1st Dec 2025 06:55
(Alliance News) - Stocks in London are set to open lower on Monday, starting the week under pressure amid renewed political scrutiny of Chancellor Rachel Reeves in Westminster and a mixed start to trading in Asian markets.
IG says futures indicate the FTSE 100 to open 10.9 lower, or 0.1% at 9,731.40 on Monday. The index of London large-caps closed 0.3% higher at 9,720.51 on Friday.
Sterling was quoted at USD1.3215 early Monday, down from USD1.3236 at the London equities close on Friday. The euro traded at USD1.1595 early Monday, little changed from USD1.1593 late Friday. Against the yen, the dollar was quoted at JPY155.56, lower versus JPY156.19.
The UK Financial Conduct Authority faced calls over the weekend to investigate whether Chancellor Rachel Reeves misled the public by claiming she faced a GBP20 billion financing gap ahead of the government's autumn budget.
Opposition leaders urged the regulator to examine whether Reeves's early November speech amounted to "market manipulation".
The controversy follows Friday's admission by the Office for Budget Responsibility that it had informed the chancellor as early as September 17 that the public spending gap was likely smaller than previously feared.
Prime Minister Keir Starmer is expected to deliver a speech backing Reeves on Monday, in which he will also confirm planning reforms to accelerate nuclear fuel projects in the UK.
In the US on Friday, Wall Street finished higher. The Dow Jones Industrial Average rose 0.6%, the S&P 500 gained 0.5%, and the Nasdaq Composite added 0.7%.
"Trade was turgid on Friday, amid thin conditions owing not just to Thanksgiving, but also the [Chicago Mercantile Exchange] halting operations for much of the day. This week, focus falls on PMIs & eurozone inflation figures," said Michael Brown, Senior Research Strategist at Pepperstone.
Meanwhile, US President Donald Trump told reporters he has decided who to nominate as the next Federal Reserve chair, Bloomberg reported Sunday. "I know who I am going to pick," Trump said aboard Air Force One, adding that the nominee would be announced shortly.
Bloomberg reported that Trump expects his pick to pursue rate cuts and that National Economic Council Director Kevin Hassett is a likely choice to replace Jerome Powell when his term expires in May.
Separately, Trump confirmed he had recently spoken with Venezuelan leader Nicolas Maduro amid rising tensions. Caracas has accused the US of preparing military action, after Trump said Venezuelan airspace should be considered "closed in its entirety."
In Asia on Monday, the Shanghai Composite was up 0.5% in China, while the Hang Seng index in Hong Kong was up 0.7%.
Chinese factories posted softer activity for the eighth consecutive month in November. The official manufacturing purchasing managers' index came in at 49.2 points, up from 49.0 in October but still in contraction territory and below the Bloomberg-cited consensus of 49.4.
The non-manufacturing PMI fell to 49.5 points, marking the first contraction in almost three years.
S&P Global separately reported that China's RatingDog China general manufacturing PMI slipped to 49.9 points in November from 50.6 in October, missing the FXStreet consensus of 50.5 points.
The Nikkei 225 index in Tokyo was down 1.9%.
Japan's manufacturing activity continued to contract, though the outlook improved. The S&P Global Japan manufacturing PMI rose to 48.7 points from 48.2, but remained below the flash reading of 48.8 poins.
Ipek Ozkardeskaya, senior analyst at Swissquote said: "Risk appetite – judging from the price action in the Nikkei and Bitcoin – doesn't look great. And one man is largely responsible for that: Kazuo Ueda, the head of the Bank of Japan (BoJ), who said today that the bank "will consider the pros and cons of raising the policy interest rate and make decisions as appropriate" and that "any hike would merely be an adjustment in the degree of easing."
"In other words, they remain far behind the curve, and normalization is calling – even more loudly as Takaichi's policy measures risk pushing Japan's inflation even higher," Ozkardeskaya concluded
The S&P/ASX 200 in Sydney closed down 0.6%.
Australia's manufacturing sector recovered in November as new orders and staffing increased. The S&P Global Australia manufacturing PMI rose to 51.6 points from 49.7 in October.
Gold was quoted at USD4,232.30 an ounce early Monday, up from USD4,208.13 on Friday.
Brent oil was trading at USD63.56 a barrel early Monday, up from USD63.19 late Friday.
In Monday's corporate calendar, half-year results are due from Eco Animal Health Group, One Health Group, Peel Hunt, and Solid State. Tharisa posts full-year results.
In the economic calendar on Monday, a slew of manufacturing PMIs are due from Spain, France, Germany, the wider eurozone, Switzerland, the UK, Canada and the US.
By Eva Castanedo, Alliance News reporter
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