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London open: FTSE gains as investors eye Syria developments, Chinese inflation
London stocks rose in early trade on Monday as investors mulled political developments in the Middle East and the latest inflation data out of China.
At 0910 GMT, the FTSE 100 was up 0.3% at 8,330.69.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “London’s blue-chip index has started the week on the front foot, shaking off signs of downbeat demand in China, as energy giants gain ground amid rising oil prices.
“The benchmark, Brent Crude, has crept higher towards $72 a barrel, as a fresh wave of uncertainty engulfs the Middle East, given the rapid fall of the Assad regime in Syria. Weak demand from China and the postponement of the plan by OPEC+ nations to postpone production increases is keeping a lid on prices to some extent.
“However, the speed at which rebel forces took over in Syria and the unpredictability of what will come next has raised fresh supply concerns in a region already wracked by conflict.”
Investors were also digesting the latest data released by the Bureau of National Statistics in China, which showed that consumer price inflation fell to a five-month low in November, slowing to 0.2% year-on-year from 0.3% the month before and falling short of expectations of 0.5%.
Core inflation – which excludes food and fuel prices – rose 0.3% in November, down from 0.2% in October.
Streeter said the data was “uninspiring, given it showed consumer price growth falling back, indicating demand is still weak in the world’s second-largest economy”.
“It’s an indication that the big stimulus measures aren’t cutting through and wariness remains about spending, which is set to continue to hold the economy back,” she added.
In equity markets, heavily-weighted miners were among the best performers, with Glencore, Antofagasta, Anglo American and Rio Tinto all higher.
Advertising giant WPP rallied following reports that Omnicom and Interpublic are in $30bn merger talks.
Spirax and Weir were both boosted by upgrades to ‘overweight’ by Morgan Stanley, while AJ Bell was higher after an upgrade to ‘buy’ at Shore Capital.
Domino’s Pizza fell as it said new measures announced in October’s Budget would cost it around £3m a year and announced a new “profitability and growth framework” with its franchise partners, that will see it invest an additional £3-4m per annum from next year.
Baltic Classifieds fell after a downgrade to ‘hold’ at Deutsche Bank.
Mike Ashley’s Frasers Group was in the red after a downgrade to ‘equalweight’ by Barclays and after Boohoo said that international shareholder advisory group ISS has recommended that its shareholders vote against resolutions seeking board representation from the company.
Boohoo is due to hold a general meeting on 20 December at which shareholders will be asked whether they agree to admit Ashley and restructuring expert Mike Lennon to the board.
But Boohoo said that ISS has recommended that its shareholders vote against these resolutions.
“ISS states that Frasers has offered a superficial view of performance and no specific plans for change and the two Frasers candidates, Mike Ashley and Mike Lennon, have real conflicts of interest, concluding that board change at Boohoo Group is not warranted,” it said.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bhp Group Limited | +3.10% | +63.00 | 2,095.00 |
| 2 |  |
Rio Tinto Plc | +3.07% | +151.00 | 5,075.00 |
| 3 |  |
Antofagasta Plc | +3.00% | +52.00 | 1,782.50 |
| 4 |  |
Anglo American Plc | +2.56% | +63.00 | 2,527.50 |
| 5 |  |
Glencore Plc | +2.55% | +9.65 | 387.65 |
| 6 |  |
South32 Limited | +2.49% | +4.50 | 185.20 |
| 7 |  |
Wpp Plc | +2.19% | +19.00 | 886.60 |
| 8 |  |
Prudential Plc | +2.02% | +13.40 | 675.60 |
| 9 |  |
Standard Chartered Plc | +1.81% | +17.60 | 991.20 |
| 10 |  |
Weir Group Plc | +1.68% | +38.00 | 2,298.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bp 9% 2nd Prf | -3.73% | -6.00 | 155.00 |
| 2 |  |
Wheaton Precious Metals Corp. | -2.80% | -140.00 | 4,860.00 |
| 3 |  |
Bae Systems Plc | -1.87% | -23.00 | 1,206.50 |
| 4 |  |
Auto Trader Group Plc | -0.97% | -8.20 | 836.80 |
| 5 |  |
Haleon | -0.93% | -3.50 | 371.50 |
| 6 |  |
Admiral Group Plc | -0.92% | -25.00 | 2,695.00 |
| 7 |  |
Relx Plc | -0.91% | -34.00 | 3,712.00 |
| 8 |  |
Next Plc | -0.86% | -86.00 | 9,914.00 |
| 9 |  |
Crh Plc | -0.84% | -68.00 | 8,026.00 |
| 10 |  |
Vodafone Group Plc | -0.83% | -0.60 | 71.52 |
US close: S&P 500, Nasdaq hit new highs after solid jobs data
The S&P 500 and Nasdaq both hit new record highs on Friday after solid economic data reinforced expectations for a quarter-point cut in interest rates at the Federal Reserve’s next meeting.
