18th Feb 2025 12:09
(Alliance News) - Blue-chip stocks in Europe were mixed Tuesday afternoon, with the FTSE 100 outperforming, as eyes remain on peace talks between the US and Russia over Ukraine.
Miners and defence firms helped the FTSE 100 outperform. The pound hit a roughly two-month high after UK jobs data, but fell back as the morning wore on, meanwhile.
The FTSE 100 index rose 14.82 points, 0.2%, at 8,782.83. The FTSE 250 fell 34.80 points, 0.2%, at 20,903.88, and the AIM All-Share rose 0.37 of a point, 0.1%, at 725.59.
The Cboe UK 100 added 0.2% to 881.24, the Cboe UK 250 dropped 0.2% to 18,237.73, and the Cboe Small Companies fell 1.2% at 15,926.17.
In Paris, the CAC 40 was up 0.1%. Frankfurt's DAX 40 fell slightly.
Scope Markets analyst Joshua Mahony said markets are showing "a degree of hesitancy" over peace talks between the US and Russia over Ukraine.
"Zelensky has stated that he will not agree to a deal that does not involve the Ukrainians, while Europe are waking up to the notion of them having to support Ukraine in the absence of US involvement. A peace deal could provide the basis for lower commodity prices and lower military assistance to Ukraine. However, the benefits of a lower bill to fund Ukrainian war efforts soon fade once factoring in the clear requirement to build out the European military force and potential troops on the ground under any peace agreement. Nonetheless, peace in Europe does provide a bullish driver for the region and thus the success or failing of these talks will likely be reflected in equity valuations going forward," the analyst said.
The pound was quoted at USD1.2600 midday Tuesday, down from USD1.2613 at the time of the London equities close on Monday. It had spiked as high as USD1.2622 earlier Tuesday, its best level since December.
The euro stood lower at USD1.0463 from USD1.0482. Against the yen, the dollar was trading higher at JPY151.70 from JPY151.41.
The UK jobless rate was lower than expected in the final three months of 2024, and pay growth picked, numbers on Tuesday showed.
The Office for National Statistics said the UK jobless rate in the three months to December was 4.4%, where it stood in the three months to November. The unemployment rate had been expected to pick up to 4.5%, according to FXStreet cited consensus.
The ONS noted the UK jobless rate increased from 4.3% in the three months to September and from 3.9% in the final three months of 2023.
Average yearly growth for regular earnings, so excluding bonuses, was 6.0% in December alone. Growth picked up speed from 5.6% in November. Including bonuses, pay growth picked up to 5.9% in December, from 5.5% in November.
For the three months to December, average regular pay growth was 5.9%, accelerating from 5.6% in the three months to November. Total pay growth was 6.0%, picking up speed from 5.5%. The total pay outcome beat the FXStreet cited consensus of 5.9%, while regular pay growth was in line.
Deutsche Bank analyst Sanjay Raja commented: "If you believe the labour force survey data, the labour market is creaking but not cracking. Some slack is emerging, but we aren't seeing a worrying spiral in unemployment – just yet. That said, survey data remain weak. And given the issues surrounding the LFS, we remain vigilant to the survey data. On wages, some tempering of wage growth is likely over the coming quarters – despite the astonishingly strong rates recorded in the official average weekly earnings data.
"Bottom line, today's surprise gains in LFS employment and HMRC payrolls will give the [Bank of England's] Monetary Policy Committee more time to assess the labour market and demand side of the economy, especially following the upside to Q4-24 GDP we saw last week. To be sure, we expect to see more normalisation in the labour market. The rise in employer national insurance contributions will almost certainly come at a price. And survey data remain consistent with at least a few-tenths increase in the unemployment rate over the coming quarters."
UK consumer price inflation data is released on Wednesday. Data is expected to show the pace of yearly consumer price picked up to 2.8% last month, from 2.5% in December, according to consensus cited by FXStreet.
