13th Feb 2025 08:52
(Alliance News) - London's FTSE 100 opened lower on Thursday, with poorly-received earnings, ex-dividend stocks and its index composition meaning it underperformed continental peers which surged on Ukraine peace hope.
The FTSE 100 index traded down 45.80 points, 0.5%, at 8,761.64. The FTSE 250 was up 42.78 points, 0.2%, at 20,923.28, and the AIM All-Share rose 0.68 of a point, 0.1%, at 724.07.
The Cboe UK 100 fell 0.5% at 877.84, the Cboe UK 250 rose 0.3% to 18,278.60 and the Cboe Small Companies was up 0.1% at 16,094.73.
In European equities, the CAC 40 in Paris added 0.7%, while Frankfurt's DAX 40 shot up 1.0%.
In Tokyo on Thursday, the Nikkei 225 added 1.3%, while in Sydney, the S&P/ASX 200 edged up 0.1%. The Shanghai Composite ended down 0.4%, while the Hang Seng Index fell 0.2%, surrendering earlier gains.
Against the dollar, the pound rose to USD1.2482 early Thursday, from USD1.2415 at the time of the London equities close on Wednesday. The euro rose to USD1.0416 from USD1.0364. Against the yen, the greenback faded to JPY154.09 from JPY154.77.
The UK economy registered unexpected growth in the final three months of 2024, numbers on Thursday showed, boosted by the services sector.
The UK economy climbed 0.1% quarter-on-quarter in the three months to December, the Office for National Statistics said. Gross domestic product had been flat in the third-quarter from the second. The fourth-quarter reading defied expectations of a 0.1% fall, according to FXStreet-cited consensus.
A barrel of Brent fell to USD74.61 early Thursday from USD75.81 late Wednesday. Gold rose to USD2,911.42 an ounce from USD2,897.30.
US President Donald Trump and Russian President Vladimir Putin spoke by phone on Wednesday and agreed to begin negotiations to end the war in Ukraine "immediately."
The direct contact by the leaders of the rival powers - and the apparently warm words exchanged - could have potentially far-reaching implications for Ukraine, which has been fending off a full-scale Russian invasion for nearly three years with Washington's help.
Trump, writing on his Truth Social platform, described the call with Putin as "lengthy and highly productive," adding that they had also agreed to visit each other's countries.
The Kremlin confirmed the conversation, stating that Putin invited Trump to Moscow and expressed his readiness to receive White House representatives for discussions on the conflict.
"While much remains uncertain, markets are already moving to price in the possibility of peace," deVere analyst Nigel Green commented.
"Equities, particularly in sectors hit hardest by supply chain disruptions and energy volatility, are already responding positively."
Green continued: "A shift away from war-driven volatility opens the door for capital to flow back into European equities, industrials, and consumer sectors that have struggled under the weight of uncertainty."
But defence stocks struggled and oil majors fell, the latter tracking Brent lower. BAE Systems fell 0.3%. BP fell 0.2% and Shell lost 1.8%. Shell also went ex-dividend, however, weighing more on the stock.
But Ferrexpo, a maker of iron ore pellets in Ukraine, jumped 17%. Budget carrier Wizz Air rose 8.9%.
Several Nato allies have stressed that Ukraine and Europe must not be cut out of any peace negotiations.
Swedish defence minister Pal Jonson said European nations provided about 60% of the military support to Ukraine last year and must be involved, especially given US demands that Europe take more responsibility for Ukraine's security in the longer term.
"Let's not forget, Russia remains a threat well beyond Ukraine," said UK Defence Secretary John Healey after the US rattled Nato by saying that Ukraine should never join the alliance and that European allies should take responsibility for Ukraine's security going forward.
On the FTSE 100, Barclays fell 5.1%, Unilever lost 6.4% and BAT fell 7.8% after the trio reported annual earnings.
Lender Barclays reported an earnings improvement and announced a GBP1.0 billion, though analysts at Citi said there "little new to get excited about".
"This, plus the strong run up in the share price over the past year, may temper any initial reaction," explained analysts at Citi.
Unilever announced a EUR1.5 billion buyback and underlying sales growth for 2024. However, it noted the new year will start in a subdued fashion.
The consumer goods firm also announced it will list its Ice Cream business in Amsterdam, London and New York.
Unilever said: "The separation of Ice Cream is on track to complete by the end of 2025. We are making progress on the key workstreams, including the legal entities set up, implementing the standalone operating model and preparing the carve-out financials. Jean-Francois van Boxmeer has been appointed as chair designate for the separated Ice Cream business.
"Ice Cream will be separated by way of demerger, through listing of the business in Amsterdam, London and New York, the same three exchanges on which Unilever PLC shares are currently traded. The Ice Cream business will be incorporated in the Netherlands and will continue to be headquartered in Amsterdam. This decision follows a full review by the board of separation options, focused on maximising returns for shareholders, setting the Ice Cream business up for success and execution certainty by the end of 2025."
Tobacco firm BAT said it booked a GBP6.20 billion charge related to ongoing litigation in Canada, weighing on the shares.
It swung to 2024 profit, however, having booked GBP28.61 billion worth of depreciation, amortisation and impairment costs in 2023, which had pushed it to a loss.
Elsewhere in London, Tate & Lyle fell 8.3% as the ingredients maker said profit growth will be at the lower end of expectations.
Tate & Lyle expects earnings before interest, tax, depreciation and amortisation will be at the lower end of 4% to 7% guidance range.
By Eric Cunha, Alliance News news editor
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