FTSE 100 today: Stocks open higher as pound rebounds to $1.36 amid tariff jitters

UK equities opened higher, with the FTSE 100 gaining 1% and the pound strengthening. Corporate news presented a mixed picture, highlighted by WPP shares plummeting over 12% after the advertising group significantly cut its full-year revenue and profit forecasts, citing weaker trading and macroeconomic pressures. In contrast, Hunting PLC reported strong first-half performance with 16% EBITDA growth, raising its dividend growth target and announcing a $40 million share buyback, while Jet2 also posted a 12% rise in annual pre-tax profit driven by strong demand.

Analysis

UK markets demonstrated resilience with the FTSE 100 rising approximately 1% and the pound gaining 0.2% against the dollar to $1.36, despite underlying tariff concerns. Corporate earnings reports, however, revealed significant divergence. WPP (LON:WPP) shares fell over 12% after a material cut to its 2025 outlook, with the advertising group now expecting like-for-like revenue to fall between 3% and 5%, a sharp deterioration from its prior guidance of flat to a 2% decline, citing macroeconomic pressures and weak June trading. In stark contrast, Hunting PLC (LON:HTG) reported robust first-half 2025 results, with EBITDA growing approximately 16% to $68-$70 million, leading the company to raise its annual dividend growth target from 10% to 13% and announce a $40 million share buyback program while reaffirming full-year guidance. The consumer leisure sector also showed strength, with JET2 reporting a 12% rise in annual pre-tax profit and pub operator Young & Co posting a 7% like-for-like sales increase for the 14 weeks to July 8, indicating that targeted consumer spending remains strong despite broader economic headwinds.

Key Decisions for Investors

• Re-evaluate long positions in WPP given the significant downward revision of its full-year guidance, which points to deteriorating business conditions and heightened sensitivity to macroeconomic pressures.
• Consider Hunting PLC's strong operational performance, evidenced by 16% H1 EBITDA growth and enhanced capital return plans, as a positive catalyst for the stock, especially as it maintains its full-year outlook.
• Investors should monitor for bifurcation within UK consumer stocks, as demand remains resilient for specific leisure and travel names like JET2 and Young's, while other sectors face headwinds.
• Keep a close watch on UK fiscal policy developments, as potential changes to fiscal rules aimed at boosting public investment could have broad implications for the domestic economic growth outlook.