2nd Jan 2025 07:48
(Alliance News) - London's FTSE 100 is set to open the year in the green, with a series of manufacturing purchasing managers' index readings the first hurdle for equities in 2025.
Data from China underwhelmed, and stocks in Shanghai and Hong Kong kicked off the year on the back foot.
China's manufacturing sector remained in expansion territory at the end of the year, but the pace of growth ebbed, according to survey results on Thursday.
The Caixin manufacturing purchasing managers' index fell to 50.5 points in December, from 51.5 in November, sliding closer to the 50 mark that separates growth from decline.
Confidence among manufacturers eased, meanwhile.
"Chinese manufacturers were the least upbeat since September. This was as concerns about the outlooks for growth and trade, especially amidst the US tariffs threat, challenged hopes for new product- and policy-driven sales growth in the new year," S&P Global said.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.3% at 8,196.52
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Hang Seng: down 2.2% at 19,623.14
Nikkei 225: Tokyo closed for holiday.
S&P/ASX 200: up 0.5% at 8,201.20
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DJIA: closed down 29.51 points, 0.1%, at 42,544.22
S&P 500: closed down 0.4% at 5,881.63
Nasdaq Composite: closed down 0.9% at 19,310.79
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EUR: lower at USD1.0369 (USD1.0402)
GBP: lower at USD1.2532 (USD1.2535)
USD: lower at JPY156.70 (JPY156.74)
GOLD: higher at USD2,635.11 per ounce (USD2,610.61)
(Brent): higher at USD74.89 a barrel (USD74.21)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
09:00 GMT eurozone manufacturing PMI
09:00 GMT eurozone money supply
08:55 GMT Germany manufacturing PMI
09:30 GMT UK manufacturing PMI
13:30 GMT US initial jobless claims
14:45 GMT US manufacturing PMI
Annual UK house price growth accelerated last month, in a strong end to the year, according to figures from Nationwide. House prices rose 4.7% on-year in December, picking up speed from a 3.7% rise in November. On-month, prices rose 0.7% in December, after a 1.2% rise in November from October. "Mortgage market activity and house prices proved surprisingly resilient in 2024 given the ongoing affordability challenges facing potential buyers. At the start of the year, house prices remained high relative to average earnings, which meant that the deposit hurdle remained high for prospective first-time buyers. This is a challenge that had been made worse by record rates of rental growth in recent years, which has hampered the ability of many in the private rented sector to save," Nationwide analyst Robert Gardner said. "As a result, it was encouraging that activity levels in the housing market increased over the course of 2024 with the number of mortgages approved for house purchase each month rising above pre-pandemic levels towards the end of the year."
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There was an increase in the number of people in the UK who headed to the shops in December amid fears retailers face uncertain times after the festive season, analysts say. The 7.1% increase in footfall in December from November is the greatest month-on-month rise since an 8.7% jump was recorded in the same period in 2019, according to retail analysts MRI Software. People were spending at a range of destinations which meant there was a 13% boost in shopping centre footfall, a 5.7% rise in retail parks and a 4.8% increase on the high streets compared to the previous month. MRI Software's marketing & insights director Jenni Matthews warned that "the surge in festive footfall may well be the last big splurge for many consumers ahead of what could be a spending freeze heading into early 2025". Shoppers may have been lured to retail parks, which offer an array of stores and leisure activities, and to high streets that offer festive events and attractions as these destinations have "diversified since the pandemic to accommodate evolving consumer needs", according to Matthews. She said: "Retail parks and shopping centres have invested in more leisure and hospitality amenities to provide consumers with that experiential element, and one which caters for the entire family.
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Ireland's manufacturing sector suffered its steepest decline in six months to round off 2024, numbers on Thursday showed. The AIB Ireland manufacturing purchasing managers' index fell to 49.1 points in December, from 49.9 in November. The former reading was just below the 50-point mark which separates growth from decline, while the December print came in further behind the neutral threshold, suggesting the sector slipped deeper into the doldrums. "Goods producers reported a sharp drop in input buying and a shift towards tighter inventory management in response to fewer workloads. Employment nonetheless increased for the first time in four months. This reflected a more upbeat assessment of the business outlook. Manufacturers signalled the strongest business activity expectations for the year ahead since September 2023," S&P Global said. "Although only indicating a marginal downturn in overall business conditions, the latest reading was the lowest since June and well below the long-run series average (52.0)." "Unfavourable demand conditions" kept a lid on production, S&P Global said, and new work fell for the second month in a row. The fall in new work was "was only marginal and less marked than in the previous month", however.
