3rd Jan 2025 08:42
(Alliance News) - London's FTSE 100, fresh from a stellar start to the year, surrendered some of that progress on Friday morning, following mixed trade in Asia and a weak close on Wall Street.
The FTSE 100 index opened down 5.86 points, 0.1%, at 8,254.23. The FTSE 250 was down 51.56 points, 0.3%, at 20,588.67, and the AIM All-Share was down just 0.01 of a point at 723.69.
The Cboe UK 100 was flat at 827.68, the Cboe UK 250 was 0.1% lower at 18,013.90, and the Cboe Small Companies was flat at 15,967.18.
The CAC 40 in Paris was down 0.7%, while the DAX 40 in Frankfurt was 0.1% lower.
In New York on Thursday, the Dow Jones Industrial Average fell 0.4%, the S&P 500 and the Nasdaq Composite lost 0.2%.
Analysts at Deutsche Bank commented: "Markets got 2025 off to a gloomy start yesterday, with the S&P 500 extending its post-Christmas losses as various headlines added to the downbeat tone. The latest decline is now the 5th consecutive move lower for the S&P, making it the longest run of declines for the index since April. But as we mentioned yesterday, the first trading day has been a very poor guide to the rest of the year in recent times, so we shouldn’t extrapolate things too far. Indeed, both of the last two years saw the S&P 500 lose ground on the first day, before going on to rise more than 20% over the year as a whole.
"Several factors helped to extend the selloff over the last 24 hours. First up, we had a lot of negative headlines out of Europe, as concerns mounted about the energy situation after the expiry of the transit deal between Russia and Ukraine. That meant European natural gas futures closed above EUR50/MWh for the first time since October 2023, and the end of the transit deal has also coincided with some very cold temperatures in northern Europe right now. So the fear is that higher gas prices are going to add to inflationary pressures, whilst gas storage has been falling faster than usual this year as well."
On Friday, the US ISM manufacturing PMI at 1500 GMT will be the highlight of the global economic calendar.
Figures on Thursday had showed the US labour market remains robust while manufacturing activity, although weak, ticked up from an earlier estimate.
The seasonally adjusted S&P Global US manufacturing purchasing managers' index fell to 49.4 in December, down from 49.7 in November.
But December's reading was better than the preliminary "flash" estimate of 48.3, although it marked the sixth consecutive month of contraction.
Meanwhile, data showed weekly jobless claims, considered a proxy for lay-offs, fell by more than expected, allaying fears of a slowing jobs market.
According to the Department of Labor, in the week ending December 28, the advance figure for seasonally adjusted initial claims was 211,000, a decrease of 9,000 from the previous week's revised level.
The previous week's level was revised up by 1,000 from 219,000 to 220,000. FXStreet consensus was for a slight increase to 222,000 in the most recent week.
The 4-week moving average was 223,250, a decrease of 3,500 from the previous week's revised average. The previous week's average was revised up by 250 from 226,500 to 226,750.
In Asia, financial markets in Tokyo remained closed. In China, the Shanghai Composite sunk 1.6%. The Hang Seng Index in Hong Kong was up 0.7%. The S&P/ASX 200 in Sydney rose 0.6%.
China is "determined" to continue opening up its economy to the world in 2025, a top economic planning official said Friday, as Beijing steels itself for potential trade turmoil when US President-elect Donald Trump takes office.
The world's second-largest economy has struggled to revive growth following the Covid-19 pandemic and remains beset by a debt crisis in the crucial housing sector, chronically low consumption and high youth unemployment.
Prospects may darken further after Trump's inauguration on January 20 – the mercurial US leader hiked tariffs on Chinese imports during a wide-ranging trade war in his first term in office, and has promised more of the same.
But on Friday officials from China's top planning body, the National Development & Reform Commission, said that "no matter how the external environment changes, full of uncertainty, China's determination and actions to open up to the outside world will remain unchanged".
The pound rose to USD1.2395 early Friday, from USD1.2378 at the time of the London equities close on Thursday. The euro climbed to USD1.0282 from USD1.0251. Versus the yen, the dollar was lower at JPY157.32 from JPY157.63.
Analysts at ING commented: "The first trading day of the year brought fresh pressure on European currencies. There is now a considerable risk premium being built into EUR/USD, and we suspect that both protectionism and the recent rise in gas prices are playing a role. A short-term dollar correction would be warranted by technical factors, but the overarching narrative should remain USD-positive."
In London, miners put pressure on the FTSE 100. Anglo American was down 1.1%, Antofagasta 1.0% lower and Rio Tinto down 0.9%.
Oil majors climbed, shaking off a slight fall in the Brent price. A barrel of Brent faded to USD75.89 early Friday, from USD76.43 late Thursday.
Shell added 0.8% and BP rose 0.7%.
Tullow Oil jumped 12% on a tax verdict boost.
The International Chamber of Commerce on Thursday determined that branch profit remittance tax is not applicable to Tullow Ghana since it falls outside the tax regime provided for in the petroleum agreements.
The verdict relates to Tullow's operations under the Deepwater Tano and West Cape Three Points Petroleum Agreements, offshore Ghana, which include the Jubilee and TEN fields.
As a result of the award, Tullow Ghana is not liable to pay the USD320 million BPRT assessment issued by the Ghana Revenue Authority and will have no future exposure to BPRT in respect of its operations under the petroleum agreements.
Chief Executive Officer Rahul Dhir commented: "We are delighted with the outcome and decision of the Tribunal, which affirms our assessment and removes a material overhang from our business. We have continuously had confidence in the sanctity of our petroleum agreements and the dispute resolution process, which has now brought certainty to all parties. I look forward to constructive discussions with the Government of Ghana to resolve the remaining claims so that our collective focus remains on maximising value from the Jubilee and TEN fields."
Gold traded at USD2,652.63 an ounce early Friday, fading from USD2,657.49 at the time of the London equities close on Thursday.
By Eric Cunha, Alliance News news editor
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