3rd Mar 2025 12:05
(Alliance News) - Stock prices in London were mostly higher at midday on Monday, ahead of US manufacturing PMI data due in the afternoon.
The FTSE 100 index was up 58.45 points, 0.7%, at 8,868.19. The FTSE 250 was up 23.20 points, 0.1%, at 20,349.58, and the AIM All-Share was up 1.20 points, 0.2%, at 705.03.
The Cboe UK 100 was up 0.8% at 888.93, the Cboe UK 250 was down 0.1% at 17,647.57, and the Cboe Small Companies was down 0.3% at 15,493.38.
BAE Systems led the FTSE 100, up 14%.
Its price target was raised to 1,725 pence by JPMorgan, which maintained an 'overweight' rating.
The aerospace and defence company also stands to benefit from increased defence spending in Europe, after a European summit involving Ukrainian President Volodymyr Zelensky.
"Investors aren't simply expecting a boost to defence companies from supplying equipment and services to Ukraine," said AJ Bell's Russ Mould. "They're also focused on the potential for governments around the world now taking defence even more seriously and spending large swathes of money to help others while also defending their own land."
Bunzl remained the index's worst performer, down 8.1% following the publication of its annual results.
The distribution services company said profit and sales fell in 2024, held back by a sluggish performance in North America.
"Despite significant uncertainties relating to the wider economic and geopolitical landscape, the group expects robust revenue growth in 2025, at constant exchange rates, driven by announced acquisitions and slight underlying revenue growth," Bunzl added.
"Falling prices as we emerge from an inflationary period have been a headwind for Bunzl's revenue growth and while this effect is beginning to wear off, underlying growth looks set to remain subdued," Mould commented.
On AIM, Caspian Sunrise lost 11%.
The Kazakhstan-focused oil and gas company said production in 2024 totalled 623,312 barrels at 1,707 barrels of oil per day, down from 665,114 total or 1,822 bopd in 2023.
It also updated on various deals, including the sale of the BNG contract area's shallow structures for which the long stop date has been extended to March 31.
Bigblu Broadband gained 13%.
The broadband services provider announced plans to return up to GBP6.1 million to shareholders through a tender offer for up to 15.3 million shares at 40 pence each, using surplus cash from its sale of SkyMesh in December.
Among small caps, Severfield lost 44%.
The York, England-based structural steel contractor cancelled its buyback programme worth up to GBP10 million, having repurchased shares worth GBP9.3 million.
It also warned that "market conditions have shown no signs of improvement" since its interim results, contributing to Severfield revising its 2025 underlying pretax profit forecast to between GBP18 million and GBP20 million with a decline expected in 2026.
"Shares in...Severfield have collapsed on a major profit warning which paints a bleak picture for the company's prospects," AJ Bell's Mould explained, noting that the firm "was being left to rust by investors".
"This suggests the outlook for the wider construction space in the UK is looking constrained," he continued. "While Severfield is more optimistic about the longer term, investors don't seem to have much patience for this argument and the cancellation of a share buyback, while it may be prudent, is not going to win anybody round."
Overall in London, Mould said: "Investors were remarkably calm given a whirlwind of geopolitical events over the past three days...Importantly, Trump hinted that the UK might avoid tariffs. It's far from a done deal, but it's a significant step forward and the type of good news that Chancellor Rachel Reeves needs.
"Avoiding tariffs could also improve investor sentiment towards the UK stock market, something that's also much needed."
The UK manufacturing PMI release was however lacking in such good news.
The UK S&P Global manufacturing purchasing managers' index fell to 46.9 points in February, from January's 48.3, suggesting a worsening decline for the UK manufacturing sector.
The reading topped the flash estimate of 46.4 points, but nonetheless represented a 14-month low for the PMI while job cuts were at their highest since May 2020.
"The home market was mainly downbeat due to a combination of rising cost pressures, an associated lack of willingness to spend among customers and the impact of policy changes announced in last year's autumn budget," S&P Global said. "The latest round of job losses reflected weak demand, cost control initiatives and restructuring in response to changes in both the minimum wage and employer national insurance contributions."
In European equities on Monday, the CAC 40 in Paris was up 0.8%, while the DAX 40 in Frankfurt was up 1.1%.
The eurozone's manufacturing sector remained in contraction in February, but the pace of decline slowed to its weakest in two years, survey results from S&P Global showed.
The Hamburg Commercial Bank manufacturing purchasing managers' index rose to 47.6 points in February from 46.6 in January, marking its highest level since early 2023. Although still below the 50-point neutral mark, the latest data signalled that the industrial downturn was at its "least severe" in nearly two years.
The pound was quoted higher at USD1.2658 at midday on Monday in London, compared to USD1.2588 at the equities close on Friday. The euro stood at USD1.0455, higher against USD1.0406. Against the yen, the dollar was trading higher at JPY150.95 compared to JPY150.38.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.2%, the S&P 500 index up 0.3%, and the Nasdaq Composite up 0.5%.
Brent oil was quoted higher at USD72.91 a barrel at midday in London on Monday from USD72.62 late Friday.
Gold was quoted higher at USD2,873.21 an ounce against USD2,848.92.
Still to come on Monday's economic calendar is the US manufacturing PMI and its ISM counterpart.
By Emma Curzon, Alliance News reporter
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BAE SystemsBunzlSeverfieldCaspian SunriseBigblu Broadb.