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The main stock indices in the UK experienced gains on Thursday, driven by broad support after British Prime Minister Keir Starmer expressed his full support for finance minister Rachel Reeves, which alleviated fears regarding her position. The FTSE 100, a prominent blue-chip index, along with the midcap index, closed down on Wednesday after Reeves' emotional appearance in parliament, which followed a series of controversial reversals on welfare reforms that significantly impacted her budget proposals. Additionally, Britain's bond market stabilised after worries over debt prompted a selloff in the previous trading session. The government succeeded in passing its welfare reform bill on Tuesday; however, it had to eliminate long-term cost-saving provisions, raising concerns that achieving a balanced budget may necessitate increasing taxes or reducing spending in other areas. There are still some concerns about the government finding itself in a difficult position and losing control over public finances. According to the S&P UK services PMI, activity in the British services sector grew at its highest rate in nearly a year, while the increase in prices was at its slowest in almost four years. The Bank of England is carefully monitoring service sector prices to evaluate inflationary pressures, and investors largely anticipate a rate reduction in August.

Single Stock Stories & Broker Updates:

• Shares of Currys rose by 9.8% to 130.1p, the highest since December 2021, after reporting annual adjusted pretax profit above expectations. The retailer has raised its annual profit target three times, driven by strong demand in mobile, gaming, and premium computing in the UK and Ireland. It remains confident in achieving a 2025/26 adjusted PBT of £167 million. Year-to-date, its stock is up nearly 25%, compared to a 5% rise in the FTSE mid-caps index.

• Shares of Watches of Switzerland dropped 10.2% to 378.4p, warning that profit margins for fiscal 26 will be pressured as brand partners like Rolex and Cartier raise U.S. prices due to tariffs. Some partners are also cutting distribution margins. The company expects 6% to 10% constant currency revenue growth for FY26, assuming the 10% U.S. tariff remains after its 90-day pause, compared to 8% growth in 2025. Year-to-date, the stock is down approximately 29%.

Technical & Trade View

FTSE Bias: Bullish Above Bearish below 8700

• Primary support 8600
• Below 8500 opens 8400
• Primary objective 9200
• Daily VWAP Bullish
• Weekly VWAP Bearish

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