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COMPANIES - FTSE 100
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Vodafone's EUR8 billion sale of its Italian arm to Swisscom has been completed. As part of the deal, the Berkshire-based telecommunications firm will continue to provide certain services to Vodafone Italy "for a period of up to five years post deal completion". "Proceeds from this sale will be used to reduce Vodafone group net debt and the board will target to return to shareholders up to EUR2.0 billion," Vodafone affirmed.
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Investment firm Pershing Square said it will exit Euronext Amsterdam later this month, after a delisting request was submitted in early December. The last day of trading of shares in the company in Amsterdam will be on January 30. The move will "reduce regulatory complexity and improve liquidity of PSH's shares", explained Chair Rupert Morley last month.
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COMPANIES - FTSE 250
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Chrysalis Investments said it has entered into a "settlement agreement" with Revolution Beauty. Chrysalis, a former shareholder in the beauty products seller, said Revolution will pay "a non-material sum". The figure is less than 1% of the Chrysalis market capitalisation of around GBP613.3 million, the investment firm said. Back in April, Chrysalis said it had issued legal claims for a total of GBP45.2 million against Revolution Beauty. It said it was not "satisfied with the limited responses received from Revolution Beauty and its legal advisers to date". Revolution Beauty on Thursday said Chrysalis "did not subsequently, and has not, filed any claim with the court". Revolution said: "Revolution Beauty and Chrysalis have now reached a confidential settlement without any admission of liability by either party. Chrysalis will not proceed with any claim against the company. The company has agreed to pay Chrysalis a non-material sum which will not have a material impact on the company's financial and cash position." In February, with its annual results at the time, Chrysalis said it has "potential claims" under the UK financial services & markets act against Revolution Beauty. Chrysalis bought into the AIM listing in July 2021, purchasing around GBP45 million worth of shares, and sold its holding in "late 2022" for roughly GBP5.7 million, so about GBP40 million off what it initially paid. "The original share purchase was made on the basis that information provided to the company by Revolution prior to the company's purchase of the shares in Revolution, and during the period in which the shares were held prior to their sale, contained misstatements and material omissions," Chrysalis claimed at the time. Revolution Beauty had "strongly" contested the allegations, it said in April.
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OTHER COMPANIES
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Hutchmed China said it has struck deals to sell 45% of its stake in Shanghai Hutchison Pharmaceuticals for around USD608 million in cash. The holding will be sold to GP Health Service Capital and Shanghai Pharmaceuticals Holding. "Hutchmed has been exploring opportunities to monetize the underlying value of SHPL, a non-core, non-consolidated joint venture. These transactions would allow Hutchmed to focus on its core business of discovering, developing and commercializing novel therapies for the treatment of cancers and immunological diseases, including advancing its next-generation antibody-targeted-therapy conjugate programmes," it said. The AIM listing plans to use the funds from the sale to "further develop its internal pipeline and drive its core business strategy forward". GP Health Service Capital will acquire 35%, while Shanghai Pharma has agreed to acquire 10%. Following the deals, Hutchmed will have a 5% stake in SHPL. The deals are expected to close in the first-quarter. Separately, Hutchmed said a new drug application in China for the drug tandem of Orpathys and Tagrisso to treat some lung cancer patients has been accepted and granted priority review in China. "This acceptance also triggers a milestone payment from AstraZeneca," it added.
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Poolbeg Pharma has agreed to be acquired by Hookipa Pharma. Poolbeg shareholders are to receive 0.03 Hookipa shares for every Poolbeg share owned. Hookipa will undertake a private placement, netting USD30 million, which will "provide sufficient capital for the enlarged business to realize meaningful expected value inflection points". Hookipa plans to remain listed on the Nasdaq and will apply for Poolbeg's AIM listing to be cancelled.
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By Eric Cunha, Alliance News news editor
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