The FTSE 100 carved out minor gains on Wednesday as the Scottish Mortgage Investment Trust rose on reports of SpaceX IPO plans.
London’s leading index was 0.1% at the time of writing, with investors’ attention firmly on this evening’s Federal Reserve interest rate decision.
“Happy Fed Day global markets – after much speculation and market-moving narrative, today the Federal Reserve Open Market Committee is expected to cut interest rates by 25bps,” said Emma Wall, Chief Investment Strategist, Hargreaves Lansdown.
“This cut is fully baked into markets, and any deviation will cause considerable upset. Global markets had a mixed session yesterday awaiting the news, with the S&P 500 falling slightly and NASDAQ up marginally. Futures look more positive across the Pond, with both indices looking to open up later today. Asian markets have had a negative session, while the FTSE 100 has opened up this morning in London.”
The UK will have to wait a little longer to learn the Bank of England’s interest rate decision, which will be released next week and is the last major event on the UK economic calendar for 2025.
Although markets are pricing in a UK interest rate cut to 0.25%, a reduction in UK borrowing costs is far less certain than in the US, with inflation proving a thorn in the side of BoE voting members. This has been reflected in tepid trade in UK-centric assets this week.
FTSE 100 movers
The Scottish Mortgage Investment Trust was among the top risers on Wednesday, on reports that SpaceX – its largest holding – was preparing for an IPO as early as 2026. SpaceX, a space exploration company founded by Elon Musk, is thought to be eyeing a $30bn fundraise as part of the IPO.
Scottish Mortgage Investment Trust shares rose 3% as investors saw the Baillie Gifford-managed trust as a way to get early access to the SpaceX IPO, which could value the company at $1.5 trillion.
Pearson was the top riser, adding over 3%, as the publishing and education group continued to recover from a selloff following a trading statement in October.
Berkeley Group enjoyed a solid session as investors looked to the future and overlooked interim results showing revenues and profits falling amid a slowing housing market.
“At least the company’s communication remains refreshingly clear. It is fully committed to its 10-year strategy out to 2035 which provides a roadmap to see it through any turbulence in the wider market. It also continues to be effusive about the strong dynamics behind the London property market,” said Dan Coatsworth, head of markets at AJ Bell.
“Berkeley has managed to keep a tight lid on costs, despite some inflationary pressures in labour and materials and this, coupled with the strength of its balance sheet, could help it to handle the ups and downs of the housing market.”
Berkeley Group shares were 2% higher at the time of writing.
Kingfisher shares fell following a broker downgrade by Deutsche Bank Research who now rates the DIY specialist as a ‘sell’.