20th Jun 2025 07:53
(Alliance News) - The FTSE 100 was called in the green on Friday, while new UK labour market data has shown "modest growth" in new postings last month.
Meanwhile, the Israel-Iran conflict continues although UK Foreign Secretary David Lammy said after talks at the White House that "a window now exists within the next two weeks to achieve a diplomatic solution".
However, Swissquote's Ipek Ozkardeskaya countered: "The worsening global geopolitical weather keeps investors in a cautious mode, and will likely prevent them from taking too much risk before the weekend. While the news that the US is giving itself two weeks to decide whether to intervene in Iran – which is slightly better than earlier reports suggesting they would go in this weekend – has somehow eased tensions...I'm not sure the US buying itself time can be interpreted as a sign of de-escalation."
She added that "what's happening feels like dark clouds gathering in the sky. And the calm in the market could be the calm before a storm."
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 41.4 points, 0.5%, at 8,833.20
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Hang Seng: up 0.8% at 23,418.06
Nikkei 225: broadly flat at 38,504.02
S&P/ASX 200: down 0.3% at 8,502.70
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New York stocks were closed on Thursday for Juneteenth.
DJIA: closed down 41.44 points, 0.1%, at 42,171.66 on Wednesday
S&P 500: closed down 1.85 points at 5,980.87 on Wednesday
Nasdaq Composite: closed up 0.1% at 19,546.27 on Wednesday
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US 10-year Treasury yield: 4.37% (4.36% on Wednesday)
US 30-year Treasury yield: 4.87% (4.86% on Wednesday)
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EUR: higher at USD1.1520 (USD1.1468)
GBP: higher at USD1.3482(USD1.3429)
USD: lower at JP145.32 (JPY145.65)
GOLD: lower at USD3,346.59 per ounce (USD3,368.94)
OIL (Brent): lower at USD76.66 a barrel (USD78.59)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
13:30 BST US Philadelphia Fed manufacturing index
15:00 BST eurozone consumer confidence
15:00 BST US Conference Board leading index
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UK retail sales declined by more than expected in May, the Office for National Statistics reported on Friday. UK retail sales fell by 2.7% in May from April. This was against a 1.3% rise in April from March and worse than the 0.5% decrease expected by FXStreet-cited market consensus. On an annual basis, retail sales decreased by 1.3% in May, swung from 1.4% growth in April. Market consensus had expected a 1.7% increase. Excluding fuel, sales decreased by 2.8% on-month, worse than consensus for a 0.5% decrease and swinging from April's 1.4% growth. They fell 1.3% on a year before, compared to April's 5.2% rise and FXStreet-cited consensus of a 1.8% increase.
Separately, the ONS reported that the UK public sector net borrowing requirement was positive GBP17.69 billion in May - meaning net repayment - against negative GBP20.05 billion in April.
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Producer prices in Germany declined at a faster annual pace in May, widening the drop seen in April, driven by another sharp fall in energy costs, data from Destatis showed on Friday. According to the Federal Statistical Office, producer prices for industrial products were 1.2% lower in May than in the same month last year, in line with the FXStreet-cited consensus and following a 0.9% annual decline in April. Compared to April 2025, prices slipped by 0.2%. The year-on-year decline was primarily due to lower energy prices, which dropped 6.7% annually and 0.9% from the previous month. Electricity prices fell by 8.1% compared to May 2024, while natural gas was 7.1% cheaper and mineral oil products fell 9.6%. Excluding energy, producer prices rose 1.3% on the year and remained flat month-on-month. Capital goods were 1.9% more expensive than a year earlier, with machinery and motor vehicles both recording annual increases. Consumer goods prices rose 3.6%, driven by a 4.2% rise in food costs. Intermediate goods prices declined 0.2% compared to May 2024 and the previous month.
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David Lammy will travel to Geneva on Friday for talks with the Iranian foreign minister and European allies as the UK presses for a diplomatic solution to the Israel-Iran conflict. The UK Foreign secretary is set to meet Abbas Araghchi alongside his counterparts from France, Germany and the EU as he seeks to negotiate a settlement before US President Donald Trump decides on whether to take military action against Tehran. In a statement read by his press secretary on Thursday, Trump said there was still "a substantial chance of negotiations" and said he would make a decision on deploying US forces "within the next two weeks". Trump had previously said he "may" join Israeli strikes against Iran and its nuclear programme, but added: "I may not do it. I mean, nobody knows what I'm going to do." Friday's meeting with the so-called EUR3 countries follows Lammy's visit to Washington, where he met US Secretary of State Marco Rubio in the White House on Thursday evening to discuss "how a deal could avoid a deepening conflict". The foreign secretary said: "The situation in the Middle East remains perilous. We are determined that Iran must never have a nuclear weapon." Adding that a "window now exists within the next two weeks to achieve a diplomatic solution", Lammy said: "Now is the time to put a stop to the grave scenes in the Middle East and prevent a regional escalation that would benefit no one."
