6th Jan 2025 11:51
(Alliance News) - Stock prices in London were mostly higher at midday on Monday, with investors mostly awaiting US inflation data in the afternoon.
As well as Monday's composite and services PMI readings, the first full trading week of 2025 has various jobs data releases from the US culminating in Friday's nonfarm payrolls.
More than half of UK companies plan to raise prices by early April, according to research by the British Chambers of Commerce. A survey of more than 4,800 firms found that 55% of them expect prices to increase in the next three months, up from 39% in a similar poll in the second half of 2024.
The survey also found business confidence has fallen since the spending statement, with 49% of firms saying they expect turnover to grow in the next year, down from 56% last year.
The group's Director General Shevaun Haviland, called the situation "a pressure cooker of rising costs and taxes".
"Last year's changes to the UK listing rules should make it more attractive for companies to list in London, which explains the widely held view that 2025 will be a much better year for IPOs," AJ Bell analyst Russ Mould commented. "However, with business sentiment currently weak due to government decisions in the budget, we may have to wait until the second half of the year before the pace of UK IPOs starts to accelerate. Businesses are still getting their heads around new cost pressures and solutions need to be found before they rush into a stock market listing."
The UK service sector remained in growth territory in December, numbers on Monday showed, though it was a largely tepid final quarter of the year.
The S&P Global UK service purchasing managers' index rose to 51.1 points in December, showing accelerated growth from 50.8 in November but below the flash estimate of 51.4.
"Meanwhile, survey respondents were still cautious about the outlook for business activity in 2025...Service providers widely commented on concerns about cutbacks to business and consumer spending, alongside the impact of rising employers' national insurance contributions," S&P Global said.
The FTSE 100 index was up 10.62 points, 0.1%, at 8,234.60. The FTSE 250 was up 109.86 points, 0.5%, at 20,701.26, and the AIM All-Share was up 3.44 points, 0.5%, at 728.84.
The Cboe UK 100 was up 0.1% at 825.75, the Cboe UK 250 was up 0.6% at 18,110.04, and the Cboe Small Companies was up 0.1% at 15,936.38.
Intermediate Capital led the FTSE 100, up 2.9%.
Experian was also among the winners, up 1.4%. RBC raised Experian to 'outperform' from 'sector perform' with a price target of 4,200 pence.
WPP and Unilever were the biggest losers, down 3.1% and 2.1% respectively.
UBS raised WPP's price target to 720 from 680 pence, keeping its 'sell' recommendation.
RBC cut Unilever to 'underperform' from 'sector perform' with a price target of 4,000 pence, cut from 4,800p.
"The FTSE 100 started the week on the back foot, dragged down by consumer non-cyclicals, basic materials and industrials," AJ Bell's Mould commented. "Share price weakness in big brand companies including Unilever, Reckitt and Haleon is often a signal that investors are worried about consumer spending and growing inflationary pressures. Renewed cost pressures may prompt companies to hike prices and this could see shoppers switch to cheaper supermarket own-brand items. It's a major risk for investors in big brand stocks to consider.
"Driving down the shares in the sector this time was negative broker comment as RBC downgraded Unilever to 'underperform', which hurt the Marmite maker and took its big brand peers down at the same time."
Ferrexpo led the FTSE 250, up 6.4%.
Bytes Technology came second, up 3.3%. Investec started its Bytes Technology ratings with 'buy' and a price target of 600 pence.
Raspberry Pi was the biggest loser, down 3.6%.
Diversified Energy was also in the red, down 2.5%.
The Birmingham, Alabama-based natural gas producer on Monday said it has acquired natural gas properties from Summit Natural Resources for around USD45 million. The deal is expected to close during the first quarter of 2025.
The facilities have a current net production of around 12 million cubic feet equivalent per day and existing coal mine methane volumes with the opportunity to extend production, and 300 wells in Appalachia overlap with existing operations which allows for increased cash margins.
The company said it has an estimated 2025 adjusted earnings before interest, tax, depreciation and amortisation of USD12 million.
Among smaller caps, THG was up 9.9%.
The e-commerce firm announced that the Financial Conduct Authority has approved the transfer of its listing category to the equity shares (commercial companies) category, effective from Monday. This will make THG eligible for FTSE UK index inclusion.
Gresham House Energy Storage Fund gained 6.3%.
The London-based fund investing in utility-scale battery energy storage systems said trading has improved and it has made "solid progress", adding that it expects full-year operational portfolio revenues of around GBP42 million.
It sees operational portfolio earnings before interest, tax, depreciation and amortisation of around GBP29 million in 2024, up from GBP25.8 million in 2023.
In European equities on Monday, the CAC 40 in Paris was up 1.1%, while the DAX 40 in Frankfurt was up 0.8%.
The pound was quoted higher at USD1.2536 at midday on Monday in London, compared to USD1.2414 at the equities close on Friday. The euro stood at USD1.0416, higher against USD1.0297. Against the yen, the dollar was trading flat at JPY157.31 compared to JPY157.33.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.1%, the S&P 500 index up 0.5%, and the Nasdaq Composite up 0.8%.
Shortly before the end of his term in office this month, US President Joe Biden is pushing through far-reaching protections of US waters from further oil and gas extraction.
The two "presidential memoranda" issued on Monday exempt all areas of the outer continental shelf off the east and west coasts of the country, the eastern Gulf of Mexico and other parts of the northern Bering Sea in Alaska from future oil and gas production. They will be in force indefinitely.
Brent oil was quoted at USD76.50 a barrel at midday in London on Monday, up from USD76.33 late Friday.
Gold was quoted higher at USD2,644.65 an ounce, higher against USD2,641.67.
Still to come on Monday's economic calendar are the composite PMI, services PMI and factory order readings from the US this afternoon.
By Emma Curzon, Alliance News reporter
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