11th Mar 2025 07:56
(Alliance News) - London's FTSE 100 is set to rise on Tuesday morning, clawing back some lost ground from the start of the week and shrugging off bearish trade in New York overnight.
Tech shares were among the worst hit across the Atlantic, continuing a drab run for the sector so far this year. The Nasdaq Composite is down 9.5% so far in 2025. Tesla shares slumped 15% on Monday, its biggest single day drop since September 2020.
Fears over the outlook of the US economy hit New York hard on Monday.
Over the weekend, US President Donald Trump declined to rule out a recession this year.
"I hate to predict things like that," he told Fox News when asked directly about a possible recession in 2025.
"There is a period of transition, because what we're doing is very big – we're bringing wealth back to America," he said, adding, "It takes a little time."
The economic calendar on Tuesday is a quiet one, with a US job openings and labour turnover survey the highlight.
Pepperstone analyst Michael Brown commented: "As has been the vibe with US figures for some time now, the market shan't be in any mood to forgive a soft print, which will only serve to exacerbate existing nervousness over waning economic momentum."
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 0.2% at 8,614.32
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Hang Seng: down 0.1% at 23,767.48
Nikkei 225: down 0.6% at 36,793.11
S&P/ASX 200: down 0.9% at 7,890.10
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DJIA: closed down 890.01 points, 2.1%, at 41,911.71
S&P 500: closed down 2.7% at 5,614.56
Nasdaq Composite: closed down 4.0% at 17,468.32
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EUR: higher at USD1.0873 (USD1.0838)
GBP: lower at USD1.2902 (USD1.2897)
USD: lower at JPY147.01 (JPY147.27)
GOLD: lower at USD2,897.60 per ounce (USD2,903.30)
OIL (Brent): lower at USD69.42 a barrel (USD69.54)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
12:55 US Redbook index
14:00 US job openings and labour turnover survey
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Retail sales growth in the UK slowed in February, as many consumers prioritise saving and remain cautious with spending, data published by the British Retail Consortium and KPMG showed Tuesday.
Retail sales growth decelerated to 1.1% in the four weeks between February 2 and March 1, from 2.6% the month prior. On a like-for-like basis, it slowed to 0.9% from 2.5%. BRC Chief Executive Helen Dickinson said that while sales growth across non-food categories was mostly soft, it was boosted by online sales, especially regarding computing and electronics. Further, jewellery, watches and fragrance performed well due to Valentine's Day. Retailers were hopeful that the early March sunshine kickstarts spending on spring and summer clothes. Dickinson added: "This weak performance makes many retailers uneasy, especially as they brace for GBP7 billion of new costs from the Budget and packaging levy in 2025, as well as the potential impact of the Employment Rights bill. The industry is already doing all it can to absorb existing costs, but they will be left with little choice but to increase prices or reduce investment in jobs and shops, or both. The focus of the Employment Rights bill should be on unscrupulous employers but instead the industry faces ongoing uncertainty and a trajectory that risks punishing responsible businesses who provide valuable employment, particularly at entry level. It is time for government to course correct to ensure investment and growth are not undermined."
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US-Ukraine talks on a possible peace for Kyiv will begin on Tuesday as defence chiefs gather in France to draw up plans for a "coalition of the willing" to safeguard the country's security. All eyes will be on Saudi Arabia this week as discussions kick off between White House and Ukrainian delegations in the country as part of an intensive week of diplomacy to find a deal to end the war. Prime Minister Keir Starmer told US president Donald Trump he wanted the talks to have a "positive outcome" that would see military aid and intelligence-sharing resume when the pair spoke on Monday. The US leader paused the supply of weapons and crucial information for Kyiv's war effort following his public spat with Ukrainian president Volodymyr Zelensky. Meanwhile, military chiefs from potential members of the so-called "coalition of the willing" will meet in Paris, with French officials indicating around 30 countries could take part. Chief of the Defence Staff Admiral Tony Radakin will attend for the UK before Defence Secretary John Healey meets opposite numbers from France, Germany, Italy and Poland in the French capital on Wednesday. Starmer will lead a call with like-minded allies from the "coalition of the willing" on Saturday.
