Business
Stocks climb and pound firms as bond yields ease
Stocks in London rallied on Wednesday amid a calmer day on bond markets, supported by figures showing the UK services sector grew at its fastest rate since April 2024.
The FTSE 100 index closed up 61.30 points, or 0.7%, at 9,177.99. The FTSE 250 ended 150.18 points higher, or 0.7%, at 21,313.07, and the AIM All-Share finished up 2.90 points – 0.4% – at 768.47.
In Europe, the Cac 40 in Paris ended up 0.9%, while the Dax 40 in Frankfurt closed 0.5% higher.
The yield on UK 30-year government bonds fell to 5.61% on Wednesday from 5.71% at the time of the London equities close on Tuesday, while the yield on the 10-year bond narrowed to 4.75% from 4.81%.
The moves help ease some of the immediate pressure on Chancellor Rachel Reeves who set the date for her autumn Budget at November 26.
She acknowledged the economy is “not working well enough” and promised a “tight grip” on spending in her Budget, amid speculation about tax rises to plug a hole in the Government’s finances.
Ms Reeves said she had asked the Office for Budget Responsibility to prepare an independent forecast on the late November date to accompany the Budget.
Speaking to the House of Commons Treasury Committee, Bank of England governor Andrew Bailey said: “I do think it’s important not to focus on the 30-year bond rate… it is actually not a number that is being used for funding.”
He said that despite “dramatic commentary” he would not “exaggerate” the cost of government borrowing.
Mr Bailey said his main concern regarding the economy was the downside risks for the labour market.
In addition, he said there is “considerably more doubt” about how quickly and deeply the Bank can cut rates.
The pound rose to 1.3448 dollars late on Wednesday afternoon in London, compared with 1.3389 at the equities close on Tuesday. The euro firmed to 1.1679 dollars, against 1.1659. Against the yen, the dollar was trading lower at 147.95 compared with 148.20.
In better news for the Chancellor, the UK service sector grew in August at the fastest rate since April 2024, as output and new work climbed, a report from S&P Global showed.
The S&P Global UK services purchasing managers’ business activity index rose to 54.2 points in August from 51.8 in July, topping the flash reading of 53.6 released late last month.
“August data highlights a welcome acceleration of output growth and a swift rebound in order books after July’s dip, leaving the UK service economy on a much stronger footing as the end of summer comes into view,” said Tim Moore, economics director at S&P Global Market Intelligence.
Rob Wood, chief UK economist at Pantheon Macroeconomics, said the PMI signals growth close to potential, putting the Monetary Policy Committee in a tricky position, given that inflation is heading to double the 2% target shortly.
“The PMI suggests that rate setters will have to keep policy on hold for the rest of this year at least, as growth running around potential will fail to create the spare capacity needed to bring persistent wage and price inflation down,” he added.
In New York, markets were mixed after Tuesday’s hefty falls. The Dow Jones Industrial Average was down 0.4%, the S&P 500 rose 0.3% and the Nasdaq Composite was 0.8% higher.
Alphabet rose 9.5% and Apple 2.3% after a US antitrust ruling on Tuesday which rejected the US government’s demand that Alphabet sell its Chrome web browser was seen as a big win for the Google parent and the iPhone maker.
The yield on the US 10-year Treasury was quoted at 4.22%, narrowed from 4.28% on Tuesday. The yield on the US 30-year Treasury was quoted at 4.91%, lowered from 4.98%.
Data showed the number of job openings in the US surprisingly fell in July.
The number of job openings amounted to 7.181 million in July, falling from 7.357 million in June and 7.504 million 12 months earlier. The reading fell short of the FactSet-cited consensus of a rise to 7.373 million.
On London’s FTSE 100, Ashtead rose 0.8% as it raised cash flow guidance and stuck with its 4% rental revenue growth view for the current financial year.
The London-based industrial equipment hire company reported a pretax profit of 511.6 million dollars for the first quarter that ended July 31, falling 6.0% from 544.4 million dollars the year before.
Ashtead expects free cash flow between 2.2 billion and 2.5 billion dollars for the current financial year, compared with prior guidance for 2.0 billion to 2.3 billion dollars.
