24th Jan 2025 12:01
(Alliance News) - Stock prices in London were mostly lower at midday on Friday as investors digest a slew of flash purchasing managers' index releases.
The FTSE 100 index was down 29.04 points, 0.3%, at 8,536.16. The FTSE 250 was up 56.83 points, 0.3%, at 20,577.22, and the AIM All-Share was down 2.45 points, 0.3%, at 718.41.
The Cboe UK 100 was down 0.4% at 855.88, the Cboe UK 250 was up 0.2% at 17,957.05, and the Cboe Small Companies was down 0.2% at 15,998.20.
The flash UK purchasing managers' composite output index improved to 50.9 in January from 50.4 in December, outperforming the consensus estimate of a fall to 50.0.
The flash UK services PMI business activity index ticked up to 51.2 in January from 51.1 in December, again beating consensus again, which had pencilled in a slowdown to 50.6 in January. The flash UK manufacturing PMI rose to 48.2 from 47.0 in December, above the FXStreet-cited consensus of 47.1.
In European equities on Friday, the CAC 40 in Paris was up 0.9%, while the DAX 40 in Frankfurt was up 0.3%.
The HCOB flash eurozone composite PMI improved to 50.2 points in January from 49.6 in December, beating consensus of a score still in negative territory at 49.7 points.
The flash services PMI fell to 51.4 points from 51.6, below FXStreet-cited consensus which had expected no change. The manufacturing PMI increased to an eight-month high of 46.1 points from 45.1, outperforming the consensus estimate of an uptick to just 45.3 points
The pound was quoted at USD1.2415 at midday on Friday in London, higher compared to USD1.2343 at the equities close on Thursday. The euro stood higher at USD1.0485, against USD1.0409. Against the yen, the dollar was trading lower at JPY155.98 compared to JPY156.02.
The Bank of Japan increased its policy rate by 25 basis points to 0.50%, as expected.
In London, Severn Trent was down 0.8% despite saying it was on track to meet guidance for the year to March 31.
The water company also said it expects to increase the dividend per share in financial 2026 to 126.02 pence, from 121.71p in financial 2025, based on November's consumer price index.
AJ Bell analyst Russ Mould commented: "Severn Trent has to tread carefully if it is to avoid a flood of negative publicity...At the same time, it needs to keep shareholders on side and that explains the promised increase in dividends.
"Reading between the lines, it's clear that Severn Trent is pleased about the price increases Ofwat has agreed to let it push through – although the company will be keen to avoid any hint of smugness. It makes it clear that increased charges will also support investment in its infrastructure to reduce spills and pollution. The company needs to ensure it delivers if it is to avoid renewed pressure from regulators and politicians."
Burberry continued to lead the FTSE 250, jumping 13%.
The luxury goods firm said comparable sales declined by 4% in the 13 weeks to December 28 from a year before, compared to a 20% annual drop in the second quarter. Market consensus had predicted a 12% annual decline.
The figures "wouldn't be cause for celebration in normal times," Mould explained.
"But given rock-bottom expectations, the fact sales fell less than anticipated and the company might now dodge a full-year loss is something for investors to embrace. It provides some confidence that new CEO Joshua Schulman will be able to turn around the company's fortunes.
"The Asia Pacific region which has been central to Burberry's success over the last decade or more continues to struggle thanks to China's economic woes. North America has come to the rescue with sales increasing over the third quarter."
Mould added: "Burberry needs to reignite and define its brand in a way which will appeal to the kind of shopper with money to spend on high ticket price items...Schulman now needs to find a Goldilocks solution where the brand is neither seen as too cheap nor unattainably expensive."
Among smaller companies, Renew Holdings fell 23%.
The engineering firm warned that annual profit will be below market expectations, largely due to lower-than-expected activity levels for its Rail business.
It said trading within the rail sector has been impacted by the slow start to the Control Period 7 delivery plan, which started last April.
Stocks in New York were called lower. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite are all called down 0.1%.
Brent oil was quoted lower at USD77.95 a barrel at midday in London on Friday from USD78.14 late Thursday.
Gold was higher at USD2,778.72 an ounce against USD2,756.70.
Meanwhile, the number of UK businesses in 'critical' financial distress jumped by 50% in the final quarter of last year, according to the latest 'Red Flag Alert' report from insolvency advisor Begbies Traynor. The biggest increase was in consumer-facing sectors, including hotels & accommodations, leisure & cultural activities, general retailers, and food & drug retailers.
"As we start a new calendar year, there is very little to be excited about. Across nearly every sector, there has been a unprecedented level of growth in the number of firms who are at serious risk of entering insolvency in the next 12 months," commented Julie Palmer, a partner at Begbies.
Still to come on Friday's economic calendar is the US flash composite PMI release at 1445 GMT.
By Emma Curzon, Alliance News reporter
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