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London open: Stocks nudge up amid corporate deluge; ECB eyed
London stocks nudged up in early trade on Thursday as investors waded through a deluge of corporate news and looked ahead to the latest policy announcement from the European Central Bank.
At 0925 GMT, the FTSE 100 was up 0.1% at 8,569.84.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “London’s blue-chip index has found its feet, making a little progress in early trade, unnerved by a slide on Wall Street. Investors stateside still have a case of the jitters, with concerns about the impact of cheap Chinese AI technology on expensive US valuations causing ructions. The overall message of caution emanating from the Federal Reserve has also raised concerns that inflation could be on the march upwards again.
“The Fed, as expected, kept interest rates in a holding pattern, but dropped its recent mention of inflation making progress. With threats and speculation flying around about trade tariffs and the potential impact on consumer prices, its little wonder policymakers seem in no rush to cut rates again, especially given the resilience of the US economy.”
Looking ahead to the rest of the day, eyes will be on the latest policy announcement from the ECB.
Kathleen Brooks, research director at XTB, said: “The market is certain that the ECB will cut interest rates at this meeting and is 100% priced for a cut. We do not expect the ECB to disappoint market expectations. The impact from the rate cut is not expected to be particularly market moving, instead, the focus will be on ECB President Christine Lagarde’s press conference at 1345GMT and the ECB statement that will accompany the decision.”
In equity markets, Airtel Africa surged after a well-received third-quarter update and as it announced the launch of a second share buyback programme.
St James’s Place rallied as it said net inflows and strong investment returns for clients had driven record funds under management for the year to the end of December 2024.
Oil giant Shell nudged up as it lifted its dividend but posted a bigger-than-expected drop in fourth-quarter profits.
Future was a high riser as the media group announced the appointment of Kevin Li Ying as its new chief executive officer with effect from 31 March, succeeding Jon Steinberg.
Serco gained after agreeing to buy Northrop Grumman‘s mission training and satellite ground network communications software business for $327m (£264m) in cash.
On the downside, BT Group tumbled as it said third-quarter revenues had fallen amid weaker phone sales and a struggling business unit.
Software group Sage was also in the red despite saying it had made a strong start its new financial year with revenues rising by a tenth in the first quarter, as all regions delivered solid growth.
Wizz Air tanked as it reported a narrowing of its third-quarter losses but cut its full-year profit forecast as it deals with issues related to engine groundings. The airline now expects full-year net income of €250m to €300m, down from previous guidance of €350m to €450m.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Carnival Plc | +2.64% | +53.00 | 2,063.00 |
| 2 |  |
Intermediate Capital Group Plc | +2.20% | +50.00 | 2,320.00 |
| 3 |  |
Diploma Plc | +2.07% | +92.00 | 4,532.00 |
| 4 |  |
Barratt Redrow Plc | +1.82% | +8.20 | 459.20 |
| 5 |  |
Melrose Industries Plc | +1.58% | +9.40 | 606.00 |
| 6 |  |
Rolls-royce | +1.57% | +9.20 | 593.40 |
| 7 |  |
United Utilities Group Plc | +1.56% | +15.60 | 1,015.00 |
| 8 |  |
Prudential Plc | +1.55% | +10.40 | 681.20 |
| 9 |  |
Dcc Plc | +1.46% | +80.00 | 5,565.00 |
| 10 |  |
Spirax Group Plc | +1.37% | +110.00 | 8,135.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bt Group Plc | -3.08% | -4.50 | 141.50 |
| 2 |  |
The Sage Group Plc | -1.23% | -16.50 | 1,320.00 |
| 3 |  |
Haleon | -1.20% | -4.50 | 369.60 |
| 4 |  |
Centrica Plc | -1.18% | -1.65 | 137.70 |
| 5 |  |
Gsk Plc | -1.18% | -16.50 | 1,384.00 |
| 6 |  |
Admiral Group Plc | -1.05% | -29.00 | 2,725.00 |
| 7 |  |
Standard Chartered Plc | -0.65% | -7.00 | 1,075.00 |
| 8 |  |
Vodafone Group Plc | -0.55% | -0.38 | 68.44 |
| 9 |  |
Natwest | -0.39% | -1.70 | 433.40 |
| 10 |  |
Associated British Foods Plc | -0.37% | -7.00 | 1,895.50 |
US close: Stocks fall as Fed holds fire, tech earnings in focus
US stocks closed in the red on Wednesday after the Federal Reserve said it would bide its time before making any further interest-rate cuts, while investors turned cautious ahead of a number of heavyweight corporate earnings due after the closing bell.
Meta Platforms, Microsoft and Tesla were all due to report quarterly figures after markets closed, with the focus likely to have shifted in recent days to how much the tech giants are spending on their AI software.
There was a huge sell-off of AI-related stocks on Monday after the news that Chinese outfit DeepSeek has managed to develop an LLM assistant of similar capabilities to the US majors’ at the fraction of the cost. Meta edged higher on Wednesday, while Microsoft and Tesla both fell.