The S&P 500 rose 0.25% to 6,090.27, marginally topping a previous record of 6,086.49 reached on Wednesday, while the Nasdaq gained 0.81% to 19,859.77, ahead of an earlier peak of 19,735.12.
The Dow, however, fell for a second day after also hitting an all-time high on Wednesday, slipping 0.28% to 44,642.52.
Data released during the session showed that non-farm payrolls increased by 227,000 in November, ahead of the consensus forecast of 214,000, and well ahead of October’s upwardly revised figure of 36,000 (initial estimate: 12,000) – which was distorted by the impact of hurricanes and industrial action.
“There is nothing in the report to change our call for the Federal Reserve to lower rates by 25bps at the December 18 FOMC meeting, but we expect the FOMC to proceed more cautiously in 2025 and skip cutting rates in January,” said Nancy Vanden Houten, lead US economist at Oxford Economics.
The US unemployment rate ticked higher by one tenth of a percentage point to 4.2%, in line with economists’ forecasts, while average hourly earnings rose by 0.4% (consensus: 0.3%).
“Last month’s payrolls shocker wasn’t completely revised away, but the return of 200K+ jobs growth reminded investors about the strength of the US, at a time when political turmoil seems to be springing up almost everywhere else,” said Chris Beauchamp, chief market analyst at IG.
“An ideal combination of rising earnings, a strong economy and falling interest rates provides a compelling response to those still wondering why the US stock market seems to win out over its competitors,” he said.
In other news, the University of Michigan’s consumer confidence index rose for a fifth month running in December, increasing to 74.0 from 71.8 in November, beating the 73.0 expected by the market.
Market movers
Athletics apparel retailer Lululemon Athletica shares jumped 16% after third-quarter results beat market forecasts, with sales up 9% and net income surging 41%. The company also delivered guidance in line with expectations for the current quarter.
Beauty retailer Ulta Beauty rose 9% following a top and bottom-line earnings beat, as the company also upgraded its profit expectations for the full year.
Meanwhile, tech stocks were performing well with results from the likes of Docusign, Hewlett Packard Enterprise, Asana and Rubrik all beating expectations.
Unitedhealth‘s stock continued to fall in the wake of Wednesday’s shock killing of its chief executive Brian Thompson.
Monday newspaper round-up: Job vacancies, Mike Ashley, John Lewis Partnership
Rachel Reeves plans to end the UK’s “fractious” post-Brexit accord with the EU, a relationship she said had been defined by “division and chaos”, by promising closer ties in the first speech by a UK chancellor to eurozone finance ministers since 2020. Reeves will say she wants to adopt a “business-like” approach through an “economic reset” with the EU, offering the goal of driving up trade and growth. – Guardian
The number of job vacancies in November fell at the fastest rate since the start of the pandemic, as business confidence slumped to its lowest level in almost two years, according to two new reports. In a damaging blow to the government efforts to boost growth, the latest monthly report on the job market from accountancy firm KPMG and the Recruitment and Employment Confederation (REC) found demand for staff declined at a “sharp and accelerated pace” last month, with the steepest fall in vacancies since August 2020. – Guardian
London’s stock market is suffering from a “disease” that makes it more attractive to be private, a senior fund manager has warned. A major shareholder in Learning Technologies Group (LTG), who didn’t want to be named, said the company’s decision to sell itself to US private equity for $1bn (£802m) was “a symptom of the wider disease” in UK public markets. It came as other City money managers expressed “dismay” at the deal, saying the group is being acquired on the cheap. – Telegraph
Mike Ashley has called the co-founder of Boohoo “egotistical” and accused the struggling fast-fashion group’s board of creating a “catastrophic mess” through “gross mismanagement”, as he intensifies his campaign to force his way on to it. In a letter to “long-suffering” Boohoo shareholders before a vote on December 20 on whether to appoint Ashley, the founder of Frasers Group, and the restructuring expert Mike Lennon as directors, he said Debenhams should remain part of the Boohoo group and that “critical to that turnaround will be avoiding a fire sale of assets at knockdown prices”. – The Times
The owner of John Lewis and Waitrose is attempting to win back more shoppers by opening Caffè Nero coffee shops in its stores. The John Lewis Partnership opened the cafés last week in five Waitrose shops — in Billericay, Godalming, Keynsham, Locks Heath and Stroud — offering coffee from Nero Roasting Company alongside Waitrose’s food menu. A Caffè Nero outlet opened in the John Lewis in White City, west London, on Thursday. – The Times
