London stocks rise as financials rebound, Middle East risks cap gains

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London stocks rise as financials rebound

Highlights

FTSE 100 rises 0.6% to 10,316.05 by 0917 GMT, led by HSBC, Standard Chartered up 2% each, and Prudential up 3.4%, as financials rebound.
Frasers Group gains 1% on a €2 billion Hugo Boss offer, while Wizz Air jumps 5.3% after beating profit expectations despite warning of weaker Q1 revenue per seat.
Halma plunges 12.6% after forecasting slower constant-currency revenue growth for fiscal 2027, with software stocks underperforming on concerns over AI-driven spending shifts and a UBS sector downgrade.

Financial stocks lead early market move

As reported by Reuters, the FTSE 100 is up 0.6% at 10,316.05 points by 0917 GMT, while the domestically focused FTSE 250 is flat. The gains come as financial stocks recover, helping London's main index outperform despite a cautious broader tone.

HSBC and Standard Chartered each add 2%, while Prudential rises 3.4% to lead blue-chip gainers. Stocks with exposure to Hong Kong are bouncing back after sharp declines over the past week, following China's tighter rules for cross-border investments, an important business area for UK companies.

Elsewhere, Frasers Group edges up 1% after the retailer controlled by Mike Ashley launches a 2 billion euro takeover offer for German fashion brand Hugo Boss. Wizz Air climbs 5.3% after reporting operating profit above analysts' expectations, although the airline says first-quarter revenue per available seat kilometre is set to fall because of disruption linked to the Iran war.

Halma falls 12.6% after saying organic constant-currency revenue growth in fiscal 2027 will slow. Software names also weigh on sentiment, with Relx down 1.6% and Sage Group off 2.5%, tracking weakness across the euro zone technology sector.

Rate outlook and AI spending keep investors cautious

Technology shares are under pressure after Oracle unveils new debt-backed AI spending plans, adding to investor worries that companies may redirect spending away from traditional software providers toward newer AI models. UBS also downgrades the broader European IT sector, reinforcing concerns about valuation and demand across the industry.

Investors are also watching the European Central Bank's rate decision and outlook later in the day as tensions in the Middle East intensify. In the UK, traders expect the Bank of England to raise borrowing costs by 25 basis points in September, according to LSEG data, as policymakers continue to confront price pressures.

In our earlier article on HSBC’s new ultra-wealth platform, we explained how the bank is expanding its wealth management offering by connecting ultra-high-net-worth clients with venture capital opportunities in private tech startups. We also noted that while HSBC’s long-term shareholder returns have been strong, near-term technical signals were mixed, with short-term gains facing medium-term resistance and a sideways trading range seen as the base case.

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