22nd Jan 2025 16:53
(Alliance News) - The pound was resilient as nerves over Trump tariffs calmed, putting pressure on a FTSE 100 stacked with international earners and ensuring London's large-cap benchmark was unable to replicate the strong gains seen in European counterparts on Wednesday.
The FTSE 100 index fell just 3.16 points at 8,545.13. The FTSE 250 lost 15.43 points, 0.1%, at 20,580.30, and the AIM All-Share ended up 1.89 points, 0.3%, at 721.00.
The Cboe UK 100 lost 0.1% at 856.60, the Cboe UK 250 fell 0.2% at 17,962.96, and the Cboe Small Companies ended down marginally at 15,773.05.
In European equities on Wednesday, the CAC 40 in Paris ended up 0.9%, while the DAX 40 in Frankfurt shot up 1.0%.
Among those putting pressure on the FTSE 100 were brewer Diageo, consumer goods firm Unilever and lender HSBC. The trio, among the FTSE 100's largest firms and earn big chunks of the money in international currencies, fell 1.3%, 1.0% and 0.3%.
The pound remained above the USD1.23 on Wednesday, despite some unfavourable data, as markets take the threat of Donald Trump tariffs in their stride. Sterling did surrender some earlier progress but is well off deeper lows under the USD1.22 mark it sank to earlier this week.
The pound was quoted at USD1.2317 late on Wednesday afternoon in London, largely flat compared to USD1.2319 at the equities close on Tuesday. It had traded as high as USD1.2375.
The euro stood at USD1.0417, where it was a day prior, but off an earlier high of USD1.0475. Against the yen, the dollar was trading higher at JPY156.49 compared to JPY155.43.
XTB analyst Kathleen Brooks commented: "As we move into the second Trump era, it is the new US President, and not the Federal Reserve who is dominating market sentiment. His executive orders and investment plans have had the biggest impact on stock markets. So far, he has not spooked markets with tariff threats, or with concerns about the deficit.
"Although tariffs have featured heavily in his first few days in office, tariffs for Chinese imports have been milder than feared. Trump is turning his attentions to Canada and Mexico, which could face higher tariffs than China. This is bad news for Mexico and Canada, and the MXN and CAD continue to be big under performers in the FX space so far this week. However, by levying lower tariffs than feared on China, this is less of a threat to global growth, which is more important for risk sentiment and global stock markets."
UK public sector net borrowing was much higher than expected in December, figures released by the Office for National Statistics showed on Wednesday.
PSNB totalled GBP17.81 billion in December, up from GBP11.8 billion in November. The November figure was revised up from GBP11.25 billion, and the December one far outpaced FXStreet-cited market consensus of GBP13.4 billion.
The GBP17.81 billion figure was GBP10.1 billion more than in December 2023 and the highest December borrowing for four years, the ONS noted.
Rachel Reeves said she would not apologise for the budget but insisted she would like to see taxes come down.
The UK chancellor said she was "absolutely" relaxed about wealth creation and said the government wanted to attract the "highest-skilled" immigrants to the UK despite plans to crack down on the overall number of arrivals.
Reeves, who announced GBP40 billion of tax hikes in her first budget, said she would like to bring the overall burden down but she could not yet afford to do so and "I'm not going to make promises that I can't keep".
Brent oil was quoted at USD78.31 a barrel late on Wednesday in London, falling from USD79.51 late Tuesday. Gold was higher at USD2,757.82 an ounce against USD2,740.35 on Tuesday.
Back on the London Stock Exchange, easyJet fell 5.2%. The budget carrier said results for the winter will reflect "improvements" during the first-quarter ended December 31, offset by "underlying unit revenue trends being modestly lower" in the second-quarter.
easyJet said that at this stage of the year, "current booking trends are supportive" of consensus. A company compiled consensus for headline pretax profit is GBP709 million, would be growth of 16% from GBP610 million in the 12 months to September 30, 2024.
AJ Bell analyst Russ Mould was not surprised to see the shares coming under duress.
"easyJet's update lacked pizzazz. Saying that current booking trends are 'supportive' of full-year market expectations doesn't exactly instil confidence. It's woolly language which doesn't go down well with investors," the analyst said.
"Admittedly the airline is only one quarter into its financial year, but the market needs reassurance that everything is going swimmingly for the business given the fragile economic backdrop and weakening consumer confidence. The fact the share price fell on the update suggests investors are disappointed."
Hochschild Mining slumped 16%. It said all-in sustaining costs were higher last year, citing a slow ramp-up at Mara Rosa in Brazil's Goias state and higher-than-forecast inflation in Argentina.
The miner of silver and gold in Peru, Argentina and Brazil said production rose 16% to 347,374 gold equivalent ounces in 2024 from 300,749 ounces in 2023.
In the fourth quarter alone, gold equivalent production rose 15% to 117,230 ounces from 101,590 ounces a year before and 6.4% from 110,180 ounces in the third quarter.
For 2025, the company targets a production of 350,000 to 378,000 gold equivalent ounces, between 0.8% and 8.8% higher than in 2024.
However, Hochschild expects to report all-in sustaining cost for 2024 to be above guidance of between USD1,510 to USD1,550 per gold equivalent ounce, with that set to increase to between USD1,587 and USD1,687 in 2025.
Trainline lost 8.5% as Great British Railways plans came back to haunt the stock. In a statement, the Department for Transport said: "After Great British Railways is established following legislation, it will retail online by bringing together individual train operators' ticket websites."
The DfT said it will work alongside a "thriving" private sector retail market, where all rail retailers can compete in an open and fair manner. It stressed the private sector will continue to play a key role in driving growth and encouraging more people to choose rail.
Trainline Chief Executive Jody Ford welcomed the "unequivocal commitment to a competitive retail market, underpinned by a level playing field."
Nonetheless, investors were spooked and shares in the rail ticketing platform declined.
Stocks in New York were higher on Wednesday. The Dow Jones Industrial Average was up 0.1%, the S&P 500 added 0.7%, while the Nasdaq Composite shot up 1.3%.
Netflix jumped 11% after the streaming service's earnings impressed overnight.
Swissquote analyst Ipek Ozkardeskaya commented: "Netflix blew past the market expectations last quarter and closed the year on a very high note. The company added 18.9 million new subscribers last quarter – its biggest ever quarterly jump in subscriptions. The company added more than 41 mio subscribers over the year and has now more than 300 mio subscribers around the world. And it’s not even due to a pandemic or a temporary situation (like the Squid Game peak). It’s because their strategic bet of streaming major live sport events is paying off and hints at a further upside potential."
Thursday's economic calendar has the latest US initial jobless claims reading at 1330 GMT.
The local corporate calendar has a trading statement from Primark owner AB Foods.
By Eric Cunha, Alliance News news editor
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