MARKET REPORT: FTSE 250 hits two-year high as economy booms

The FTSE 250 hit its highest level in more than two years as the domestically focused index benefited from 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.

It comes after better-than-expected GDP figures this week showed the UK economy grew by 0.4 percent in May, which also pushed the pound to a one-year high of $1.2988 against the dollar.

A stronger pound tends to have a negative effect on the FTSE 100’s global position, reducing the value of foreign earnings in pounds. Still, the index rose 29.57 points, or 0.4 percent, to 8,252.91.

Signs of a slowdown in consumer spending hit the stock prices of some of the largest US banks.

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

While Citigroup’s profit rose 10 percent to £2.5 billion, it fell 2 percent.

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

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

Ashmore’s mid-cap peer Ninety One reported assets under management rose 3 percent to £128.6 billion, and 1.9 percent, or 3.2p, to 176.5p.

Assets under management at AIM-listed Premier Miton reached £10.6bn in the quarter to 30 June, down from £10.7bn at the start of the quarter as investors pulled £139m out of funds – but were up 6.7 per cent, or 4.5p, at 71.5p.

US asset manager Oaktree Capital Management announced a 6.3 percent stake in Indivior, just days after the US pharmaceutical company warned that annual revenues and profits would be worse than hoped. Indivior fell 3.4 percent, or 28.5p, to 814.5p.

Drinks giant Diageo, behind brands Guinness, Johnnie Walker and Smirnoff, fell 0.3 percent, or 6.5p, to 2,539.5p after its rating was downgraded by Goldman Sachs.

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

Rio Tinto is reportedly eyeing takeover targets such as Canadian mining company Teck Resources, according to Sky News. The share price rose 0.2 percent, or 10p, to 5,260p.

Frontier Developments rose 1.8 percent, or 4.5p, to 255p after the video game developer announced the sequel to popular theme park game Planet Coaster 2.

Superdry fell 3.1 percent, or 0.1p, to 3.3p as the British retailer prepared for an initial public offering on Monday.

System1 Group, which helps companies test and create ads, added 260 clients in a year, boosting revenues 28 percent to £30 million and profits to £3.1 million. Shares rose 6.6 percent, or 45p, to 730p.