9th Jan 2025 08:45
(Alliance News) - Stock prices in London made a largely uninspiring start to Thursday, amid a mixed response to Christmas trading statements from high streets, while the pound's descent continued.
The FTSE 100 index opened up 11.69 points, 0.1%, at 8,262.72. The FTSE 250 was down 118.85 points, 0.6%, at 19,833.39, and the AIM All-Share lost 0.63 of a point, 0.1%, at 719.48.
The Cboe UK 100 was up 0.3% at 827.88, the Cboe UK 250 lost 0.6% at 17,278.94, and the Cboe Small Companies was down 0.8% at 15,512.70.
Tesco shares declined 2.9%, while fellow grocer Sainsbury's fell 4.7%.
Tesco underwhelmed despite reporting stronger festive trade. It hailed its "biggest ever Christmas" and the grocer maintained its yearly guidance. In the six weeks to January 4, which included the key festive period, it achieved retail like-for-like sales growth of 3.8% on-year. Sales growth picked up from the 2.8% achieved in the 13 weeks to November 22, the supermarket chain's third-quarter. For the combined 19 week period, like-for-like sales rose 3.1%. Total sales amounted to GBP23.94 billion over the 19 weeks, a rise of 3.3% on-year at actual rates, or 4.0% at constant currency.
"We invested to bring the best value, quality and service to everyone, no matter how or where they shopped with us. As a result, we delivered our biggest ever Christmas, with continued market share growth and switching gains," Chief Executive Ken Murphy said.
Tesco expects retail adjusted operating profit for the financial year of GBP2.9 billion, its guidance affirmed. It would represent a rise from GBP2.76 billion in financial 2024.
Marks & Spencer slumped 6.1%, the worst large-cap performer. Bullish sales in its Food arm contrasted with more modest gains in Clothing, Home & Beauty, and a decline in its International offering.
The retailer said total sales in the 13 weeks to December 28 rose 5.6% on-year to GBP4.06 billion. The loftiest growth came in its Food unit, where sales rose 8.7% to GBP2.58 billion. Clothing, Home & Beauty sales were up 1.0% to GBP1.31 billion.
CEO Stuart Machin said: "In Food, our focus on quality, innovation and trusted value translated into strong sales and market share growth, with M&S the top performing store-based grocery retailer over the period. 500 new lines were launched, and sales of new Christmas products grew 14%. Core category sales grew strongly as more customers ticked off their whole shopping list at M&S. There were a few growing pains as we delivered our biggest ever volumes, particularly in smaller stores, reaffirming the opportunity to accelerate transformation of the Food supply chain and go even faster on store renewal and rotation."
International sales during the period fell 2.8%, "largely driven by continued challenging market conditions in India", M&S said.
The firm added: "As we enter the new year, the outlook for economic growth, inflation and interest rates is uncertain and the business faces higher costs from well-documented increases in taxation. However there remain substantial opportunities and we are focused on what is within our control, as we reshape M&S for growth. Therefore, as indicated at the half year results in November, we are confident of making further progress in the remainder of the year."
Among the FTSE 250, baker Greggs lost 9.4%. It achieved sales growth for its full-year to December 28, and for the fourth-quarter alone, despite "more subdued high street footfall" towards the end of the year.
Looking to 2025, it expects "further cost inflation" from rising employment expenses but wage hikes "should provide support to consumers".
"Greggs has demonstrated its ability to mitigate cost inflation in recent years whilst retaining its value leadership, and we are confident we can continue to do so," the firm added.
B&M said sales rose in its third-quarter, but the retailer trimmed the top end of its profit outlook. The firm now expects annual adjusted earnings before interest, tax, depreciation and amortisation in the range of GBP620 million and GBP650 million, the top end of its outlook reduced from GBP660 million.
B&M declared a special dividend of 15.0 pence per share, equivalent to GBP151 million in total.
Shares fell 8.7%.
Away from festive trading updates, Ferrexpo rose 4.5%. The iron ore pellets producer said total commercial production improved 27% on-quarter for the fourth-quarter of 2024. For the whole of 2024, output surged 66% from 2023.
