20th Oct 2025 09:33
(Alliance News) - Stock prices in London opened mostly higher on Monday, with banking shares rebounding after last week's sell-off and improved sentiment driven by renewed optimism over US-China trade talks.
The FTSE 100 index opened up 42.27 points, 0.5%, at 9,396.84. The FTSE 250 was up 26.31 points, 0.1%, at 21,807.47, and the AIM All-Share was marginally down 0.65 points, at 772.00.
The Cboe UK 100 was up 0.4% at 939.24, the Cboe UK 250 was up 0.2% at 1,9024.43, and the Cboe Small Companies was marginally down at 1,7501.54.
In European equities on Monday, the CAC 40 in Paris was up 0.7%, while the DAX 40 in Frankfurt was up 1.2%.
After a bruising session on Friday, when financial stocks led steep declines, banks rebounded strongly. HSBC rose 1.7%, Standard Chartered gained 2.1%, Lloyds climbed 1.4%, and Barclays added 1.5%.
However, B&M European Value Retail tumbled 15%, making it the worst performer on the FTSE 250, after the retailer said it had identified an accounting error and lowered profit guidance. The company also announced that its chief financial officer, Mike Schmidt, will step down.
Despite Monday's rebound, concerns about the health of US regional banks and the broader credit environment remain "very central", said Chris Turner, global head of markets and regional head of research for UK & CEE at ING.
"On Friday, some recovery in sentiment helped the dollar rebound, signalling that going forward, some harder evidence backing those concerns is probably required to pressure the dollar again," he said.
The pound was quoted at USD1.3420 early Monday, higher than USD1.3398 at the London equities close on Friday. The euro stood at USD1.1670, higher compared to USD1.1664. Against the yen, the dollar was trading at JPY150.73, higher compared to JPY150.31.
JPMorgan Chief Executive Officer Jamie Dimon last week warned that there could be more "cockroaches" among US lenders, referring to distressed banks after two regional institutions disclosed credit losses and triggered a global sell-off.
Defence stocks also advanced across Europe as investors reacted to the latest developments in the Russia-Ukraine conflict.
Babcock rose 2.9% to lead the FTSE 100, while BAE Systems gained 1.5%. In continental trading, Rheinmetall in Frankfurt climbed 4.4%, Leonardo in Milan added 3.2%, and Safran in Paris advanced 2.1%.
Babcock was the biggest winner on the FSTE100, up 2.9%. BAE systems was up 1.5%, while Rheinmetall in Frankfurt was up 4.4%, Italy's Leonardo was up 3.2% and Paris-listed Safran was up 2.1%.
The rally followed reports that Ukrainian President Volodymyr Zelensky left Washington empty-handed after US President Donald Trump declined to supply Tomahawk missiles, instead urging peace talks with Russian President Vladimir Putin.
Trump said on social media that their talks were "very interesting, and cordial, but I told him, as I likewise strongly suggested to President Putin, that it is time to stop the killing, and make a DEAL!"
Early indications suggest that risk sentiment is picking up, with positive signals coming from US-China trade talks.
China and the US agreed Saturday to conduct another round of trade talks in the coming week, as the world's two biggest economies seek to avoid another damaging tit-for-tat tariff battle.
Kathleen Brooks, research director at XTB said that the watering down of Trump's tariff threats "could be good for overall risk sentiment"
In Asia on Monday, markets rallied. The Nikkei 225 in Tokyo ended up 3.4%, the Shanghai Composite rose 0.6%, the Hang Seng in Hong Kong jumped 2.5%, and the S&P/ASX 200 in Sydney closed up 0.4%.
The gains follow Friday's recovery for US stocks as the Dow Jones Industrial Average, the S&P 500 index and Nasdaq Composite all closed 0.5% higher.
The yield on the US 10-year Treasury was quoted at 4.02%, widening from 4.00% on Friday. The yield on the US 30-year Treasury stood at 4.61%, widening from 4.60%.
In Germany, producer prices were weaker than expected in September. Destatis reported a 0.1% monthly decline, compared to expectations for a 0.1% rise. Year-on-year, prices fell 1.7%, easing from a 2.2% decline in August, as energy costs continued to weigh.
Back in London, Rolls-Royce climbed 2.8%, benefiting from the rally in defence-linked stocks.
B&M European Value Retail tumbled 15%, making it the worst performer on the FTSE 250, after the retailer said it had identified an accounting error and lowered profit guidance. The company also announced that its chief financial officer, Mike Schmidt, will step down.
B&M now expects adjusted earnings before interest, tax, depreciation and amortisation of between GBP470 million and GBP520 million for the year to March 28, down from a prior range of GBP510 million to GBP560 million. The firm also identified around GBP7 million of overseas freight costs that had not been correctly recognised following an operating system update earlier this year.
For the first half of the financial year, B&M expects adjusted Ebitda of GBP191 million, compared to the previous guidance of around GBP198 million.
Among mid-caps, Ithaca Energy gained 4.8% after Jefferies upgraded the oil and gas producer to buy from hold and raised its price target to 220 pence from 145p.
Bank of Ireland edged up 0.2%, while Secure Trust Bank fell 2.0% after both said they may raise provisions related to the UK motor finance commission redress scheme.
Bank of Ireland said it could increase its provision to around GBP350 million from GBP143 million, while Secure Trust expects to lift its provision by around GBP16 million to GBP21 million. Both lenders criticised the Financial Conduct Authority's proposed methodology.
Bank of Ireland said it does not believe the FCA "reflects the actual loss to customers or achieves a proportionate outcome" while Secure Trust argues that the regulator's position is "towards the extreme end" of expected outcomes from the Supreme Court judgement on motor finance commissions.
Brent oil was quoted at USD60.78 a barrel early in London on Monday from USD60.03 late Friday.
Gold was quoted at USD4,261.00 an ounce early Monday, lower than USD4,270.10 on Friday.
By Eva Castanedo, Alliance News reporter
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