8th Dec 2025 17:02
(Alliance News) - The FTSE 100 on Monday started the week on the back foot, weighed by falls in Marmite owner Unilever, while in the US the battle for control of Warner Bros Discovery took another turn.
The FTSE 100 index closed down 21.92 points, 0.2%, at 9,645.09. The FTSE 250 ended 142.67 points lower, 0.7%, at 21,921.28, and the AIM All-Share ended down 2.78 points, 0.4%, at 748.52.
The Cboe UK 100 closed down 0.2% at 967.04, the Cboe UK 250 ended 0.6% lower at 19,023.34, and the Cboe Small Companies was down 0.9% at 17,526.76.
In London, trading was muted ahead of Wednesday's US interest rate decision.
The US central bank is widely expected to deliver a third consecutive 25 basis points interest rate cut taking the Federal Reserve's target range for the federal funds rate to 3.5%-3.75% at what could be a contentious meeting.
Goldman Sachs says the case for a cut is "solid."
"Job growth remains too low to keep up with labour supply growth, the unemployment rate has risen for three months in a row to 4.4%, other measures of labour market tightness have weakened more on average, and some alternative data measures of layoffs have begun to rise recently, presenting a new and potentially more serious downside risk," the investment bank said.
Barclays expects a 'hawkish' cut.
"At the press conference, we expect [Fed] Chair Powell to reinforce the message that a pause is likely at the January meeting, provided the labour market does not suddenly deteriorate, and to mention that the [Federal Open Market Committee] remains very divided about the future course of policy," the bank said.
The pound was quoted lower at USD1.3319 at the time of the London equities close on Monday, compared to USD1.3326 on Friday.
The euro stood at USD1.1624, down against USD1.1635. Against the yen, the dollar was trading higher at JPY155.88 compared to JPY155.42.
In European equities on Monday, the CAC 40 in Paris closed down 0.2%, while the DAX 40 in Frankfurt ended up 0.1%.
Stocks in New York were lower at the time of the London equity close.
The Dow Jones Industrial Average and the S&P 500 index were down 0.3%, while the Nasdaq Composite was 0.2% lower.
In New York, Paramount Skydance launched an all-cash offer to acquire Warner Bros Discovery for USD30 per share, trumping a previous bid from streamer Netflix.
The hostile offer sets up a battle between Paramount – whose owner Larry Ellison is an ally of President Donald Trump – and streaming behemoth Netflix to buy one of Hollywood's most storied studios.
Netflix shocked the industry last week by announcing it had sealed an agreement to buy the Warner Bros studio, drawing bitter reactions from voices in Hollywood worried about the future of their industry.
Trump weighed in on Sunday, saying Netflix's effort to acquire Warner Bros "could be a problem" as it would be left with a huge market share of the film and TV industry.
"We're really here to finish what we started," David Ellison, chair and chief executive of Paramount, told CNBC as his company made a sixth offer for Warner Bros since the bidding war began.
Netflix fell 4.5%, Warner Bros rose 5.0% and Paramount Skydance surged 7.3%.
The yield on the US 10-year Treasury was quoted at 4.19%, widened from 4.14%. The yield on the US 30-year Treasury was at 4.83%, stretched from 4.80%.
On the FTSE 100, Unilever fell 6.6% as Magnum Ice Cream started trading in Amsterdam, London and New York.
Shares in the Ben & Jerry's and Magnum owner, which has been split from Unilever, rose 1.3% in Amsterdam compared to the EUR12.80 reference price implying a market value of around EUR7.94 billion, below some market forecasts.
Diana Radu, Morningstar equity analyst said initial valuations are "lower than earlier estimates", while she noted technical factors could also weigh on Magnum shares in the short-term.
"Magnum is headquarted in the Netherlands and has its primary listing on Euronext Amsterdam, so unlike Unilever, it does not qualify for inclusion in the FTSE UK index series. As a result, UK index-tracking funds that receive Magnum shares in the spin-off but benchmark against FTSE UK indices are required to sell, which creates some short-term downward pressure on the share price after listing," Radu pointed out.
"Still, we remain optimistic on the longer-term outlook. As a standalone company, the ice-cream business gains a refreshed management team and a more focused, category-specific strategy," she added.
Housebuilders were also another weak feature as UK bond yields pushed higher, with Barratt Redrow down 4.0% and Persimmon down 3.5%.
Nonetheless Ami Galla, equity analyst at Citi, believes a spring bounce is likely to drive a sector re-rating.
"We continue to have a positive sector view into 2026 for volume housebuilders which should benefit from a favourable rate outlook as well as a gradual improvement to the planning backdrop," Galla said in a research note.
Heading upwards, defence stocks rallied on continued geopolitical uncertainty.
Defence contractor Babcock International led the blue-chip risers, up 2.6, with BAE Systems, up 1.1%.
Aerospace manufacturer Rolls-Royce was in demand, up 2.1%, after receiving an order from defence company KNDS for over 300 engines for Leopard 2 battle tanks.
On the FTSE 250, Kainos surged 6.6% as Bank of America double-upgraded to 'buy' from 'underperform', while Baltic Classifieds, up 5.9%, recouped some of last week's heavy falls which followed a downbeat trading update.
Brent oil was quoted at USD62.79 a barrel at the time of the London equities close on Monday, down from USD63.60 late Friday.
Gold was quoted at USD4,192.10 an ounce on Monday, lower against USD4,208.77.
The biggest risers on the FTSE 100 were Babcock International, up 30.00 pence at 1,176.00p, Scottish Mortgage Investment Trust, up 25.00p at 1,094.50p, Polar Capital Technology Trust, up 10.50p at 475.00p, Rolls Royce, up 22.50p at 1,107.00p and Prudential, up 19.50p at 1,097.50p.
The biggest fallers on the FTSE 100 were Unilever, down 296.00p at 4,160.00p, Barratt Redrow, down 15.00p at 363.20p, JD Sports Fashion, down 3.12p at 79.60p, Persimmon, down 46.50p at 1,298.50p and Entain, down 24.00p at 735.20p.
Tuesday's economic calendar has an interest rate decision in Australia overnight and BRC retail sales data in the UK. The two-day FOMC meeting starts in the US.
Tuesday's UK corporate calendar has half-year results from equipment hire firm Ashtead Group and greetings card and gift retailer Moonpig.
By Jeremy Cutler, Alliance News reporter
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