25th Feb 2025 07:52
(Alliance News) - London stocks were called lower on Tuesday, with the data docket including US consumer confidence and the Redbook index.
"A dearth of top-tier data lies ahead," Pepperstone's Michael Brown commented, "though I guess this afternoon's US consumer confidence figures might attract more attention than usual, given not only ongoing worries over the US economy, but also the dismal (albeit politically skewed) UMich sentiment figures on Friday.
"Elsewhere, this morning's eurozone wages figures shan't move the needle for the ECB, who are set for a 25bp cut next Thursday in any case, while a deluge of speakers from the Fed, ECB, and BoE are unlikely to make many remarks of interest. Utterances from the Dallas Fed's Logan on the balance sheet are likely to prove of most interest here."
In corporate news, Smith & Nephew reported increased revenue and pretax profit.
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 17.2 points, 0.2%, at 8,641.78
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Hang Seng: down 1.4% at 23,009.31
Nikkei 225: down 1.4% at 38,237.79
S&P/ASX 200: down 0.7% at 8,251.90
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DJIA: closed up 33.19 points, 0.1 %, at 43,461.21.
S&P 500: closed down 0.5% at 5,983.25
Nasdaq Composite: closed down 1.2% at 19,286.93
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EUR: flat at USD1.0470 (USD1.0471)
GBP: lower at USD1.2623 (USD1.2634)
USD: lower at JPY149.31 (JPY149.64)
GOLD: lower at USD2,937.26 per ounce (USD2,942.87)
OIL (Brent): flat at USD74.87 a barrel (USD74.85)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
08:30 EST Canada manufacturer sales
11:00 GMT Ireland average weekly earnings
08:55 EST US Redbook index
09:00 EST US house price index
09:00 EST US S&P/Case-Shiller home price index
10:00 EST US consumer confidence
10:00 EST US Richmond Fed manufacturing index
13:00 EST US money supply
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The energy bills of millions of British households are to rise by 6.4% from April 1 when Ofgem increases its price cap for a third consecutive quarter. The regulator said the increase, which will raise the average bill for households in England, Scotland and Wales on a standard variable tariff from the current GBP1,738 a year to GBP1,849, followed a recent spike in wholesale prices. The rise will equate to GBP111 for an average household per year, or around GBP9.25 a month, over the three-month period of the price cap. This is 9.4% or GBP159 higher than this time last year but GBP531 or 22% lower than at the height of the energy crisis at the start of 2023. Ofgem Chief Executive Jonathan Brearley said: "We know that no price rise is ever welcome, and that the cost of energy remains a huge challenge for many households. "But our reliance on international gas markets leads to volatile wholesale prices, and continues to drive up bills, which is why it's more important than ever that we're driving forward investment in a cleaner, homegrown system. "Energy debts that began during the energy crisis have reached record levels and without intervention will continue to grow. This puts families under huge stress and increases costs for all customers. We're developing plans that could give households with unmanageable debt the clean slate they need to move forward."
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The German economy declined as anticipated in the fourth quarter of past year, data published by the Federal Statistical Office showed. German gross domestic product fell by 0.2% quarterly on a seasonally and calendar adjusted basis. It followed growth of 0.1% in the third quarter from the second. On-year and price adjusted, the German economy declined by 0.4% in the fourth quarter, after 0.1% growth in the third quarter. The numbers confirm the results published in late January.
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US tariffs on Canada and Mexico are moving forward as planned, US President Donald Trump said addressing reporters after meeting with his French counterpart Emmanuel Macron, who urged "fair competition" in trade. Shortly after taking office, Trump announced duties of up to 25% on Canadian and Mexican imports, citing illegal immigration and the flow of deadly fentanyl. But he issued a last-minute halt to the levies for a month as talks continued. This pause ends next Tuesday. Trump's update came after Mexican President Claudia Sheinbaum said earlier Monday that talks with Washington would continue this week to avoid the sweeping levies. She expressed optimism about reaching a deal with Trump, hinting at potential levies on Chinese goods to secure an agreement. Sheinbaum also signalled that Mexico was open to an early review of its trade agreement with the US and Canada ahead of a 2026 deadline. Separately, Canadian Foreign Minister Melanie Joly told reporters Monday that "the threat of tariffs is a real one, and may continue for a while."
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Trump has suggested it will be Europe that 'make[s] sure nothing happens" in Ukraine when it comes to security, after he said that Vladimir Putin would be happy to see peacekeeping forces on the ground in the event of a deal being struck to end the war. The US's role in any future deal is likely to be among the topics up for discussion later this week when UK Prime Minister Keir Starmer heads to Washington for talks, after he reiterated his calls for a US "backstop" to any deal. It will be Trump's second meeting with a European leader in days, following the visit of French President Emmanuel Macron on Monday, which was the third anniversary of Russia's invasion. In an interview with Fox News following their meeting, Macron said it was "feasible" to talk about the start of negotiations for a sustainable peace within weeks. Starmer avoided directly criticising the US leader last week after he called Zelensky a "dictator", but did back the president in a call in which he called him the "democratically elected leader" of Ukraine. Starmer marked the third anniversary of the conflict on a call with other allies of Kyiv, telling them that Putin "does not hold all the cards in this war".
