UK equities rebounded on Wednesday after their sharpest single-day fall in nearly five months. By 10:11 GMT, both the FTSE 100 and midcap index gained 0.5%, led by strong advances in mining and healthcare shares.
Precious metal miners tracked the surge in global gold prices, with Fresnillo rising 6.1% and Hochschild Mining climbing 6.5%. Industrial miners also strengthened, with Glencore, Anglo American, and Antofagasta each advancing more than 2.5%.
The healthcare sector provided further momentum. AstraZeneca shares rose 1.9%, while industrial stocks such as Rolls-Royce, IAG, and Babcock all posted gains.
The rebound followed Tuesday’s steep losses, which were driven by concerns over the UK’s fiscal outlook. Finance Minister Rachel Reeves confirmed she would deliver her annual budget on November 26, pledging a “tight grip” on spending to reduce inflation and borrowing costs.
However, bond markets reflected ongoing skepticism. British 20- and 30-year gilt yields climbed to their highest levels since 1998, surpassing Tuesday’s record highs. The pound also extended losses as investors weighed the risk that potential tax increases could suppress growth while doing little to improve government revenue.
Key developments weighing on sentiment included:
- Rising bond yields: long-dated gilts at 27-year highs.
- Sterling weakness: continued pressure following Tuesday’s decline.
- Investor focus: balancing fiscal tightening with growth concerns.
Corporate Movers Highlight Market Divergence
Company results and sector updates added to the day’s market dynamics. Ashtead Group rose 1.6% after reporting higher first-quarter revenue, while Watches of Switzerland surged 7.1% to lead the midcap index on strong U.S. demand.
In contrast, the insurance sector slipped, with Admiral Group and Hiscox each down 1.5%. The day’s sharpest decline came from Hilton Food Group, which fell 18.8% after warning of higher seafood costs and regulatory challenges at its Greek subsidiary.
Outside corporate earnings, broader economic data offered a glimmer of resilience. A new survey showed Britain’s services sector expanded at its fastest pace in over a year, buoyed by rising new business and easing fears of U.S. tariffs. Still, concerns lingered over domestic fiscal policy and potential tax increases.
Investors now await testimony from Bank of England Governor Andrew Bailey before the Treasury Committee at 13:15 GMT, alongside U.S. job openings data for July, for further clues on monetary and economic direction.