The UK's premier FTSE 100 index concluded Wednesday with a slight decrease of 0.04%, aligning closely with European market trends. This dip occurred following the announcement that various German political factions reached an agreement on a substantial 500 billion-euro special fund aimed at bolstering infrastructure investments across Europe. Domestically, S&P Global reported that the UK's private sector showcased continued growth in February.
This growth was predominantly driven by a rise in service sector activity, which effectively compensated for a notable decline in manufacturing production. The composite Purchasing Managers' Index (PMI) for the country fell marginally to 50.5 from the previous 50.6, aligning with the initial assessment. "The UK service sector has registered a modest, yet consistent, increase in overall business activity during February, thereby extending its expansionary trend that has been uninterrupted since November 2023," commented Tim Moore, the economics director at S&P Global Market Intelligence.
"Despite this, there is a visible decline in growth momentum since last autumn, and the forward-looking indicators from our survey suggest a heightened risk of stagflation emerging on the horizon." In corporate news, Games Workshop Group, a well-known British manufacturer of miniature figures and games, saw its shares rise by 3.20% after announcing that its pretax profit for the fiscal year ending June 1 would exceed forecasts.
This uptick illustrates the company's strong market position and customer demand. Conversely, shares of Severn Trent, the UK-based water company, experienced a decline of 4.50%, the largest drop within the FTSE 100, following its capital markets day presentation. The firm indicated it anticipates net operational outperformance in its forthcoming regulatory five-year asset management plan, known as AMP8, which will cover the period from April 1, 2025, to March 31, 2030. In another development, HSBC made headlines by downgrading Haleon's rating from buy to hold, while maintaining its price target at 4.20 pounds sterling.
Following this announcement, the British consumer health company saw its shares fall by 3.40% at the end of trading, reflecting investors' reactions to the downgrade..