30th Jan 2025 16:55
(Alliance News) - The FTSE 100 hit a new all-time high on Thursday, buoyed by strong miners, as weak growth data in Europe and the US boosted hopes for rate cuts.
Axel Rudolph at IG observed: "The slowest US growth in three quarters has revived hopes that the Fed may move away from its hawkish hold. Eurozone GDP stalling and the German economy - in a mild recession since 2023 - shrinking more than expected in [the fourth quarter] have also increased the odds for further European Central Bank rate cuts."
The FTSE 100 index ended up 89.07 points, 1.0%, at 8,646.88. It had earlier set a new intra-day high of 8,655.19.
The FTSE 250 ended up 245.37 points, 1.2%, at 20,802.07, and the AIM All-Share climbed 6.04 points, 0.9%, at 718.23.
The Cboe UK 100 ended up 1.1% at 866.99 on Thursday, the Cboe UK 250 advanced 1.2% at 18,193.88, but the Cboe Small Companies fell 0.5% to 15,935.40.
In European equities on Thursday, the CAC 40 in Paris ended up 0.9%, while the DAX 40 in Frankfurt advanced 0.4%, also setting a record intra-day high.
The European Central Bank lowered interest rates by 25 basis points following data that showed the eurozone economy ground to a halt in the three months to December.
The quarter-point cut, which was as expected, took the interest rates on the deposit facility, the main refinancing operations and the marginal lending facility to 2.75%, 2.90% and 3.15% respectively.
ECB President Christine Lagarde said a chunkier half-point rate cut was not considered by policymakers, but she suggested it would be too soon to discuss whether to put the brakes on its monetary policy easing.
Lagarde said it would be "premature at this point" to talk about "where we have to stop".
Earlier, figures from Eurostat showed gross domestic product in the eurozone did not change in the final quarter of 2024 after 0.4% growth reported in the third quarter. The figure was below FXStreet-cited consensus, which had pencilled in a marginal increase of 0.1%.
Jack Allen-Reynolds at Capital Economics thinks that weak growth and inflation will mean that the ECB has to lower interest rates further than most investors expect, with the deposit rate falling to 1.5% this year.
In New York, stocks were mixed at the time of the London close. The Dow Jones Industrial Average was up 0.2%, the S&P 500 was 0.1% higher, while the Nasdaq Composite was down 0.2%.
Shares in electric carmaker Tesla were up 2.2%, Facebook owner Meta Platforms was up 1.6%, but software firm Microsoft was 6.3% lower. The trio reported earnings after the closing bell in New York on Wednesday.
The world's most valuable company Apple, down 0.4%, reports after the close on Thursday.
Economic growth in the US slowed by more than expected in the final quarter of 2024, an advance estimate published by the Bureau of Economic Analysis showed.
Real gross domestic product grew quarter-on-quarter on an annualised basis by 2.3% in the final three months of 2024. Growth eased from a 3.1% surge in the third quarter, and underperformed against the FXStreet-cited market consensus, which had anticipated a milder slowdown in annualised growth to 2.6%.
However, ING explained the weaker looking data was more robust than it appeared.
"US GDP expanded "only" 2.3% in the fourth quarter, but this masks consumer strength via a big rundown in inventories and the Boeing strike action that depressed aircraft-related investment," the broker pointed out.
"These factors will unwind this quarter, but the downside risk is surging imports as US companies seek to avoid potential tariffs that could kick in from this weekend," it added.
Following the data, the pound was quoted at USD1.2461 late Thursday afternoon in London, up from USD1.2435 at the equities close on Wednesday.
The euro stood higher at USD1.0423, against USD1.0419. Against the yen, the dollar was trading lower at JPY154.37 compared to JPY155.08.
The GDP data followed a Federal Reserve rate hold on Wednesday.
Chair of the US central bank Jerome Powell said things are in a "really good place for monetary policy and the US economy", stressing there is no rush to make adjustments to policy.
The policy-making Federal Open Market Committee, as expected, left the federal funds rate range unchanged at 4.25%-4.50% in a unanimous decision.
On London's FTSE 100 a surging gold price saw Endeavour Mining and Fresnillo shine, both up 6.0%.
Gold traded close to a new all time high, standing at USD2,793.57 an ounce at the time of the London close on Thursday against USD2,752.18 on Wednesday.
Endeavour Mining also announced its 2024 dividend per share at 98 US cents, up 21% from 81 cents in 2023. This resulted from a "record" second-half dividend per share of 57 US cents, up 39% from 41 US cents a year prior.
For 2025, Endeavour's production guide is between 1.10 million and 1.26 million ounces of gold. This reflects up to 15% growth on 2024's 1.10 million ounces.
St James's Place jumped 9.5% after reporting its funds under management grew more than 10% during 2024, after a "strong" final quarter.
The Cirencester, Gloucestershire-based wealth management firm said funds under management at the close of 2024 were GBP190.21 billion, up 12% from GBP168.20 billion the year before.
SJP's gross inflows improved 18% during the year to GBP18.41 billion from GBP15.39 billion, while net inflows were down 17% to GBP4.33 billion from GBP5.12 billion.
Also on the rise, Airtel Africa, a telecommunications and mobile money services provider in 14 countries in Africa.
Shares climbed 9.0% after the firm said pretax profit ballooned to USD316 million in the third quarter ending December from USD43 million a year prior. Sales growth accelerated in the quarter from the previous months.
Shell climbed 2.7%. The oil firm maintained the USD3.5 billion pace of share buybacks despite weaker-than-expected fourth quarter earnings, which reflected write-offs in its oil exploration business and lower oil prices.
Chief Executive Wael Sawan said despite some softness in fourth quarter earnings the oil major delivered the second-highest cash flow from operations in its history.
Chief Financial Officer Sinead Gorman noted it was the 13th consecutive quarter of USD3 billion plus share buybacks.
Brent oil traded at USD77.18 a barrel at the time of the equities close in London on Thursday, down slightly from USD77.21 on Wednesday.
Friday's global economic calendar sees US personal consumption expenditures price index and employment cost index data at 1330 GMT.
By Jeremy Cutler, Alliance News reporter
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