest record close for the S&P 500 index in New York.

Stronger mining stocks limited the impact of yesterday’s events on the FTSE 100 index, which lost 10.64 points at 8774.69. The FTSE 250 index fell by 1.3%.

Companies exposed to rising borrowing costs came under significant pressure yesterday, with housebuilder Berkeley down by 8%, Land Securities 5% lower and NatWest off by 5.5%.

The selling came as the yield on Government bonds, called gilts, jumped in the face of speculation over the future of the chancellor.

The yield on 10-year gilts rose by 0.17 percentage points to 4.63%, while the pound fell below $1.36 at one point compared with above $1.37 on Tuesday evening.

Today’s steadier session also reflected pressure on the US currency after President Trump stepped up his criticism of Federal Reserve chair Jerome Powell.