18th Nov 2024 16:56
(Alliance News) - London's FTSE 100 outperformed European peers on Monday as gains in commodity stocks offset weaker housebuilders and property issues.
The FTSE 100 index rose 45.71 points, 0.6%, at 8,109.32. The FTSE 250 declined 81.23 points, 0.4%, at 20,395.41, and the AIM All-Share climbed 0.41 of a point, 0.1%, at 727.55.
The Cboe UK 100 ended up 0.5% at 814.60, the Cboe UK 250 fell 0.5% to 17,893.01, and the Cboe Small Companies shed 0.3% at 15,812.51.
In European equities on Monday, the CAC 40 in Paris ended up 0.1%, while the DAX 40 in Frankfurt declined 0.1%.
In New York, the Dow Jones Industrial Average was up 0.1% at the time of the closing bell in London. The S&P 500 was 0.6% higher and the Nasdaq Composite climbed 1.0%.
Third quarter earnings from Nvidia after the closing bell on Wednesday will likely be the main market moving event of the week.
Bank of America said: "While election implications, rates volatility, and the Fed dominate conversations, options tell us Nvidia earnings are still a very big deal for the market."
"It remains the most dominant stock in the market, driving 20% of S&P 500 return over the past year, and is expected drive nearly 25% of the S&P 500's EPS growth in the third quarter. With the market taking a breather last week following the election rally, we believe Nvidia earnings can dictate the near-term direction of the market. Walmart earnings should also be a key focus to gauge the consumer strength heading into the holiday season," BofA remarked.
The pound was quoted at USD1.2649 late on Monday afternoon in London, up when compared to USD1.2639 at the equities close on Friday.
The euro rose to USD1.0572, against USD1.0538. Against the yen, the dollar was trading higher at JPY155.01 compared to JPY154.72.
"It's impossible to say that the 'Trump trade' is now fully priced-in, but we must be getting close. We still can't see much reason to take the other side of the trade before the end of the year, however, and a repeat of the 2016 overshoot (and some kind of correction thereafter) still feels about as good a guess of how this plays out as any other," said Kit Juckes at Societe Generale.
ING thinks market positioning is "quite stretched on dollar longs", and feels the greenback remains at "risk of some technical correction in the near term".
Supporting London's FTSE 100, gains in oil, gold and other commodity prices.
Gold was quoted higher at USD2,610.04 an ounce against USD2,569.63 on Friday.
Goldman Sachs reiterated its bullish stance on the yellow metal.
"US policy uncertainty and recent consolidation provide an attractive entry point for our high-conviction long gold view, with structural support from central bank gold demand and cyclical support from Fed cuts. We keep our USD3,000 December 2025 forecast."
Gold miners benefited from the rising price. Endeavour Mining rose 3.5%, Fresnillo climbed 1.9%, Hochschild Mining advanced 4.1% and Centamin firmed 3.6%.
Brent oil was quoted higher at USD73.08 a barrel late on Monday afternoon, up from USD72.08 at the time of the London equities close on Friday.
BP and Shell rose 1.5% and 1.3% respectively.
Elsewhere, Melrose was the biggest winner in the FTSE 100, jumping 7.6% after an encouraging trading statement.
Melrose said full-year expectations are unchanged with adjusted operating profit forecast of GBP550 million to GBP570 million in the year to December 2024.
In addition, Melrose expects its cash flow position to improve significantly next year and to deliver substantial free cash flow in 2025.
Revenue was up 7% in the four months to October 31 from a year prior, with Engines, up 17%, showing strong progress driven by aftermarket revenues, and Structures growing at 1%, impacted by original equipment volume reductions and customer destocking.
Sam Burgess at Citi said overall this was a "positive" update with growth in Structures despite the challenging operating environment, strong growth in Engines, full-year guidance confirmed, and positive messaging on free cash flow.
"Strong mid-term FCF is core to our investment thesis and the messaging this morning is encouraging," he added.
But housebuilders and property stocks fell back after Rightmove reported a drop in house prices in November.
The average price tag on a newly marketed home fell by more than GBP5,000 in November, according to a property website.
The usual drop seen at this time of year is 0.8% and November is the second month in a row that price growth has been weaker than usual, Rightmove said.
The survey comes as the housing markets faces the prospect of higher interest rates for longer, while the budget sparked some uncertainty as well.
Vistry fell 5.6%, Land Securities slipped 2.9%, Taylor Wimpey dipped 1.9% and Barratt Redow eased 0.7%.
But Anthony Codling at RBC Capital Markets feels it isn't all "doom and gloom".
"Asking prices typically fall in November as the Autumn selling season winds down and such moves aid affordability, and the number of home sales agreed is up 26% year-on-year. Mortgage rates have ticked up following the budget, but the next move in bank rate is still expected to be down not up, the market expects a 25bp cut in February 2025, and the housing market typically starts a new year with a spring in its step," he commented.
On AIM, Celadon Pharmaceuticals plunged 36%.
The London-based pharmaceutical company reported said talks aimed at securing longer-term financing had not progressed materially in recent months.
The firm, which said it has adequate working capital to last through to January, also flagged uncertainty as to the receipt of an outstanding amount due.
Tuesday's economic calendar sees eurozone and Canadian inflation readings.
The local corporate calendar has full-year results from tobacco and vapes retailer Imperial Brands and specialised technical products supplier, Diploma.
By Jeremy Cutler, Alliance News reporter
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