The governor of the Bank of England has said the UK is experiencing a "weak growth environment" as he cautioned over the impact of "global fragmentation" on the world economy.
Andrew Bailey, speaking at an event held by think tank Bruegel in Belgium, nonetheless said it was a good thing that inflation had eased faster than previous expectations.
Continuing disinflation in the economy – meaning price rises cooling – allowed the Bank to cut interest rates for the third time this month, Bailey said, adding: "Because we are facing a weak growth environment in the UK.
"It is quite hard to work out to what extent that weaker growth story is a result of supply-side weakness, or supply-and-demand-side weakness.
Bailey said pay growth rose "not quite as much as we were expecting" in the latest data, but that it did not change the bank's view that wage increases are likely to slow over the next year.
Gold was quoted higher at USD2,912.71 an ounce early on Tuesday afternoon, from USD2,898.96 at the time of the London equities close on Monday. Brent oil traded at USD75.40 a barrel, rising from USD74.98.
Antofagasta shares rose 1.0%. It reported a rise in annual earnings and the miner said it is encouraged by the demand outlook for copper, a commodity the "world needs more of".
Antofagasta's pretax profit in 2024 amounted to USD2.07 billion, a 5.4% rise from USD1.97 billion in 2023. Revenue improved 4.6% to USD6.61 billion from USD6.32 billion.
AJ Bell analyst Russ Mould commented: "Doctor Copper' gets its nickname because the industrial metal’s many uses mean it can be a good guide to global economic health, so it is encouraging to see both the commodity and the share price of major producer Antofagasta start 2025 on an upward trend after last year’s dip.
"The copper price slid in summer 2024, amid worries about China in particular, as the world’s second-biggest economy grappled with a real estate bust and a slowdown in growth. But interest rate cuts worldwide, and the application of fiscal and monetary stimulus by Beijing to try and boost growth, are helping the industrial metal build some price momentum in 2025, a trend which Antofagasta will welcome."
Glencore added 1.0% after Morgan Stanley raised the miner to 'overweight'.
Also supporting the FTSE 100, aerospace and defence firms BAE and Rolls-Royce rose 1.0% and 1.1%, on the expectation of increased government defence spend in Europe.
Elsewhere, Plus500 declined 4.0% though it hailed a "strong" set of results as it announced a new share buyback alongside revenue growth that was as expected.
The contracts-for-difference trading platform provider said pretax profit edged up 0.3% to USD337.2 million in 2024 from GBP336.2 million in 2023, as revenue rose 5.8% to USD768.3 million from USD762.2 million.
Revenue comprised trading income of USD711.6 million and interest income of USD56.7 million, which grew by 6% and 9% year-on-year, respectively.
Earnings before interest, tax, depreciation and amortisation improved 0.5% to USD342.2 million from USD340.5 million, although the Ebitda margin narrowed to 45% from 47%.
Figures for revenue and Ebitda were in line with guidance provided by Plus500 in January.
The number of new customers grew by 30% to 118,010 in 2024 and active customers grew by 9% to 254,138. However, average revenue per customer slipped by 3.0% to USD3,023 from USD3,116.
Inspiration Healthcare jumped 56%. It expects to report annual revenue growth and a profitable year.
The firm, which sells products to the hospital sector, says revenue for the year ended January 31 of GBP38.3 million is expected, a rise of 1.9% from GBP37.6 million. It follows a "strong second half". It expects to be earnings before interest, tax, depreciation, and amortisation positive. It achieved an Ebitda of GBP2.0 million in the prior year.
Serica Energy shed 12%. It said Storm Eowyn had caused production from the Triton floating production storage and offloading vessel to be suspended.
As a result, the North Sea-focused oil and gas producer said 2025 production guidance is under review. It will be "restated or revised pending further clarity on the timeline and implications for the necessary Triton activities, the firm said in a statement.
Production for January averaged 37,000 barrels of oil per day, but fell to 27,000 boepd in February.
By Eric Cunha, Alliance News news editor
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