Chief executive Brendan Horgan said results were “solid” with revenues, profits and free cash flow “in line with our expectations as we continue to take advantage of secular tailwinds and the structural progression of our industry”.
On the FTSE 250, Hilton Food plunged 17% after it said a shortage of white fish prompted “significant” raw material inflation and softer UK demand, contributing to a drop in half-year profitability.
The Huntingdon-based food packaging company reported pre-tax profit of £24.3 million for the 26 weeks that ended June 29, falling 4.7% from £25.5 million the year before.
Weaker UK seafood demand has been driven by quota cuts leading to “significant” raw material inflation, the firm said.
Fresnillo and Endeavour Mining rose 8.1% and 3.6% respectively, reflecting the latest gains in the gold price.
JPMorgan thinks the gold price could reach 4,000 dollars per ounce by the second quarter of 2026 and 4,250 dollars by the end of next year.
Gold climbed to 3,565.82 dollars an ounce on Wednesday against 3,511.91 on Tuesday.
A barrel of Brent traded at 67.62 dollars late on Wednesday afternoon, down from 68.81 on Tuesday, after a Reuters report that the Opec+ group will consider a fresh increase to production when it meets over the weekend.
The biggest risers on the FTSE 100 were Fresnillo, up 155.0 pence at 2,074.0p, Endeavour Mining, up 96.0p at 2,760.0p, Babcock International, up 34.0p at 1,066.0p, Antofagasta, up 66.0p at 2,197.0p, and IAG, up 10.2p at 391.0p.
The biggest fallers were Pearson, down 38.5p at 1,047.0p, BT Group, down 3.6p at 206.1p, BP, down 6.8p at 427.3p, Airtel Africa, down 3.4p at 215.2p and Shell, down 36.5p at 2,694.0p.
Contributed by Alliance News
NEW DELHI: The govt expects businesses to pass on the benefit of lower goods and services tax (GST) to consumers and the states and the Central Board of Indirect Taxes (CBIC) and Customs will engage with industry on the issue. “…last time, industry had passed on the benefits of rate cuts and you would have seen that a lot of industry have come out and committed to transmitting this benefit… we will engage with industry and ensure that benefits are given to the consumers,” revenue secretary Arvind Shrivastava said at a press conference.There are indications that industry will respond positively. “CII strongly holds the view that industry would swiftly pass the benefits to the consumers and partner with govt to ensure a smooth, timely rollout that lifts demand and supports jobs,” industry body CII said in a statement within minutes of the announcement. When GST was introduced in 2017, the govt had put in place an anti-profiteering provision, which pushed industry to pass on the benefits. While the anti-profiteering agency has been disbanded, the provision still sits in the statutes.Shrivastava, however, suggested that industry was largely compliant, pointing out that 704 cases (60%) were registered in the initial years of GST, with alleged profiteering of Rs 4,362 crore. Shrivastava also said that CBIC will issue guidance on transition for goods that have already been sourced and are lying with dealers and distributors. A govt official said that goods that are in stock and will see reduction in GST will have to be sold at the new tax rate after Sept 22, but businesses will be able to get credit for it.
Business
American Eagle stock soars 20% as retailer says Sydney Sweeney campaign is ‘best’ to date, beats earnings
American Eagle said Wednesday its partnership with Sydney Sweeney has been its “best” advertising campaign to date as it announced fiscal second-quarter earnings that beat expectations.
The company’s splashy, yet controversial, campaign with the “Euphoria” star led to some criticism and blowback but the launch, coupled with a recent partnership with Taylor Swift’s new fiancé Travis Kelce, has led to new customer acquisition and positive traffic across channels.
American Eagle stock soared more than 20% in after-hours trading Wednesday.
“The fall season is off to a positive start. Fueled by stronger product offerings and the success of recent marketing campaigns with Sydney Sweeney and Travis Kelce, we have seen an uptick in customer awareness, engagement and comparable sales,” CEO Jay Schottenstein said in a news release. “We look forward to building on our progress and the continued strength of our iconic brands to drive higher profitability, long-term growth and shareholder value.”