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A UK watchdog is considering a "redress" scheme as part of a motor finance saga. The Financial Conduct Authority said it is looking into whether firms "failed to comply with requirements" on discretionary commission arrangement. "If they have, we want to make sure consumers are appropriately compensated in an orderly, consistent and efficient way," the FCA said. The FCA noted a ruling by the Court of Appeal last year. The Court of Appeal ruled in favour of the appeals of three claimants, Johnson, Wrench and Hopcraft, against FirstRand Bank and Close Brothers Group - the so-called Hopcraft case. The FCA said: "Since we launched our review, a ruling by the Court of Appeal has raised the possibility of widespread liability among motor finance firms wherever commissions were not properly disclosed to customers." It added: "We want to provide as much certainty as possible to firms, consumers and stakeholders. So, we are confirming that if, taking into account the Supreme Court's decision, we conclude motor finance customers have lost out from widespread failings by firms, then it's likely we will consult on an industry-wide redress scheme. We previously said it is more likely than when we started our review that we will introduce an alternative way of dealing with complaints." The Supreme Court will hear an appeal against the Court of Appeal's judgment early next month. "We are no longer planning a further announcement in May. Instead, we will confirm within 6 weeks of the Supreme Court's decision if we are proposing a redress scheme and if so, how we will take it forward," the FCA added.
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BROKER RATING CHANGES
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UBS raises Segro to 'buy' (neutral) - price target 875 (985) pence
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COMPANIES - FTSE 100
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Spirax said it achieved sales in line with expectations, despite a tricky trading environment characterised by weak industrial production. The thermal energy and fluid technology company said pretax profit in 2024 amounted to GBP258.9 million, up 5.9% from GBP244.5 million in 2023. Revenue faded 1.0% to GBP1.67 billion from GBP1.68 billion, but climbed 4% on an organic basis. The organic rise was despite "weaker than expected" global industrial production growth of 1.7%. "All three of our businesses delivered organic sales growth with margins in line with our expectations, despite weaker than expected IP in the second half. I am particularly pleased with progress in ETS, where improvements to manufacturing throughput supported higher sales and improved margin," Chief Executive Officer Nimesh Patel said. Spirax lifted its final dividend by 3.1% to 117.5 pence per share from 114p. Its total dividend was 3.1% higher also at 165.0p from 160.0p. Looking to this year, it expects "restructuring to realise annualised benefits of approximately GBP35 million for investment in organic growth". It predicts an organic growth outcome "consistent" with 2024 and ahead of industrial production growth.
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Housebuilder Persimmon reported improved annual earnings and said its sales rate has picked up so far in the new year. Pretax profit in 2024 rose 2.1% to GBP359.1 million from GBP351.8 million. Revenue improved 15% to GBP3.20 billion from GBP2.77 billion. "Persimmon's disciplined investment and significant operational improvements in recent years has created a stronger business. This is demonstrated by our growth in 2024, with completions, outlets and profit all up," CEO Dean Finch said. New home completions rose 7% to 10,664 from 9,922. "The underlying market fundamentals remain strong and we are encouraged by the further improvement in our sales rates in the early weeks of this year. The government's welcome planning reforms and pro-housebuilding agenda demands more of the high-quality, affordable homes which are Persimmon's core strength, providing a positive tailwind," Finch added. Persimmon maintained its annual dividend at 60p per share. Persimmon said: "We entered 2025 with an improved forward order book and have continued to add to it since the start of the year. In the first nine weeks of 2025, our net private sales rate per outlet per week was 0.67, up 14% compared to the same period last year." It added: "With this progress in our forward order book, alongside an anticipated increase in the delivery of affordable homes, we are targeting 11,000-11,500 completions for 2025."
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COMPANIES - FTSE 250
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Interdealer broker TP ICAP said its annual profit more than doubled and said a US listing for its Parameta Solutions could occur as early as the second quarter of this year. The firm said pretax profit jumped to GBP214 million from GBP96 million. Revenue climbed 2.8% to GBP2.25 billion from GBP2.19 billion. "We are progressing strategic options for Parameta Solutions. Our focus is a listing in the United States, with the group maintaining a majority stake. Should we proceed, with no certainty we will do so, the listing could occur as early as Q2 2025. Our priority is to create sustainable shareholder value and retain, for the long-term, the majority of any upside potential, while providing Parameta with a greater ability to grow on a standalone basis," CEO Nicolas Breteau said. Parameta Solutions provides over-the-counter financial data and analytics to institutional clients. TP ICAP announced a final dividend of 11.3p per share, a rise of 13% from 10.0p. Its total dividend was 8.8% higher at 16.1p from 14.8p. In addition, it announced the launch of a GBP30 million share buyback. "TP ICAP is cash generative with a prudent capital management framework. The fourth buyback highlights the board's continued confidence in the future prospects of TP ICAP, reflects its strong financial position, and is consistent with its dynamic capital management strategy, which is a key priority. TP ICAP is committed to releasing more cash for ongoing business investment, including targeted M&A, where appropriate, debt reduction and further capital returns," it said.
