24th Mar 2025 16:55
(Alliance News) - London's FTSE 100 closed down slightly on Monday, after a bright start, as investors weighed mixed PMI data and looming tariffs.
The FTSE 100 index closed down 8.78 points, 0.1%, at 8,638.01. The FTSE 250 rose 10.93 points, 0.1%, at 19,922.43, and the AIM All-Share closed unchanged at 689.12.
The Cboe UK 100 ended down 0.1% at 864.63, the Cboe UK 250 eased 0.1% at 17,399.80, while the Cboe Small Companies ended down 0.5% at 15,605.33.
Miners provided support to the FTSE 100 helped by gains in the copper price and positive comments from JPMorgan.
Strategists at the broker double-upgraded the metals and mining sector 'overweight' from 'underweight', noting the sector is down 7% relative year-to-date.
Equity analysts at JPM are also positive on the sector predicting a v-shaped recovery in metals prices in 2025.
"We specifically recommend adding exposure to miners with exposure to copper, aluminium, gold, and/or corporates that are strategically vulnerable," JPMorgan said.
Its key UK 'overweights' are Rio Tinto, up 1.5%, Antofagasta, up 2.7% and Fresnillo, up 1.1%.
Glencore and Anglo American also pushed ahead, up 1.1% and 2.2% respectively.
Elsewhere, the flash UK purchasing managers composite output index published by S&P Global rose to 52.0 in March from 50.5 in February.
The flash UK services PMI business activity index improved to a seven-month high of 53.2 in March from 51.0 in February. It overshot expectations of 51.2 cited by FXStreet for March.
But reflecting a two-speed economy, the flash manufacturing output index fell to a 17-month low of 44.6 in March from 47.3 the month before.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "An upturn in business activity in March brings some good news for the government ahead of the chancellor's spring statement, offering a respite from the recent flow of predominantly downbeat economic data.
"However, just as one swallow does not a summer make, one good PMI doesn't signal a recovery."
He added: "The signal from the flash PMI is an economy eking out a modest expansion in March, consistent with quarterly GDP growth of just 0.1%."
But confidence is still running close to January's two-year low, he added.
On Wednesday, Rachel Reeves is expected to resort to spending reductions to tackle a hole in the nation's finances caused by the soaring costs of government debt.
The chancellor will deliver her first Spring Statement at Wednesday lunchtime in the House of Commons. Her address will follow Prime Minister's Questions, shortly after 1230 GMT.
On Sunday, the chancellor told the BBC the costs of running the Civil Service would be cut by 15% by the end of the decade.
Reeves said the savings would be made from back office and administrative roles rather than front-line services.
She said the size of the Civil Service had increased "massively" during Covid and had not returned to pre-pandemic levels.
"We are, by the end of this Parliament, making a commitment that we will cut the costs of running government by 15%," she said.
Last week, the government announced cuts of GBP5 billion per annum to its welfare budget.
In European equities on Monday, the CAC 40 in Paris ended down 0.3%, while the DAX 40 in Frankfurt closed down 0.2%.
Figures from S&P Global showed business activity in the eurozone rose for a third consecutive month in March, with manufacturing output returning to growth for the first time in two years.
The Hamburg Commercial Bank flash eurozone composite purchasing managers' index rose slightly to 50.4 points in March from 50.2 in February. The reading was the highest in seven months.
Stocks in New York were higher at the London equities close, with the DJIA up 1.2%, the S&P 500 index 1.5% higher, and the Nasdaq Composite up 2.0%.
Markets drew optimism from reports that tariffs, due to be imposed by US President Donald Trump on April 2, will be more sector-specific and targeted rather than broad-based.
Russ Mould, investment director at AJ Bell said: "Trump says 2 April will be 'Liberation Day' for the US, whereby he will unveil reciprocal tariffs on countries deemed to be giving the US a bad deal on trade.
"Interestingly, markets haven't braced themselves for the worst on this news. Instead, there is chatter that Liberation Day might not be so punishing as previously thought."
A report in the US showed business activity growth improved in March, although companies are increasingly cautious about the economic outlook amid concerns over customer demand and looming tariffs.
The flash US purchasing managers' composite output index improved to 53.5 points in March from 51.6 in February.
The flash US services PMI business activity index rose to 54.3 in March from 51.0 in February, comfortably beating the FXStreet-cited consensus of 51.2.
The flash US manufacturing output index fell to 48.4 in March from 54.5 in February.
S&P Global said: "Business expectations for the year ahead fell to their second lowest since October 2022 as companies grew increasingly cautious about the economic outlook, often citing worries over customer demand and the impact of aspects of the new administration's policies."
The pound was quoted lower at USD1.2906 at the London equities close on Monday, compared to USD1.2914 at the close on Friday. The euro stood at USD1.0791 down against USD1.0819.
Against the yen, the dollar was trading higher at JPY150.56 compared to JPY149.05 late Friday.
On the FTSE 100, Bunzl rose 0.9% as Deutsche Bank upgraded to 'buy' from 'hold' but Nike's uncertain outlook continued to weigh on retail partner JD Sports Fashion, down 3.5%.
Elsewhere in London, S4 Capital rose 6.1% after it declared its first-ever cash dividend since its listing in 2018, despite reporting a wider annual loss, saying the payout shows its confidence in its cash flow.
The London-based advertising agency headed by Martin Sorrell reported a pretax loss of GBP330.9 million for 2024, widened from GBP13.9 million in 2023, as revenue tumbled 16% to GBP848.2 million from GBP1.01 billion.
S4 Capital declared a 1.0 pence per share final dividend, its first as a public company, which it called a "measure of confidence in the future".
Looking ahead, the company said it expects net revenue and operational Ebitda in 2025 at similar levels to 2024, given a "challenging" macroeconomic environment, and intends to continue focusing on costs, eyeing "further action to support" profit.
Capita climbed 2.6% as RBC Capital Markets upgraded the firm to 'outperform' from 'sector perform'.
Brent oil was quoted higher at USD72.98 a barrel at the London equities close Monday from USD72.01 late Friday.
Gold eased to USD3,011.44 an ounce on Monday against USD3,013.40 on Friday.
Tuesday's UK corporate calendar has half-year results from housebuilder Bellway and engineer Smiths Group, plus full-year results from do-it-yourself retailer Kingfisher.
The economic calendar for Tuesday has the Ifo business climate report in Germany, plus US new home sales and building permit data.
By Jeremy Cutler, Alliance News reporter
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