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Taiwan detained a Chinese-crewed cargo ship on Tuesday after a subsea telecoms cable was severed off the island, the coast guard said. It is the latest in a series of Taiwanese undersea cable breakages, with previous incidents blamed on natural causes or Chinese ships. Taiwan's Chunghwa Telecom reported the cable between Penghu, a strategic island group in the sensitive Taiwan Strait, and Taiwan was disconnected early Tuesday, the Ministry of Digital Affairs said. The Togolese-registered ship Hongtai was intercepted in the area and escorted back to Taiwan, the coast guard said. The case was being "handled in accordance with national security-level principles", it added. "Whether the cause of the undersea cable breakage was intentional sabotage or a simple accident remains to be clarified by further investigation."
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BROKER RATING CHANGES
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Jefferies raises Anglo American price target to 3,000 (2,850) pence - 'buy'
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Goldman Sachs cuts B&M European Value Retail to 'neutral' (buy) - price target 310 (430) pence
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Jefferies cuts Indivior plc price target to 975 (1,220) pence - 'buy'
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COMPANIES - FTSE 100
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Croda International announced its annual results for 2024. Sales decreased 3.9% to GBP1.63 billion, from GBP1.69 billion the year before. Pretax profit fell 12% to GBP207.8 million, from GBP236.3 million, and basic earnings per share dipped 7.3% to 113.5 pence from 122.5p. However Croda increased the 2024 dividend by 0.9% on-year, to 110.0p from 109.0p. Croda also noted that Consumer Care sales rose 4% to GBP920.0 million, although Life Sciences sales fell 16% to GBP504.3 million. "2024 was another transitional year, following two years of unprecedented demand in 2021 and 2022, with an industry-wide reset from 2023," said Chief Executive Officer Steve Foots. "Consumer Care saw progress in all areas, with another standout performance from Fragrances & Flavours and good growth of New & Protected Products. Life Sciences was impacted by the absence of Covid-19 lipids and weak sales into consumer health markets, but better demand in Crop Protection drove an improved performance in the second half year. Whilst sales growth was lower than we hoped in a subdued demand environment, proactive actions to rebase costs and drive efficiencies enabled us to deliver profits in line with our guidance."
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Smith & Nephew reported earnings for 2024. Revenue increased 4.7% to USD5.81 billion from USD5.55 billion in 2023. Pretax profit surged to USD498 million from USD290 million, and earnings per share rose 56% to 47.2 cents from 30.2 cents. For the fourth quarter, Smith & Nephew noted that revenue increased 7.8% on-year to USD1.57 billion from USD1.46 billion. "We finished the year strongly and US Reconstruction was again sequentially better," CEO Deepak Nath said. "Our innovation continued to deliver, with more than 60% of revenue growth in 2024 coming from products launched in the last five years. We have launched nearly 50 new products over the last three years and have an exciting pipeline for 2025. There is much more to be done, but we have made solid progress fixing the foundations and expect a step-up in returns in 2025, including significant margin expansion. We are confident that this will be the year when transformation starts to unlock substantial value for our shareholders."
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COMPANIES - FTSE 250
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Lion Finance, which recently changed its name from Bank of Georgia, declared a GEL5.62 per share final dividend for 2024. The total payout was GEL9.00 per share, up 13% on-year. Pretax profit before items rose to GEL2.18 billion, around GBP620.3 million, in 2024 from GEL1.63 billion in 2023. Net interest income increased to GEL2.36 billion from GEL1.62 billion. The company said it is aiming for an annual capital distribution ratio of between 30% and 50% in the medium term. Also, Lion Finance's board has approved a GEL107.7 million extension to its share buyback programme, which it said "will commence shortly and end no later than the company's annual general meeting 2025". The AGM is expected to be held in June.
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JPMorgan Emerging Markets Investment Trust reported its half-year results for the period ended December 31. Its net asset value total return was positive 2.8%, outperforming a 1.0% return from its benchmark the MSCI Emerging Markets index. It also declared an interim dividend of 0.65 pence, up from 0.60p the year before. NAV per share was 124.3p at December 31, up from 118.2p one year prior. Chair Aidan Lisser commented: "While emerging markets equities showed a positive performance over the full calendar year, the combination of a strong US equity market, rising bond yields, and a strengthening US dollar, along with other macroeconomic and geopolitical factors, contributed to a challenging period in the second half of the year, culminating in a weak final quarter of 2024."
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OTHER COMPANIES
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Tesla has started offering advanced self-driving functions for its cars in China, including autopilot on city streets, the company announced on Tuesday. The announcement comes after years of attempts to overcome regulatory hurdles blocking the update in the world's largest automobile market. Tesla said in a statement on its WeChat page that it would gradually roll out a software update that includes "automatic Autopilot-assisted driving on city streets", as well as a rearview mirror function that detects whether drivers are paying attention. The functions described are similar to the "Full Self-Driving" capability it offers in the US. Cars with that capability are not fully autonomous, and are meant to be used under driver supervision. The update "has already been released for some car models, and will be gradually rolled to other suitable car models", Tesla said. China is a major market for Tesla, where the company has two factories and is trying to compete with fast-growing domestic manufacturers.
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By Emma Curzon, Alliance News reporter
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