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Domino's Pizza Group said it has started 2025 "positively" and it named a new chair, as incumbent Matt Shattock plans to step down. The firm, which is the master franchise holder in the UK and Ireland for US pizza delivery brand owner Domino's Pizza, believes it is "well placed to thrive" this year and beyond. In the 52 weeks ended December 29, pretax profit fell 12% GBP124.9 million from GBP142.3 million. On an underlying basis, however, it improved 5.5% to GBP107.3 million from GBP101.7 million. Revenue fell 2.3% to GBP664.5 million from GBP679.8 million. On a 52-week basis, revenue fell 0.4%. The prior financial year was 53 weeks long. "Today's results show the benefits of our long-term strategy. We've capitalised on our competitive strengths, agreed a new five year framework with our franchise partners and opened 54 stores. Our trading momentum accelerated as the year progressed, our delivery channel returned to growth and we delivered strong underlying earnings growth. This has required relentless focus by our colleagues and franchise partners, and I thank them for their brilliant work," CEO Andrew Rennie said. "In 2024 we made disciplined investments in new growth opportunities, Shorecal in Ireland and DP Poland, partly financed through recycling store disposal proceeds. Today we have announced an additional investment in our Northern Irish JV, further enhancing our ability to drive growth. We continue to explore targeted, accretive opportunities, which would be financed within our existing balance sheet capacity." The company upped its final dividend by 4.2% to 7.5p per share from 7.2p. It means the total dividend is 11.0p, up 4.8% from the prior year. Domino's Pizza Group announced Ian Bull as its next chair, replacing Shattock "who has informed the board of his wish to step down from the role". Bull is currently senior independent director. "Ian first joined the board in April 2019 and has a deep knowledge of the Domino's business, as well as extensive relevant experience from his executive career during which he served as CFO of leisure and hospitality businesses including Greene King, Ladbrokes and Parkdean Resorts," the company said. Shattock will step down following the annual general meeting on April 24.
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OTHER COMPANIES
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boohoo Group triumphantly declared "Debenhams is back" and the fast fashion retailer announced a rebrand. It will "now go forward as Debenhams Group". The "reinvigorated" Debenhams is now the "majority contributor" to group profit, boohoo said. "Debenhams is growing rapidly. The business model is stock-lite and capital-lite. It is very profitable and highly cash generative. For our consumers, Debenhams is once again becoming their destination of choice. It is an iconic British heritage brand with huge brand awareness and significant consumer trust," the firm said. "Our ongoing business review has confirmed that Debenhams, its business model and its technology is at the epicentre of our group going forward. It is the driving force of the business and will lead the group recovery. It is at the heart of the investment case. The successful Debenhams turnaround, led by Dan Finley, group chief executive officer, provides the blueprint for the wider turnaround of the group." Debenhams had entered administration back in 2020. boohoo announced a deal in 2021 to acquire intellectual property of Debenhams from administrators. boohoo said that for the full-year to February 2025, it expects to report revenue of GBP1.22 billion, a decline of 16% from GBP1.46 billion. Debenhams revenue rose 10% to GBP204.6 million from GBP186.0 million. In addition, boohoo announced Phil Ellis will become its finance chief with immediate effect, replacing Stephen Morana. "Phil is currently finance director of Debenhams and managing director of DebenhamsPay+. He has worked for the Group CEO, Dan Finley for 6+ years," the firm added. "Phil has extensive commercial finance experience in the retail industry and joined the group in 2022 as Finance Director of Debenhams, immediately prior to that he held senior financial roles at JD Sports for 6 years, and 7 years at The Very Group." The planned name change requires shareholder approval, which it will pursue at a general meeting penned for March 28.
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By Eric Cunha, Alliance News news editor
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Related Shares:
SegroBoohooDominosTP ICAPPersimmonSpirax-Sarco