“The week so far has been dominated by the tech sector thanks to the new AIs coming on stream from China. Investors will be hoping that tonight’s trio of titans will repeat Netflix’s trick from last week and provide good news in spades. ASML set the stage today with better figures, but sentiment remains brittle following Monday’s volatility,” said Chris Beauchamp, chief market analyst at IG.
The Dow fell 0.3% by the end of play, while the S&P 500 and Nasdaq both dropped 0.5%.
As expected, the Federal Open Market Committee kept interest rates on hold at the conclusion of its two-day meeting in Washington. Policymakers left the target range for official short-term interest rates at 4.25-4.50%.
During his press conference, Fed chief Jerome Powell said the central bank would focus on achieving further progress on bringing inflation back to target. He also said that monetary policy was currently “fairly restrictive” and that it was not necessary for inflation to have moved all the way back to 2% before the Fed moved.
Paul Ashworth at Capital Economics labelled the Fed’s policy statement as “hawkish” at the margin. “The FOMC is happy to remain on the sidelines […] If the Fed doesn’t resume cutting in the next few months, however, we suspect the window will have closed. While markets are still pricing in second half rate cuts, our view is that a flurry of tariffs [proposed by Donald Trump] will put a stop to that, as inflation rebounds to 3%.”
Also on the macro front, US mortgage applications fell 2% in the seven days ended 24 January, according to the Mortgage Bankers Association of America. Applications to refinance a mortgage fell 7%, while applications to purchase a new home slipped 0.4%.
The US goods trade balance hit a record $122.11bn in December, according to the Census Bureau, missing market expectations of $105.4bn and up sharply from November’s $103.5bn print. Imports surged 3.9% to $289.6bn, potentially due to US firms rushing to secure goods ahead of rumoured tariffs, while exports dropped 4.5% to $167.5bn.
Finally, wholesale inventories fell by 0.5% in December, according to the Census Bureau, missing market expectations for a 0.2% increase. Stocks of durable goods shrank by 0.5%, while nondurable goods inventories fell by 0.3%,
In equity news, Frontier Airlines finished higher despite the news that debt-laden Spirit Airlines rebuffed its second takeover approach in under three years. Spirit instead it remained committed to emerging from bankruptcy proceedings following a hearing scheduled for 13 February.
T-Mobile shares jumped after the telecom lifted its expectations for subscriber growth in 2025, projecting between 5.5 million and six million postpaid net additions, more than double Wall Street estimates, as it also beat expectations for fourth quarter revenue.
Thursday newspaper round-up: Car production, UK retailers, water bills, KPMG
The architect of a ban on newspaper takeovers by foreign states has demanded that an Abu Dhabi fund be forced to sell The Telegraph by Easter. Baroness Stowell, the Conservative chairman of the Lords communications and digital committee, said the Government should impose an ultimatum on RedBird IMI. It should be backed by the threat of regulatory action, she said, to strip the fund of control of what has been dubbed “the newspaper auction from hell”. – Telegraph
Car production has slumped to levels not seen since the 1950s as the sector struggles with the shift to electric vehicles. The number of cars made in Britain fell to 779,584 last year, according to the Society of Motor Manufacturers and Traders (SMMT), which was the lowest level since 1954, aside from the Covid pandemic. – Telegraph
UK retailers are warning that crime in their stores is “spiralling out of control” with 55,000 thefts a day and violent and abusive incidents rising by 50% last year. More than 70 incidents a day involved a weapon, according to the annual crime survey from the British Retail Consortium (BRC). – Guardian
Water bills will rise by an average of £123 this year in the biggest hit to customer pockets since the industry was privatised 36 years ago, as the public pays to replace ageing infrastructure and cut record sewage pollution. The price hike for millions of customers in England and Wales from 1 April will take the annual average bill from £480 to £603, and is higher than the £86 rise predicted by the regulator Ofwat in December, because water companies are adding inflation on top. – Guardian
Microsoft’s Azure cloud computing business posted a slowdown in quarterly growth, compounding investor worries about its huge investment in artificial intelligence products after China’s DeepSeek released a low-cost AI chatbot. Revenue from Azure, the group’s main profit engine in recent years, rose 31 per cent in the second quarter, compared with a 34 per cent increase in the prior quarter. The sales growth missed analysts’ estimates and came in at the lower end of Microsoft’s forecast of between 31 per cent and 32 per cent. – The Times
The UK partners of KPMG enjoyed their biggest payday on record last year, as the Big Four firm’s profitability was boosted by job cuts amid a “challenging market”. The accountancy group’s army of auditors and advisers pulled in fees of £2.99 billion in its most recent financial year, which ran until the end of September, up 1 per cent on the £2.96 billion of revenue it achieved in 2023. However, despite the relatively stagnant top line, KPMG’s annual profits rose by 11 per cent to £404 million. – The Times
