27th Dec 2024 07:59
(Alliance News) - The FTSE 100 index in London was called slightly lower on Friday, as investors digest holiday-season sales results in the US and UK.
In the US, MasterCard reported that retail sales increased this holiday season, with online purchases seeing the most growth.
From November 1 to December 24, Mastercard SpendingPulse data showed US retail sales excluding automotive increased 3.8% from the year prior. The Purchase, New York-based payment card services company said SpendingPulse figures represent all payment types and are not adjusted for inflation.
Michelle Meyer, Mastercard Economics Institute chief economist, commented: "The holiday shopping season revealed a consumer who is willing and able to spend but driven by a search for value as can be seen by concentrated e-commerce spending during the biggest promotional periods. Solid spending during this holiday season underscores the strength we observed from the consumer all year, supported by the healthy labor market and household wealth gains."
In the UK, Boxing Day shopper footfall was down 7.6% from last year across all UK retail destinations, although this year's data was up against an unusual spike in footfall as 2023 was the first "proper Christmas" period without Covid-19 restrictions.
Also in the US, unemployment data on Thursday subverted expectations.
Pepperstone's Quasar Elizundia commented: "Recent initial jobless claims data, which came in lower than expected, showing a decrease of 1,000 claims versus the forecasted increase of 4,000, strengthen the narrative of a resilient labour market. This strength, however, becomes a double-edged sword. While a strong labour market is a positive indicator of economic health, it also gives the Fed room to maintain interest rates at restrictive levels for a longer period.
"The dynamic between a strong labour market and persistent inflation becomes a key focus for investors. The market's initial reaction to labour data, although bearish, has been tempered, suggesting investors are still assessing the long-term impact of these dynamics."
In UK corporate news, Centrica started the extension of its share buyback. Gelion reported a widened pretax loss although its adjusted Ebitda loss narrowed and it saved over GBP1 million in operating expenses.
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 3.3 points at 8,133.69
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Hang Seng: up 0.3% at 20,148.61
Nikkei 225: up 1.9% at 40,300.37
S&P/ASX 200: up 0.5% at 8,261.80
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DJIA: closed up 28.77 points, 0.1%, at 43,325.80
S&P 500: closed down 2.45 points, marginally lower, at 6,037.59
Nasdaq Composite: closed down 10.77 points, 0.1%, at 20,020.36
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EUR: slightly up at USD1.0407 (USD1.0403)
GBP: down at USD1.2524 (USD1.2555)
USD: up at JPY157.79 (JPY157.10)
Gold: up at USD2,635.66 per ounce (USD2,614.31)
(Brent): up at USD73.26 a barrel (USD73.03)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
09:00 CET Spain retail sales
08:30 EST US trade balance
08:30 EST US wholesale inventories
09:00 EST US S&P/Case-Shiller home price index
10:30 EST US EIA natural gas stocks
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Boxing Day shopper footfall was down 7.6% from last year across all UK retail destinations up until 8pm, MRI Software's OnLocation Footfall Index found. However, this year's data had been compared with an unusual spike in footfall as 2023 was the first "proper Christmas" period without Covid-19 pandemic restrictions, an analyst at the retail technology company said. Before the pandemic the number of Boxing Day shoppers on the streets had been declining year on year. The last uplift recorded by MRI was in 2015. Jenni Matthews, marketing and insights director at MRI Software, told the PA news agency: "Figures have come out that things have stabilised, we're almost back to what we saw pre-pandemic." There were year-on-year declines in footfall anywhere between 5% and 12% before Covid-19 restrictions, she said, adding: "It's the shift to online shopping, it's the convenience, you've got the family days that take place on Christmas Day and Boxing Day."
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UK shoppers were predicted to spend GBP236 each on average in the Boxing Day sales this year, with the majority of purchases made online. A total of GBP4.6 billion will be spent, a study by Barclays Consumer Spend researchers found. Nearly half of respondents said the cost-of-living crisis will affect their post-Christmas shopping but the forecast average spend is still GBP50 more per person than it was before the pandemic, with some of that figure due to inflation, Barclays said.
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Initial jobless claims in the US declined slightly in the most recent week, compared to market expectations of an increase, but the four-week average for initial claims rose a bit, as did continuing claims, figures showed on Thursday. Seasonally adjusted initial claims were 219,000 in the week that ended this past Saturday, down 1,000 from the previous week's unrevised total of 220,000, the US Department of Labor said. Market consensus cited by FXStreet expected 224,000 claims.
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Industrial production in Japan declined by 2.3% on month in November, the first month-on-month decline in three months.
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Japan's government on Friday approved a record budget for the next fiscal year, ramping up spending on social welfare, as the population ages, and defence to tackle regional threats. The JPY115.5 trillion (USD730 billion) budget for the year from April 2025, greenlighted by the Cabinet, includes JPY8.7 trillion yen in defence spending. It also includes social security spending of around JPY38.3 trillion – up from JPY37.7 trillion the previous year. The defence ministry said in a briefing document that Japan was facing its "toughest and most complex security environment" since World War II, repeating a warning from Prime Minister Shigeru Ishiba.
