MARKET REPORT: FTSE 250 hits two-year high on economic boom

The FTSE 250 hit its highest level in more than two years as the domestic-focused index was boosted by an improving outlook for the UK economy.

London’s mid-cap stock index hit its highest level since April 2022, rising 0.1 percent, or 13.98 points, to 21,202.89.

This comes after better-than-expected GDP figures this week showed the UK economy grew by 0.4 per cent in May. That has also pushed the pound to its highest level in a year: $1.2988 against the dollar.

A stronger pound tends to weaken the FTSE 100’s global component, weakening the sterling value of its overseas earnings, but it still managed to rise 29.57 points, or 0.4 percent, to 8252.91.

Signs of a slowdown in consumer spending hit shares of some of the largest U.S. banks.

Wells Fargo shares fell 6.4 percent and JP Morgan, America’s biggest bank, fell 0.9 percent after funds it set aside to cover potentially bad loans rose by almost two-thirds to £2.4 billion.

And while Citigroup’s profits rose 10 per cent to £2.5bn, they fell 2 per cent.

It was a volatile session for some London asset managers. Ashmore, who focuses on emerging markets such as Colombia and India, warned that investors had little appetite for risk.

Assets under management fell 5 percent to 38 billion pounds in the fourth quarter as clients withdrew funds worth 1.5 billion pounds. Shares fell 0.1 percent, or 0.1 pence, to 180 pence.

Ashmore’s mid-cap peer Ninety One said its assets under management rose 3 percent to £128.6 billion, up 1.9 percent, or 3.2 pence, to 176.5 pence.

AIM-listed Premier Miton’s assets under management stood at £10.6bn in the three months to June 30, down from £10.7bn at the start of the quarter as investors withdrew £139m from the funds, but up 6.7 per cent, or 4.5p, to 71.5p.

US asset manager Oaktree Capital Management revealed a 6.3 per cent stake in Indivior, just days after the US pharmaceutical company warned that annual revenue and profit will be worse than expected. Indivior fell 3.4 per cent, or 28.5 pence, to 814.5 pence.

Drinks giant Diageo, behind the Guinness, Johnnie Walker and Smirnoff brands, fell 0.3 percent, or 6.5 pence, to 2,539.5 pence following a ratings downgrade by Goldman Sachs.

Airline stocks also faced a turbulent session after HSBC cut its rating on the sector and Germany’s Lufthansa issued its second profit warning of the year. British Airways owner IAG fell 2.2%, or 3.5p, to 174p, and Wizz Air fell 0.8%, or 18p, to 2,170p.

Rio Tinto is reportedly considering takeover targets including Canadian miner Teck Resources, Sky News reported, and rose 0.2 percent, or 10 pence, to 5,260 pence.

Frontier Developments added 1.8 per cent, or 4.5p, to 255p after the games developer announced the sequel to popular theme park game Planet Coaster 2.

Superdry fell 3.1 percent, or 0.1 pence, to 3.3 pence as the British retailer prepared to delist from the stock market on Monday.

System1 Group, which helps companies test and create ads, added 260 customers in a year, helping revenue rise 28 percent to £30 million and profits to £3.1 million. Shares gained 6.6 percent, or 45p, to 730p.