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UK consumer confidence improved marginally in June despite the "dark shadow" of inflation and turmoil in the Middle East, figures show. GfK's long-running consumer confidence index rose two points but remains firmly in negative territory at minus 18 in June, up from minus 20 in May. Confidence in the general economy over the coming year rose five points, driving the improvement, but still remains at minus 28, 17 points worse than last June. The forecast for personal finances over the next 12 months remained unchanged at positive two, two points down on this time last year.
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The UK job market saw "modest growth" in new postings in May, in a sign "more of hope than concern," according to the latest labour market tracker from the Recruitment & Employment Confederation and Lightcast. The number of new job postings edged 0.3% higher to 726,084 in May compared to April. However, the overall number of active job postings was 1.4 million, down 1.8% from April as older adverts rolled off websites. Scotland and the south-west showed the highest increase in the total number of job postings, up 9.2% and 4.7% respectively. This is likely to reflect growing demand as the summer tourist season begins, REC noted. REC Chief Executive Neil Carberry said the figures are a sign "more of hope than concern". "This month's postings data reflects both anecdote from recruiters and the core ONS workforce jobs survey – that the labour market is more stuck than going backwards. Despite the headwinds of tax rises and lower growth there seems to be some resilience. After a long jobs market slowdown, a second month of weak growth in new postings is a sign more of hope than concern," Carberry said.
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The EU has banned Chinese firms from government medical device purchases worth more than EUR5 million in retaliation for limits Beijing places on access to its own market. The latest salvo in trade tensions between the 27-nation bloc and China covers a wide range of healthcare supplies, from surgical masks to X-ray machines, that represent a market worth EUR150 billion in the EU. "Our aim with these measures is to level the playing field for EU businesses," the bloc's trade commissioner Maros Sefcovic said. "We remain committed to dialogue with China to resolve these issues." The European Commission said in a statement the move was in "response to China's longstanding exclusion of EU-made medical devices from Chinese government contracts." Brussels said just under 90% of public procurement contracts for medical devices in China "were subject to exclusionary and discriminatory measures" against EU firms. In addition to barring Chinese firms from major state purchases, "inputs from China for successful bids" would also be limited to 50%, it said.
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BROKER RATING CHANGES
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Barclays raises Hiscox to 'overweight' (equal weight) - price target 1,400 (1,180) pence
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Deutsche Bank Research cuts Syncona price target to 170 (205) pence - 'buy'
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Berenberg cuts Kenmare Resources to 'hold' (buy) - price target 390 (580) pence
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COMPANIES - FTSE 100
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Berkeley Group released its full-year results. Pretax profit decreased on-year for the period ended April 30, to GBP528.9 million from GBP557.3 million. Revenue rose slightly to GBP2.49 billion from GBP2.46 billion. Its return on capital employed narrowed to 16.5% from 18.3%. The dividend for the year is 240 pence, up from 92p. Berkeley said it is determined to help the UK government meet its growth ambitions, and is encouraged by tone set by a brownfield-led housing agenda and the government's proclaimed target of delivering 1.5 million homes over the current parliament. It cited strong fundamentals to say it is positive about the future, and that it has a clear plan for the next decade, being reading to invest GBP5 billion over the period. Pretax profit guidance for the current year is "GBP450 million, with FY27 likely to be similar, based on current sales rates". Also, Chair Michael Dobson is to step down with CEO Rob Perrins assuming the executive chair role at the AGM on September 5.
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COMPANIES - FTSE 250
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Pollen Street announced the proposed appointment of Lynn Fordham as Chair, as well as of James Gillies as a non-executive director. Fordham will succeed Robert Sharpe, who was previously reported to be stepping down after a nine-year tenure. She is currently chair of NewRiver REIT, a non-executive director at Caledonia Investments and NCC Group, and senior independent director at Domino's Pizza Group PLC.
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OTHER COMPANIES
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Downing Renewables & Infrastructure Trust is to be acquired by Bagnall Energy Ltd in a cash takeover. Bagnall said that each DORE shareholder will be entitled to 102.6016 pence in cash, a premium of approximately 24% to DORE's closing price of 83.00p on Thursday. "As DORE's largest shareholder since DORE's IPO, the Bagnall Board is pleased by the progress made by DORE so far under the management of the Investment Manager," Bagnall said. "However, the adverse macroeconomic backdrop affecting DORE and many other alternative funds in the UK investment trust sector has resulted in DORE's shares consistently trading at a discount to DORE's NAV per share since the end of September 2022...DORE will achieve greater success as a private vehicle. The privatisation of DORE will also deliver immediate value crystallisation to DORE's existing shareholders. Bagnall is well placed to support DORE's existing portfolio as both companies have been managed by the Investment Manager since inception."
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By Emma Curzon, Alliance News reporter
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