13th Mar 2025 12:07
(Alliance News) - European equities endured some choppy trade on Thursday, starting the day largely weaker, before perking, but succumbing to caution before the start of the afternoon.
The FTSE 100 was an outlier, but only just, staying fractionally in the green.
Lingering tariff uncertainty is continuing to weigh on sentiment, and investors are also eyeing developments between Russia and Ukraine. A top Kremlin aide said Thursday that any Ukraine peace settlement must secure Russia's "interests", and that President Vladimir Putin would probably give his opinion on a 30-day US ceasefire proposal later.
"That is what we are striving for. A peaceful settlement that takes into account the legitimate interests of our country," Kremlin aide Yuri Ushakov said. "The President will probably make more specific and substantive assessments."
The FTSE 100 index traded up just 1.38 points at 8,542.35. The FTSE 250 was down 106.82 points, 0.5%, at 19,779.69, and the AIM All-Share was down 0.66 of a point, 0.1%, at 680.26.
The Cboe UK 100 was up 0.1% at 853.57, the Cboe UK 250 was down 0.5% at 17,223.90, and the Cboe Small Companies rose 1.4% at 15,332.87.
In Paris, the CAC 40 fell 0.1%, while the DAX 40 in Frankfurt lost 0.4%.
The pound faded to USD1.2938 early Thursday afternoon, from USD1.2978 at the time of the London equities close on Wednesday. The euro slipped to USD1.0862 from USD1.0914. Against the yen, the dollar fell to JPY147.96 from JPY148.32.
In New York, the Dow Jones Industrial Average and S&P 500 are called down 0.3%, and the Nasdaq Composite down 0.5%.
"Investors remain on the edge of their seat as they weigh up the impact of tariffs and whether ceasefire talks will yield an agreement between Russia and Ukraine," AJ Bell analyst Russ Mould commented.
China on Thursday called for "dialogue" with Washington to resolve spiralling trade tensions that have seen the world's two largest economies impose a slew of tariffs on each other's imports.
"China has always advocated that China and the US should adopt a positive and cooperative attitude towards differences and controversies in economic and trade fields," commerce ministry spokeswoman He Yongqian told a weekly news conference.
"But it must be stressed that any form of communication and consultation must be based on mutual respect, equality and mutual benefit," she said.
"Threats and intimidation can only be counterproductive. It is hoped that the US and China will work together... to return to the correct track of resolving issues through dialogue and consultation."
Barclays lowered its US growth outlook but raised inflation projections, "due to higher tariffs and a surge in trade policy uncertainty".
It now pencils in US gross domestic product growth of 0.7% in the 2024, its forecast sliced from 1.5%. Its projects core consumer price inflation to reach 3.6%, its forecast raised from 3.3%.
"The softer labour market causes us to add another rate cut, despite higher inflation. We now think the Federal Open Market Committee will cut rates 25bp twice this year, in June and September," Barclays analysts added.
The next Fed decision is on Wednesday. According to the CME FedWatch Tool, there is a 97% chance it leaves rates unmoved at 4.25% to 4.50%.
In London, Halma shares rose 3.0%. It raised its full-year margin outlook, although it cautioned the strength in sterling will be a negative headwind to full-year results.
It now expects an adjusted earnings before interest and tax margin modestly above 21% for the full year to March, compared to prior guidance of around 21%.
Halma said it has made good progress in the second half of the financial year to date, in varied trading conditions across end markets amidst an evolving economic and geopolitical backdrop.
This puts the firm on track for its 22nd consecutive year of record adjusted profit, the company said.
Halma was the best performer on the FTSE 100. At the other end of the index, Fresnillo lost 2.6%. RBC cut the gold miner to 'sector perform' from 'outperform'. However, it raised Hochschild to 'outperform' from 'sector perform'. Hochschild shares rose 2.0%.
Volution jumped 13%, the best mid-cap performer. It increased its dividend after a "strong" first half which saw adjusted profit grow and sales rise.
The energy efficiency and indoor air-quality solutions firm said pretax profit declined 11% to GBP25.7 million in the six months ended January 31 from GBP29.0 million a year prior. This was mainly due to non-underlying costs associated with the Fantech acquisition and consideration remeasurement relating to ClimaRad and ERI.
On an adjusted basis, pretax profit rose 10% to GBP38.6 million from GBP35.0 million. Revenue grew 8.9% to GBP187.8 million in the half-year from GBP172.5 million a year prior.
Volution expects to beat consensus in the full-year. Volution expects full year adjusted EPS to be ahead of the 30.8p consensus reflecting the "good momentum" going into the second half, ongoing growth initiatives, a focus on efficiency and costs, and the benefits that Fantech is bringing to the group.
Also on the up, Gulf Marine Services added 7.2%. The provider of self-propelling vessels to the offshore oil and gas sector reports that two of its vessels have secured three-year contract extensions with a major national oil firm in the Middle East.
"These extensions, secured at enhanced rates, build on an existing agreement, reinforcing GMS's strong partnership with the client and its continued commitment to supporting the region's offshore energy operations. GMS secured backlog now stands at USD558 million," GMS said.
But Hornby slumped 27% as the model railway maker plots a move away from the AIM market.
"Over recent years, Hornby has committed to implementing significant structural change and driving operational transformation for the benefit of all stakeholders in Hornby, not least its loyal shareholder base. This commitment has been evidenced by the board's strategic actions including acquisitions, divestments and operational restructuring," Hornby said.
"At the same time, the board is conscious of the limited liquidity of the company's shares on AIM balanced against the regulatory burden and cost of maintaining the public quotation. Therefore, following an ongoing and in-depth evaluation, the board has concluded that it is in the best interests of the company and its shareholders to seek shareholder approval for the cancellation and re-registration."
Castelnau Group, with a 55% holding in Hornby, has backed the move and has offered Hornby shareholders the option of a share-for-share exchange facility.
"For Hornby shareholders that want to continue to own Hornby shares as a private company they can do so with no further action, but in order to support Hornby shareholders who wish to continue to invest in the business but would like to do so via a listed vehicle, Castelnau has agreed with the Hornby board to offer a share-for-share exchange facility," Castelnau said.
For those not using the Castelnau exchange facility, a matched bargain trading facility will be established with JP Jenkins, Hornby added.
A barrel of Brent fell to USD70.59 midday Thursday, from USD70.87 at the time of the London equities close on Wednesday. Gold traded at USD2,946.81 an ounce, up from USD2,935.01.
Global oil demand growth is set to accelerate this year but the escalating trade war launched by US President Donald Trump threatens to disrupt the market, the International Energy Agency said.
The IEA noted that crude prices dropped in February and early March as concerns grew about the impact of trade tensions on the global economy and the Opec+ cartel confirmed plans to raise production next month.
By Eric Cunha, Alliance News news editor
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