6th Jan 2025 07:44
(Alliance News) - London's FTSE 100 is set for an underwhelming start to the first full trading week of the new year, with a slew of purchasing managers' index readings in focus on Monday.
As the week progresses, eyes turn to US jobs data, with a host of readings culminating with Friday's nonfarm payrolls.
"We get our first major market event of the calendar year on Friday, when nonfarm payrolls prints. With the labour market perhaps the biggest sentiment driver (versus inflation) in the near-term, we point out that: 1) the December figure probably still comes with a lot of seasonal noise and 2) labour market demand still looks expansionary," analysts at Jefferies commented.
Friday's US jobs report is expected to show hiring eased to 150,000 last month, from 227,000 in November, according to FXStreet cited consensus.
Eyes this week will also be on inflation data in the eurozone. A reading for Germany is released this afternoon, before consumer price index data for the single currency area as a whole on Tuesday morning.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 0.1% at 8,217.68
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Hang Seng: down 0.5% at 19,669.24
Nikkei 225: down 1.5% at 39,307.05
S&P/ASX 200: up 0.1% at 8,257.40
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DJIA: closed up 339.86 points, 0.8% at 42,732.13
S&P 500: closed up 1.3% at 5,942.47
Nasdaq Composite: closed up 1.8% at 19,621.68
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EUR: higher at USD1.0316 (USD1.0297)
GBP: higher at USD1.2448 (USD1.2414)
USD: higher at JPY157.60 (JPY157.33)
GOLD: lower at USD2,630.91 per ounce (USD2.641.67)
(Brent): flat at USD76.32 a barrel (USD76.33)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
09:00 GMT eurozone composite PMI
08:55 GMT Germany composite PMI
13:00 GMT Germany CPI
09:30 GMT UK composite PMI
14:45 GMT US composite PMI
15:00 GMT US factory orders
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Last year was one of the quietest on record for the London Stock Exchange, which saw the largest outflow of companies since the global financial crisis, stark new analysis shows. Takeaway firm Just Eat Takeaway, Paddy Power owner Flutter Entertainment, travel group Tui, and equipment rental firm Ashtead Group were among those to announce plans to ditch their main UK listing. The London Stock Exchange saw 88 companies delist or transfer their primary listing from the main market – the most since 2009, according to data from auditing firm EY. A number of these firms said declining liquidity and lower valuations were key reasons for moving away from London, particularly to the US which offers more capital and trading activity, EY said. Betting firm Flutter Entertainment switched its primary listing to New York, where it said it could access the "world's deepest and most liquid capital markets". Just Eat Takeaway abandoned its listing on the LSE altogether, citing the "administrative burden, complexity and costs" associated with keeping its shares in London as one of the reasons to quit. Other companies such as Watches of Switzerland Group faced pressure from activist investors to swap their main stock market listing to the US. A flurry of companies exiting or moving their primary listing to foreign markets was compounded by a shortage of companies launching their shares in 2024.
There were a total of 18 new listings, known as initial public offerings, in London last year, EY found.
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Ireland's service sector economy ended the year strongly, though the pace of its expansion eased slightly, numbers showed. The AIB services business activity index faded to 57.1 points in December, from 58.3 in November, but remained comfortably above the 50 point neutral mark. "The final reading of 2024 indicated a sustained sharp rise in services activity – the second-strongest since April 2023 – and the index remained well above the long-run trend level of 55.1," S&P Global said. "All four sub-sectors posted strong growth of business activity in December. Transport, tourism & leisure (60.9) was the only sector to record faster growth than in November, taking it top of the rankings for the first time since May 2023. Technology, media & telecoms (56.8), financial services (55.9) and business services (55.9) registered similarly solid, albeit softer rates of expansion at the end of 2024." The composite purchasing managers' index, a measure of the wider private sector, eased but remained in positive territory. The composite PMI faded to 52.1 in December from 55.2 in November. "The services sector was again the main driver of growth in December, as manufacturing output declined at the fastest rate since June," S&P Global said.
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BROKER RATING CHANGES
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Citigroup cuts Rolls-Royce to 'neutral' (buy)
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HSBC raises Spectris to 'buy' (hold) - price target 2,900 (2,800) - pence
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COMPANIES - FTSE 250
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Diversified Energy said it has acquired natural gas properties and related facilities within Virginia, West Virginia, and Alabama for a price of USD45 million. The "bolt on" deals boost the firm's ability to to generate coal mine methane revenue, it said. "This asset package is strategically located within our existing southern Appalachia operations and is uniquely positioned to benefit from the operational expertise of our field teams. Additionally, with this strategic acquisition, we anticipate capturing additional revenue from the sale of incremental environmental credits with our growth in the production of coal mine methane," Chief Executive Officer Rusty Hutson commented. The assets have been acquired from Summit Natural Resources and the deal will be fully funded through cash on hand and current liquidity. The acquisition is expected to close in the first-quarter of this year, the US-focused natural gas producer said.
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OTHER COMPANIES
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Equipmake Holdings said it has received "credible interest" from a range of possible investors, partners and suitors as it progresses with a strategic review and formal sale process. Last month, the electrification solutions developer said it launched a strategic review and formal sale process. The company said the review will cover a range of options, including raising additional equity capital from existing shareholders and new investors, seeking a partner to support the company's growth or the sale of the company or a merger with another public entity. Equipmake said on Monday: "Since the commencement of the strategic review and formal sale process, the company has received credible interest from a number of potential strategic investors, partners and potential acquirers. Discussions with these parties are ongoing as the board continues to work to deliver orders for existing customers and identifying new business to support the pathway to profitability in the mid-term."
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Avon Technologies said its Team Wendy Ceradyne arm has received a new order with the US Defense Logistics Agency. The deal, worth USD18 million, forms part of the US Army next generation integrated head protection system framework. Avon Chief Executive Officer Jos Sclater commented: "We continue to see good levels of demand for Team Wendy's head protection systems from the US DOD demonstrating our leading ballistic shell and traumatic brain injury mitigation technology and long-term contract positions. We look forward to continuing our support to the U.S. Military with this vital, lifesaving, protection equipment."
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Engage XR Holdings warned revenue will come in below market expectations, due to delays in finalising some larger Middle East pacts. The virtual reality technology company expects to report 2024 revenue of EUR3.4 million, down from EUR3.7 million in 2023, and below market expectations. This is due to "delays in finalisation of some larger contracts in the Middle East and the continued delayed deployment of the previously announced contract with a Middle Eastern client". Its loss before interest, tax, depreciation and amortisation is expected to be EUR4.0 million, unmoved on-year. It added: "Looking ahead, the group anticipates significant growth opportunities through working with partners in the Middle East throughout 2025 and beyond in both education and training verticals. The group's strong pipeline is evidence of the progress being made with partners in the Middle East and in the USA."
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Lender Shawbrook Group is sizing up a London listing again, in a move which would get the UK initial public offering market moving in 2025, Sky News reported on Saturday. Shawbrook, once part of the London Stock Exchange before being acquired by a consortium led by BC Partners and Pollen Street Capital in 2017, could float in a deal which values it at GBP2 billion. BC Partners and Pollen Street Capital are close to appointing Goldman Sachs to work on a possible IPO for Shawbrook, Sky News reported. Barclays is among the other investment banks that could be added to that work "in the near future", according to Sky. Citing people close to the situation, Sky News reported that a decision to move ahead with a float has not been made yet.
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By Eric Cunha, Alliance News news editor
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