The company also re-issued its full-year guidance after withdrawing it earlier this year. It now expects comparable sales to be approximately flat, better than the 0.2% decline analysts had anticipated, according to StreetAccount.
It still expects gross margin to be down for the duration of the year, but it made key changes to its outlook for operating income, which is bearing the brunt of the tariff impact. The company is now expecting its full-year operating income to be between $255 million and $265 million, down from a previous range of between $360 million and $375 million.
Here’s how American Eagle performed during the quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:
- Earnings per share: 45 cents vs. 21 cents expected
- Revenue: $1.28 billion vs. $1.24 billion expected
The company’s reported net income for the three-month period that ended Aug. 2 was $77.6 million, or 45 cents per share, compared with $77.3 million, or 39 cents per share, a year earlier.
Sales fell to $1.28 billion, down slightly from $1.29 billion a year earlier.
For the current quarter, American Eagle is expecting comparable sales to be up in the low single digit range, better than the 0.9% uptick analysts had expected, according to StreetAccount. It’s expecting the same trend during the fourth quarter.
So far this year, American Eagle’s performance has been marred by merchandising missteps, tariffs and an uncertain consumer that’s being more selective when spending money on products like clothes and shoes.
To turn things around, American Eagle launched its campaign with Sweeney ahead of the crucial back-to-school shopping season, but in some ways, that also backfired when it incited outrage from some customers.
The slogan American Eagle chose for the campaign — “Sydney Sweeney has great jeans” — led some far-left critics to say the remark was a double entendre and a nod to eugenics. Meanwhile, those on the right celebrated the campaign, leading President Donald Trump to weigh in and call it the “hottest” ad around.
More widely, the campaign also faced pushback from some who said the ads were overly sexualized and out of touch, leading them to wonder what type of consumer the company was targeting.
The campaign launched on July 23 at the tail end of American Eagle’s fiscal second quarter, but the company said it’s so far been a success, despite the pushback it received. The Sweeney campaign, along with the partnership it launched with Kelce, has led to “meaningful improvement in the business” with comps so far this quarter up in the mid-single digits. American Eagle said it’s gained 700,000 new customers and that traffic across channels has been “consistently positive” throughout August, despite some news reports indicating the contrary.
The Sweeney campaign has led to denim sellouts, double-digit traffic growth and increased awareness and engagement, the company said. The Sydney Jacket sold out in one day and The Sydney Jean, a custom style that donated 100% of proceeds to the Crisis Text Line, which provides mental health support, sold out in one day.
Meanwhile, American Eagle’s launch with Kelce, the Kansas City Chiefs tight end, the day after he announced his engagement to the pop star, drove three times more sales in one day than past collaborations did in a week, the company said. Many of the items, specifically ones worn by Kelce and his fellow athletes, sold out.
American Eagle’s partnerships with Sweeney and Kelce highlight the work the retailer is doing to stay relevant with consumers and cut through the noise as spending remains soft.
It’s also facing stiff competition from peers like Abercrombie & Fitch, Gap and Levi’s. Recently, Gap launched its “Better in Denim” campaign featuring Katseye and Kelis’s 2003 hit “Milkshake.” Meanwhile, Levi’s has had an ongoing campaign featuring Beyoncé while Abercrombie has taken a sports focus and partnered with the NFL.
Compounding American Eagle’s challenges is the uncertain tariff environment. American Eagle has been working to reduce its reliance on China to under 10% this year but it also has a heavy manufacturing presence in Vietnam and India, which have been the subject of reciprocal tariffs.
Business
Modi Govts MASSIVE Festive Bonanza: GST Council Approves 2-Slabs Tax Structure; To Be Implemented From 22 September 2025
New Delhi: GST Council Meeting: The 56th meeting of the GST Council that kick off on Tuesday morning has announced the much anticipated big-bang reforms in GST tax structure.
The GST Council has accepted Group of Minister’s (GoM) proposal to retain two slabs — 5 percent and 18 percent.
Till date, As per Indian GST rules, a four-slab GST system was being followed — 5 percent, 12 percent, 18 percent, and 28 percent — along with an additional cess on sin and luxury goods.
With GST rate cuts, govt expects lower prices to reach consumers – The Times of India
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