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Turkey's central bank lowered its key interest rate on Thursday, the first cut in nearly two years as it battles double-digit inflation. The bank's monetary policy committee decided to reduce the policy rate from 50% to 47.5%, with a statement citing improvement in "inflation expectations and pricing behaviour". The last cut was in February 2023. It has kept the main rate stable at 50% since March. Turkey's annual inflation rate slowed for the sixth month in a row in November, to 47%.
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South Korea's opposition Thursday said it filed an impeachment motion against acting president Han Duck-soo, in an escalating row over the composition of the Constitutional Court which would decide whether to remove his predecessor from office. South Korea fell in a political crisis when President Yoon Suk Yeol, currently suspended, declared martial law on December 3. Yoon faces criminal charges of insurrection over his martial law declaration, which could result in life imprisonment or even the death penalty. Yoon was ordered a third time on Thursday to appear for questioning on the morning of the 29th, days after he refused a summons to do so on Christmas day.
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Ukrainian President Volodymyr Zelensky on Wednesday denounced an "inhumane" attack from Russia, which launched over 170 missiles and drones on his war-torn country's power grid on Christmas Day, killing one and causing widespread blackouts. The country woke up at 5:30 am local time to an air raid alarm, shortly followed by air force reports that Russia had launched Kalibr cruise missiles from the Black Sea. This was the 13th large-scale strike on Ukraine's energy system this year, the latest in Russia's campaign targeting the power grid during winter.
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Japan Foreign Minister Takeshi Iwaya raised "serious concerns" on Wednesday over China's military build-up as he met counterpart Wang Yi in Beijing, Tokyo said. On his first visit to China since becoming Japan's top diplomat earlier this year, Iwaya told Wang that Tokyo was "closely monitoring the Taiwan situation and recent military developments", according to his foreign ministry. Meeting with Wang at Beijing's opulent Diaoyutai State Guesthouse, he also "expressed serious concerns over the East China Sea situation, including around the Senkaku Islands [and] China's increasing military activity", Tokyo said.
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Two days after the announcement of the election result in Mozambique, the situation in the south-eastern African country is escalating. At least 121 people have died in protests since Monday, the civil society organization Plataforma Decide said late on Wednesday. Earlier in the day, the organization had reported 56 dead and 380 injured. The capital Maputo, as well as the cities of Beira and Nampula, are particularly affected, it said. Mozambique's interior minister had spoken of 21 dead and 25 injured on Tuesday evening. The unrest began after the Constitutional Council confirmed on Monday that Daniel Chapo, the candidate of the Mozambique Liberation Front party, which has been in power for 49 years, won the presidency with 65% of the vote. Opposition leader Venancio Mondlane, who reportedly received 24% of the votes, rejected the result as manipulated and announced from abroad that he would declare himself president on January 15.
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BROKER RATING CHANGES
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Davy cuts Vistry to 'neutral' ('outperform') - target 773 pence
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COMPANIES - FTSE 100
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Centrica announces the start on Friday of the GBP300 million extension to its share repurchase programme that it had announced earlier this month. The buyback will be completed by the end of September 2025. The buyback will be run by Goldman Sachs and Merrill Lynch.
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COMPANIES - FTSE 250
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Syncona investee Achilles Therapeutics has announced the sale of technology assets to AstraZeneca, which has agreed to pay USD12 million in total for them. Syncona says the completion of the transaction signals the conclusion of the strategic review which was announced in September. AstraZeneca now holds the commercial license of data and samples from the TRACERx non-small cell lung cancer study. It also will take over as the sponsor of Achilles' Material Acquisition Platform, and will receive the tumour samples and data collected so far. Syncona says Achilles now plans to undertake additional measures, including a further reduction in employee headcount and a decrease in the size of its board. As of September 30, Syncona's holding value in Achilles was GBP8.5 million.
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OTHER COMPANIES
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Gelion reported a pretax loss of GBP8.0 million for the financial year that ended June 30, widened from GBP7.4 million the year before. Total income decreased to GBP2.0 million from GBP2.1 million, which the energy storage company said was in research & development tax incentives and grant income, and was aligned with market expectations. Adjusted loss before interest, tax, depreciation and amortisation was reduced to GBP4.8 million, narrower than market expectations. Gelion also said cost management initiatives have achieved around GBP1.1 million in savings despite increased operating expenses from its acquisition in financial 2024 of OXLiD Ltd.
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Gemfields expects operations at Montepuez Ruby Mining to return to normal before end of this year. The London-headquartered gemstones miner and marketer halted operations at Montepuez Ruby Mining on Tuesday, after groups associated with illegal ruby mining took advantage of the political unrest in Mozambique and set fire to community buildings built by the mine on Monday. These incidents happened in and around Namanhumbir, a village immediately adjacent to Montepuez Ruby Mining's principal residential infrastructure. Gemfields owns 75% of Montepuez Ruby Mining. On Friday, Gemfields said a phased return of a number of people, who were temporarily relocated to offsite locations this week, begun on Thursday.
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By Emma Curzon, Alliance News reporter
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