8th Jan 2025 12:03
(Alliance News) - Stock prices in London were lower heading into Wednesday afternoon, with surging bond yields, pre-US jobs data nerves and Donald Trump tariff fears hitting the mood in the equity market.
The FTSE 100 index were down 27.54 points, 0.3%, at 8,217.74. The FTSE 250 was down 264.16 points, 1.3%, at 20,086.21, and the AIM All-Share was down 4.22 points, 0.6%, at 721.06.
The Cboe UK 100 was down 0.4% at 822.92, the Cboe UK 250 was 1.5% lower at 17,494.59, and the Cboe Small Companies was down 0.2% at 15,824.60.
The CAC 40 in Paris was down 0.7%, while the DAX 40 in Frankfurt shed 0.2%.
The pound was lower at USD1.2470 early Wednesday afternoon from USD1.2498 at the time of the London equities close on Tuesday. Sterling fell as low as USD1.2325 on Wednesday morning, its worst level since April of last year. The euro fell to USD1.0291 from USD1.0377. Versus the yen, the dollar was higher at JPY158.43 from JPY157.77.
The dollar got a boost and stocks took a hit from a CNN report that Trump is looking to declare a national economic emergency to force through a slew of tariffs on allies and rivals. CNN cited "four sources familiar with the matter".
A barrel of Brent firmed to USD77.00 midday Wednesday, from USD76.83 at the time of the London equities close on Tuesday. Gold faded to USD2,649.83 an ounce from USD2,654.67.
In London, Shell shares fell 1.9%. It reported that it expects to report a decline in Integrated Gas output for the fourth quarter, weaker trading & optimisation results for the unit, and well write-offs.
The oil major expects to report final-quarter Integrated Gas production between 880,000 to 920,000 barrels of oil equivalent per day, a decline from 941,000 in the third quarter of 2024.
Trading and optimisation results in the unit are "expected to be significantly lower" than in the third quarter. This is driven by the non-cash hit from the expiration of hedging contracts. Fourth-quarter well write-offs of around USD300 million are expected in Integrated Gas.
Adjusted earnings pretax and depreciation in Integrated Gas between USD1.2 billion and USD1.6 billion are expected, compared to USD1.4 billion in the third quarter.
In Upstream, earnings between USD2.4 billion and USD3.1 billion are forecast, compared to USD2.7 billion in the third quarter. Upstream exploration well write-offs of around USD400 million are expected. In the Marketing division, earnings between USD400 million and USD800 million are predicted, after it achieved USD600 million in the third quarter.
In Chemicals & Products, Shell forecasts an earnings outcome between USD800 million and USD1.0 billion, compared to USD900 million in the third quarter. In the chemicals sub-segment alone, however, it expects a loss.
"The commodity price backdrop wasn't helpful for Shell in the last quarter of 2024 but oil prices have been gaining ground in the early weeks of 2025 amid declining OPEC production and continuing signs the US economy remains robust," AJ Bell analyst Russ Mould commented.
Flutter Entertainment shares fell 2.4%. It warned US revenue will be weaker than expected, hurt by punter-friendly sports results. The gambling firm said "strong US player momentum" has been offset by "very unfavourable US sports results across the remainder of November and in December".
Flutter said the 2025/25 National Football League season in gridiron has been "the most customer friendly since the launch of online sports betting with the highest rate of favourites winning in nearly 20 years".
At USD5.78 billion, US revenue for 2024 is now expected to be some USD370 million lower than its previous guidance midpoint. Its previous US revenue guidance range was USD6.05 billion to USD6.25 billion. US adjusted earnings before interest, tax, depreciation and amortisation are expected to be around USD205 million lower than the previous guidance midpoint at around USD505 million. Its previous guidance range was between USD670 million and USD750 million.
Away from the US, the picture is more favourable. In the UK & Ireland segment, favourable English Premier League results mean revenue and adjusted Ebitda for 2024 will be around 1% and 2% higher than the mid-points of previous guidance. Flutter is scheduled to release fourth-quarter earnings on March 4.
Entain shares fell 2.4% in a negative read across. Entain owns Ladbrokes.
On the up, banking shares climbed. Barclays and NatWest rose 0.8%.
Shares in financials came under pressure on Tuesday on rising bond yields in the UK. The yield on the 30-year gilt spiked to levels last seen since 1998.
Ebury analyst Matthew Ryan said that although the pace at which yields widened was not as dramatic as moves seen following the mini-budget in 2022, "the impact of higher rates on the economy, particularly via higher mortgage rates, is not to be underestimated".
Back in London, Hornby added 7.2%. It said it saw an increase in sales during its third quarter, following momentum in Black Friday and Christmas trading.
The firm said its group sales for the third quarter that ended December 31 were 7% ahead year-on-year, excluding income from LCD Enterprises, which was sold at the end of November.
In New York, the Dow Jones Industrial Average is called down 0.1%, and the S&P 500 and Nasdaq Composite down 0.2%.
The latest ADP US jobs data is released at 1315 GMT on Wednesday, a precursor to Friday's official nonfarm payrolls report.
By Eric Cunha, Alliance News news editor
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