27th Feb 2025 12:06
(Alliance News) - Stock prices in London were mostly lower at midday on Thursday, ahead of the afternoon's US jobless claims release.
The FTSE 100 index was up 30.65 points, 0.4%, at 8,762.11. The FTSE 250 was down 160.11 points, 0.8%, at 20,435.79, and the AIM All-Share was down 2.54 points, 0.4%, at 708.96.
The Cboe UK 100 was up 0.3% at 877.53, the Cboe UK 250 was down 0.9% at 17,766.60, and the Cboe Small Companies was down 0.2% at 15,743.29.
Rolls-Royce remained the FTSE 100's overwhelming leader, surging up 20% off the publication of its 2024 results and announcement of a new buyback programme.
"There was always a risk that Rolls-Royce's recovery story would lose momentum as it runs out of easy wins. Its latest results and upgraded guidance show that is not the case," said AJ Bell's Russ Mould.
"It's no longer about stabilising the business; the narrative has shifted to growth and Rolls-Royce is making solid progress. A GBP1 billion share buyback is akin to Rolls-Royce sticking its head out the window of a moving car on a warm summer's day, enjoying the ride and knowing everything is going well," he added.
WPP remained the biggest loser, falling 15% after its 2024 results noted a weakened client spread and predicted lower revenue for the current year.
Its full-year dividend was unchanged at 39.4p per share, however, defying market consensus cited by the Financial Times which had pencilled in a cut to 37.70p.
"Pinning its hopes on artificial intelligence investment to come to the rescue is not an argument which is carrying much weight with the market. Generative AI is perceived to be more of a threat than an opportunity for the business," Mould commented.
Aviva was also among the large-cap winners, rising 2.6%.
Pretax profit fell 25% GBP1.27 billion in 2024, the insurer reported, but operating profit climbed 20% to GBP1.77 billion and was ahead of the GBP1.67 billion consensus.
Aviva also raised the final dividend 6.7% to 23.8 pence from 22.3p, increasing the total payout by 6.9% to 35.7p.
Howden Joinery was the second-lowest constituent, losing 6.7%.
The trade kitchen supplier said revenue and pretax profit edged higher in 2024, to GBP328.1 million and GBP2.32 billion respectively, and nudged up its final dividend by 0.1p to 16.3p per share.
However, Howden Joinery predicted that the UK kitchen market will shrink in 2025, and said it expects continued inflationary pressures.
"The UK economic outlook is far from rosy and consumer sentiment has deteriorated since Rachel Reeves made 'tough decisions' in her Budget last October," Mould commented. "Prices could go up and jobs could be cut...That's disastrous for a company like Howden Joinery which relies on people being in a happy place to hand over thousands of pounds to do up their kitchen.
"Howden won't be suffering alone and it could still gain market share. However, that's not enough to stop investors fretting about near-term headwinds, hence why the shares sank on the news."
Itim was among the biggest winners on AIM, up 9.8%.
As well as announcing its signing of a five-year contract extension with The Entertainer, the retail software solutions provider reported increased pretax profit to GBP175,000 in 2024, swinging from the prior year's GBP1.1 million loss.
Revenue also increased to GBP17.9 million from GBP16.1 million.
CMO was AIM's worst performer, falling 78% after it announced a proposal to cancel its shares from trading on the index.
It expects the cancellation to become effective on March 27, and to "provide access to significant cost savings and identified sources of potential additional funding which will support the group's immediate funding requirements and fund growth going forward".
In other domestic news, Ukrainian President Volodymyr Zelensky is expected to come to the UK this weekend, the PA news agency understands.
It is thought that Zelensky is planning to make the trip as Prime Minister Keir Starmer is due to host a summit of European leaders to discuss defence.
Also, UK Transport Secretary Heidi Alexander has "set out a path to approving" Gatwick airport's expansion project, a government source told the PA news agency.
This comes after the Planning Inspectorate initially rejected the West Sussex airport's application to bring its emergency runway into routine use.
The Planning Inspectorate then recommended Alexander should give the project the go-ahead if adjustments are made on issues such as the proportion of passengers who travel to and from the airport by public transport, and noise mitigation.
Gatwick has until April 24 to respond to the new proposals, shortly after which Alexander is expected to make a final decision.
In European equities on Thursday, the CAC 40 in Paris was down 0.2%, while the DAX 40 in Frankfurt was down 0.7%.
Zelensky has also been invited to a special EU meeting on the Russia-Ukraine conflict and European security on March 6, European Council President Antonio Costa said on Thursday.
Saying there was a "new momentum which should lead to a comprehensive, just and lasting peace" in Ukraine, Costa said the meeting would discuss possible European security guarantees for any accord.
The pound was quoted lower at USD1.2676 at midday on Thursday in London, compared to USD1.2692 at the equities close on Wednesday. The euro stood lower at USD1.0480, against USD1.0509. Against the yen, the dollar was trading higher at JPY149.75 compared to JPY149.25.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.3%, the S&P 500 index up 0.6%, and the Nasdaq Composite up 0.6%.
Investors continue to digest results from Nvidia, whose latest annual results "beat earnings expectations for ninth quarter in a row – but that didn't stop its share price falling", as AJ Bell's Dan Coatsworth put it.
"There is a natural evolution in the world of business when you have a runaway success story – others will try to do things cheaper and users will have more choice. Companies are queuing up to have a bite of the cherry and Nvidia is no longer going to enjoy the AI-related feast on its own.
"Big tech firms which might have previously been Nvidia's key customers are starting to develop their own chips. Meanwhile Nvidia's established rivals continue to make enhancements...We've also had China's DeepSeek appear out of nowhere and show to the world that it is possible to run AI models for less money. These factors have completely changed the narrative in the board room towards choice and cost."
He continued: "At face value, Nvidia is clearly enjoying a purple patch given that sales and earnings continue to grow strongly and the AI theme remains intact. But more investors are going to be asking if all the easy money has now been made on the shares."
Nonetheless, Nvidia closed 3.7% higher at USD131.28 in New York on Wednesday, and the shares were up 0.7% at USD132.20 in after-hours trading.
US President Donald Trump has also said that President Zelensky will visit the White House on Friday to sign an economic deal that will include US access to Ukrainian rare earth minerals in exchange for American arms.
Brent oil was quoted slightly lower at USD72.73 a barrel at midday in London on Thursday from USD72.83 late Wednesday.
Gold was quoted lower at USD2,888.09 an ounce against USD2,912.10.
Still to come on Thursday's economic calendar, the US releases due out include durable goods orders, quarterly personal consumption expenditures, and Kansas City Fed manufacturing activity.
By Emma Curzon, Alliance News reporter
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