21st Mar 2025 16:57
(Alliance News) - Stocks in London ended a mixed week in the red amid fresh falls on Wall Street as a flurry of weak earnings added to fears as to the strength of the US economy.
The FTSE 100 index closed down 55.20 points, 0.6%, at 8,646.79. The FTSE 250 fell 186.48 points, 0.9%, at 19,911.50, and the AIM All-Share slipped 6.72 points, 1.0%, at 689.12.
For the week, the FTSE 100 rose 0.3%, the FTSE 250 fell 0.4% and the AIM All Share rose 0.4%.
The Cboe UK 100 ended down 0.6% at 865.04, the Cboe UK 250 eased 0.7% at 17,414.39, but the Cboe Small Companies ended up 0.1% at 15,687.06.
Michael Brown at Pepperstone noted: "The data docket becomes rather quiet over the next week or so, meaning growth worries are unlikely to be put to bed any time soon. Consequently, this risk-averse meandering seems like it will continue for some time to come."
In European equities on Friday, the CAC 40 in Paris ended down 0.6%, while the DAX 40 in Frankfurt closed 0.5% lower.
Stocks in New York were lower at the London equities close, with the DJIA down 0.2%, the S&P 500 index 0.3% lower, and the Nasdaq Composite down 0.1%.
Extra volatility in the US is expected ahead of 'quadruple witching' when an estimated USD4.5 trillion of US index futures and options, plus single stock options, all expire.
The event occurs on the third Friday of March, June, September, and December, with heightened activity in the final trading hour.
FedEx, viewed as an economic bellwether for the US, slid 8.2% after the company lowered its earnings forecasts, blaming "continued weakness and uncertainty in the US industrial economy" and a "very challenging operating environment".
Nike tumbled 5.4% after warning of a further sales decline in the financial fourth quarter alongside a hefty fall in margins.
The pound was quoted lower at USD1.2914 at the London equities close Friday, compared to USD1.2964 at the close on Thursday. The euro stood at USD1.0819 down against USD1.0847. Against the yen, the dollar was trading higher at JPY149.05 compared to JPY148.78 late Thursday.
Higher than expected UK borrowing figures added to the subdued mood, piling pressure on Chancellor Rachel Reeves ahead of next week's spring statement.
According to the Office for National Statistics, public sector borrowing amounted to GBP10.71 billion last month, slightly higher than GBP10.58 billion a year prior, and well above the GBP6.5 billion forecast from the Office for Budget Responsibility, the government's fiscal watchdog.
Numbers in January had showed a surplus of GBP13.32 billion, due to tax receipts usually being higher that month. That January number was downwardly revised from GBP15.44 billion.
Reeves will deliver her spring statement on Wednesday lunchtime in the House of Commons.
Kallum Pickering at Peel Hunt explained the chancellor is "in a bind."
"Reeves made the mistake at her first budget last October of leaving herself only a small amount of headroom against her fiscal targets," he said.
"Now she faces the risk that the OBR's updated forecasts will show that she is on course to miss them. If so, she will need to decide whether to ignore her rules for now and delay any necessary policy changes until the next full-scale fiscal event in autumn, or make adjustments to policy now to get back on track. The latter is more likely, in our view."
More encouragingly, there was a marginal improvement in UK consumer confidence in March, amid a "fragile" outlook for the year ahead.
GfK's long-running consumer confidence index increased by one point to minus 19, with expectations for the general economic situation over the next 12 months improving by two points to minus 29 – six points lower than a year ago.
Expectations for personal finances over the next 12 months fell by one point to positive 1, while the major purchase index, a measure of confidence in buying big ticket items, remained unchanged at minus 17, 10 points better than last March.
Neil Bellamy, consumer insights director at NIQ GfK, said: "Consumer confidence remains subdued with a headline score of minus 19 for March.
"If consumer confidence were a patient languishing in a hospital bed, a doctor would say there is little evidence of a recovery as yet. Where do we go from here?
"The current stability is to be welcomed but it won't take much to upset the fragile consumer mood."
On the FTSE 100, JD Sports Fashion, which has a retail partnership with Nike, fell 5.1%.
British Airways owner IAG closed down 1.9% as Heathrow Airport warned of "significant" disruption for days after its power was cut by a fire at a nearby electricity substation.
More than 1,300 flights to and from the UK's main airport, one of the world’s busiest international hubs, have been cancelled after the fire caused a "significant power outage".
"Whilst fire crews are responding to the incident, we do not have clarity on when power may be reliably restored," Heathrow said on Friday afternoon.
The cause of the blaze is unknown. UK government officials said counterterror police were leading investigations, although energy secretary Ed Miliband said on Friday morning there was "no suggestion" of foul play.
Asos was the star performer on the FTSE 250, soaring 21% after it said adjusted earnings before interest, tax, depreciation and amortisation would be ahead of the GBP34 million consensus.
The London-based online-only fashion retailer said it expects to see a significant improvement in profitability in the first half of financial 2025, despite falling volumes.
This reflects strong gross margin driven by lower markdown activity and increased full-price mix, and continued cost discipline, Asos said.
UBS said: "We see the improvement in profitability as a positive. Asos is executing well on full price sales development. We await further details at the results on the outlook. We think sales growth is likely to be the key focus."
Brent oil was quoted higher at USD72.01 a barrel at the London equities close Friday from USD71.89 late Thursday.
Gold fell to USD3,013.40 an ounce on Friday against USD3,035.20 on Thursday.
Monday's UK corporate calendar has full-year results from advertising company S4 Capital. Later in the week, housebuilder Bellway and retailers Kingfisher and Next report results.
The economic calendar for Monday has a slew of flash composite PMI readings around the globe.
By Jeremy Cutler, Alliance News reporter
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