"In the challenging circumstances, it is pleasing to report a strong increase in production for 2024 - our best annual production performance since the start of the full-scale invasion in 2022. The entire Ferrexpo workforce has worked tirelessly to achieve this outcome, and I am grateful for their teamwork," Interim Executive Chair Lucio Genovese said.
"The group's ability to produce a variety of products and sell to a broader customer base have helped during the current environment. However, the continued effects of lower iron ore prices and higher input costs, put pressure on our margins during the fourth quarter. Due to further attacks on Ukraine's energy grid, we are still required to import at higher tariffs electricity from the EU."
Elsewhere in London, ImmuPharma shone on the AIM market, jumping 90%. The drug discovery and development company hailed "groundbreaking advancements" in preclinical research in the autoimmune diseases space.
"We are delighted to share these significant findings from ImmuPharma Biotech. This breakthrough research confirms our confidence in P140, its future therapeutic success and also creates potential new opportunities to strengthen our intellectual property portfolio, positioning us at the forefront of innovation in autoimmune disease therapies," CEO Tim McCarthy said.
The firm is "not at this time releasing detailed data" on the findings as they are part of an ongoing expansion of its intellectual property portfolio. However, it did say the findings pave the way for "earlier and more accurate diagnostics" and make it easier to spot patients who are more likely to respond to the P140 treatment. The findings also suggest improved monitoring of treatment response.
The pound faded to USD1.2286 early Thursday, from USD1.2351. Sterling fell as low as USD1.2239 on Thursday, its worst level since November 2023. The euro was largely unmoved at USD1.0301 from USD1.0303. Against the yen, the dollar fell to JPY158.12 from JPY158.37.
Brent fetched USD76.07 a barrel, falling from USD76.25. Gold was flat at USD2,665.21 an ounce, from USD2,665.55.
"The UK government finds itself in choppy fiscal waters again. Although gilt yields rising recently has generally been a function of correlation with other markets, it felt a bit different yesterday, especially with the exchange rate trading so poorly simultaneously," analysts at Lloyds Bank commented.
"At current yield levels it is now very hard to argue against the idea that the headroom has been more than used up. It is natural therefore that the issue is what approach the government would take to re-establish headroom should it be needed come 26 March. It is a choice between further tax increases, or cutting spending. More clarity on this in the short-term could go some way to calming the situation, but there are no easy choices. Spending cuts will be politically damaging and tax increases will only further underpin fears of economic slowdown which are partly responsible for the projected lack of headroom in any case."
In New York on Wednesday, the Dow Jones Industrial Average added 0.3%, the S&P 500 rose 0.2% and the Nasdaq Composite lost 0.1%.
Federal Reserve officials said the path for interest rates was uncertain in the year ahead, reflecting concerns about inflation and changes to trade policy, minutes from December's Federal Open Market Committee meeting on Wednesday showed.
"Almost all participants judged that upside risks to the inflation outlook had increased," the minutes said. "As reasons for this judgment, participants cited recent stronger-than-expected readings on inflation and the likely effects of potential changes in trade and immigration policy."
But the current "high degree of uncertainty" made it appropriate for the FOMC to take a "gradual" approach as it moved toward a neutral policy stance.
In China on Thursday, the Shanghai Composite was down 0.6%. The Hang Seng Index in Hong Kong down 0.2%.
China narrowly avoided slipping into deflation in December with prices rising at their slowest pace in nine months, official figures showed Thursday, as Beijing struggles to kickstart consumer activity in the world's number two economy.
The tepid reading comes after the government unveiled a range of measures at the end of last year aimed at boosting consumption as well as providing support for the troubled property sector, including interest rate cuts.
However, data showed that has not yet filtered through, with the consumer price index, a key measure of inflation, easing to growth of 0.1% on-year last month, from 0.2% in November, according to the National Bureau of Statistics. The reading is the lowest since March. A survey of economists had forecast 0.1%.
In Tokyo on Thursday, the Nikkei 225 was down 0.9%. Over in Sydney, the S&P/ASX 200 fell 0.2%.
Still to come on Thursday is a eurozone retail sales reading at 1000 GMT.
By Eric Cunha, Alliance News news editor
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