London close: Stocks mixed ahead of US Fed decision

(Sharecast News) - London's financial markets finished in a mixed state on Wednesday, as investors looked to the latest policy announcement from the US Federal Reserve and awaited key earnings reports from major American technology firms. The FTSE 100 index rose 0.28% to close at 8,557.81 points, while the FTSE 250 experienced a slight decline of 0.14%, ending the session at 20,559.70 points.

In currency markets, sterling was last down 0.01% on the dollar to trade at $1.2442, while it appreciated 0.07% against the euro, changing hands at €1.1937.

"Monday's slump and Tuesday's recovery have given way to indecisive trading today as investors await the Fed decision and earnings," said IG chief market analyst Chris Beauchamp.

"Tonight's rate decision is all but guaranteed to be a hold, but the press conference will likely prove to be one of the more interesting, if only to watch Jerome Powell don his diplomatic garb once again and avoid being drawn on how the new administration's possible tariffs will affect Fed policy.

"President Trump has already made it clear that he expects rates to come down, and Powell will likely have to field a number of questions on this topic."

Munnelly said the week so far had been dominated by the tech sector thanks to the new artificial intelligence models from China - specifically, DeepSeek.

"Investors will be hoping that tonight's trio of titans will repeat Netflix's trick from last week and provide good news in spades.

"ASML set the stage today with better figures, but sentiment remains brittle following Monday's volatility."

UK government greenlights Heathrow third runway, German consumer sentiment falls

In economic news, the UK government threw its support behind the long-debated third runway at Heathrow on Wednesday, with Chancellor Rachel Reeves arguing the expansion would boost economic growth and create thousands of jobs.

Speaking at a Siemens plant in Oxfordshire on Wednesday, Reeves called for proposals to be submitted by the summer, describing the project as essential for the UK's global connectivity.

She highlighted that Heathrow had faced growth restrictions for decades, noting that no new runways had been built in the UK since the 1940s.

The planned expansion, which includes a new terminal and could generate up to 100,000 jobs, had faced repeated delays due to legal challenges, shifting political stances, and the pandemic.

The project would require the demolition of around 700 homes and the rerouting of the M25 into a tunnel, while environmental groups continued to oppose it.

Reeves, however, insisted that the development aligned with the UK's net-zero target by 2050, citing advancements in sustainable aviation fuels as a path to greener air travel.

On the continent, German consumer sentiment deteriorated in January, according to a closely watched survey by GfK and the Nuremberg Institute for Market Decisions.

The consumer sentiment index dropped to -22.4 from -21.4 the previous month, missing forecasts of a smaller decline to -20.0.

Across the Atlantic, US mortgage activity slowed last week, with applications falling 2% in the seven days ended 24 January, according to the Mortgage Bankers Association.

Refinancing applications dropped 7%, while home purchase applications dipped 0.4%.

The decline came despite falling Treasury yields, as mortgage rates remained above 7%, keeping affordability pressures high in the housing market.

Water companies in the green, Raspberry Pi slides on profit taking

On London's equity markets, Fresnillo rose 2.74% after the precious metals miner met its 2024 silver production guidance and slightly exceeded expectations for gold output.

The company also reported a more than twofold increase in full-year profits, driven by lower costs and higher commodity prices.

Pennon Group surged 9.41%, reversing earlier losses, after announcing plans to raise around £490m through a rights issue.

The funds would support its long-term investment programme, extending through to 2030.

Sector peer United Utilities climbed 1.96% after confirming its acceptance of the UK water regulator's final determination for the next regulatory period.

The company pledged a £13bn investment in water and wastewater infrastructure over the next five years, marking the sector's largest investment in more than a century.

It said the programme was expected to support 30,000 jobs and generate £35bn in economic value for the North West.

Manufacturing firm Dowlais Group soared 7.53% after agreeing to a £1.2bn takeover by American Axle & Manufacturing.

WH Smith gained 6.81% after it reported a 4% rise in revenue for the 21 weeks ended 25 January.

Strong growth in its travel segment helped offset the anticipated decline in high street sales.

The retailer confirmed earlier in the week that it was considering a potential sale of its high street division.

On the downside, Raspberry Pi Holdings fell 3.85%, despite reaffirming expectations for adjusted annual core earnings of at least $36m.

The stock had more than doubled since its initial public offering, with the decline likely due to profit-taking.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,557.81 0.28% FTSE 250 (MCX) 20,559.70 -0.14% techMARK (TASX) 4,746.13 -0.35%

FTSE 100 - Risers

JD Sports Fashion (JD.) 86.30p 4.63% Admiral Group (ADM) 2,754.00p 3.65% Beazley (BEZ) 840.00p 3.45% Fresnillo (FRES) 673.50p 2.74% International Consolidated Airlines Group SA (CDI) (IAG) 330.70p 2.48% Barclays (BARC) 296.30p 2.40% NATWEST GROUP (NWG) 435.10p 2.33% Halma (HLMA) 3,012.00p 2.28% Centrica (CNA) 139.35p 2.16% Prudential (PRU) 670.20p 2.16%

FTSE 100 - Fallers

BAE Systems (BA.) 1,195.50p -4.44% Diageo (DGE) 2,426.50p -2.75% Glencore (GLEN) 345.50p -2.66% St James's Place (STJ) 929.00p -1.90% LondonMetric Property (LMP) 183.10p -1.40% Taylor Wimpey (TW.) 119.05p -1.37% Convatec Group (CTEC) 246.80p -1.36% Persimmon (PSN) 1,259.50p -1.25% easyJet (EZJ) 490.70p -0.97% Haleon (HLN) 373.50p -0.95%

FTSE 250 - Risers

Pennon Group (PNN) 554.00p 7.47% WH Smith (SMWH) 1,272.00p 6.89% Bank of Georgia Group (BGEO) 4,845.00p 6.83% Genus (GNS) 1,864.00p 5.07% TBC Bank Group (TBCG) 3,385.00p 4.78% Softcat (SCT) 1,530.00p 2.20% Lancashire Holdings Limited (LRE) 655.00p 2.18% Diversified Energy Company (DEC) 1,314.00p 2.02% North Atlantic Smaller Companies Inv Trust (NAS) 3,680.00p 1.96% Foresight Solar Fund Limited (FSFL) 69.80p 1.90%

FTSE 250 - Fallers

Future (FUTR) 895.50p -5.93% SThree (STEM) 265.50p -5.88% BH Macro Ltd. GBP Shares (BHMG) 384.00p -5.30% Wizz Air Holdings (WIZZ) 1,372.00p -5.25% QinetiQ Group (QQ.) 367.00p -4.03% Raspberry PI Holdings (RPI) 721.75p -3.85% Crest Nicholson Holdings (CRST) 175.80p -3.83% Barr (A.G.) (BAG) 607.00p -3.54% Wetherspoon (J.D.) (JDW) 606.00p -3.04% Genuit Group (GEN) 370.50p -3.01%