6th Feb 2025 08:34
(Alliance News) - Stock prices in London opened higher on Thursday, with the absence of new tariff salvos boosting risk appetite, while the pound faded from the USD1.25 mark before a Bank of England decision.
The FTSE 100 index added 67.85 points, 0.8%, at 8,691.14. The FTSE 250 rose 99.21 points, 0.5%, at 20,862.09. The AIM All-Share rose 1.51 points, 0.2%, at 717.17.
The Cboe UK 100 was up 0.9% at 870.14, the Cboe UK 250 rose 0.4% to 18,202.86, and the Cboe Small Companies was flat at 15,545.47.
In Frankfurt, the DAX 40 was 0.6% higher, while the CAC 40 added 0.3%.
In New York on Wednesday, the Dow Jones Industrial Average added 0.7%, the S&P 500 rose 0.4% and the Nasdaq Composite climbed 0.2%.
The Shanghai Composite in China rose 1.3% on Thursday, while the Hang Seng Index in Hong Kong added 1.4%. In Tokyo, the Nikkei 225 climbed 0.6%, while the S&P/ASX 200 in Sydney shot up 1.2%.
Against the dollar, the pound faded to USD1.2484 on Thursday morning, from USD1.2513 late Wednesday. The euro slipped to USD1.0388 from USD1.0414. Against the yen, the greenback climbed to JPY152.53 from JPY152.33.
"The dollar remains in corrective mode on the back of this week's tariff news and the drop in 10-year US yields. Tomorrow's US jobs data will have a big say in whether this correction needs to go further," analysts at ING commented. "The DXY dollar index is roughly 2% off its recent highs and the question for investors is whether a further 1-2% is required. Driving this correction have been several factors, the largest of which has probably been this week's tariff news, where it looks like the Trump administration has been using tariffs for transactional not ideological purposes."
Analysts at the Dutch bank said that while tariff news has kept the euro in check in recent weeks, the pound has been less hit and has mounted a recovery after struggling amid bond market turmoil last month.
Eyes now turn to how sterling moves following the BoE decision at midday.
ING continued: "The Bank Of England's trade-weighted sterling index has rallied 1.7% since the middle of January. The recovery from the gilt-triggered January sell-off has undoubtedly been helped by the rally in US Treasuries. Additionally, the recent focus on tariffs has been a EUR/GBP negative, with the UK less exposed and the UK perhaps even being granted a tariff exemption from the Trump administration – if this week's comments are to be believed.
"We expect an 8-1 vote to cut rates and a downward revision to growth forecasts to be a mild sterling negative. Much more negative would be a 9-0 vote, should arch-hawk Catherine Mann vote for a rate cut. We continue to favour GBP/USD topping out this quarter in the 1.25/26 area and see a strong case for it to be trading close to 1.19/20 later this year."
The BoE decision is accompanied by economic forecasts in the monetary policy report. There is also a press conference with Governor Andrew Bailey around 1230 GMT.
Brent oil was quoted at USD74.78 a barrel early Thursday, rising from USD74.64 at the time of the London equities close on Wednesday. Gold was quoted at USD2,849.92 an ounce, slipping from USD2,870.03. Gold hit a record high above USD2,882 an ounce on Wednesday.
In London, BBGI Global Infrastructure agreed to a GBP1.06 billion takeover from a vehicle indirectly controlled by British Columbia Investment Management. The stock rose 19%.
The infrastructure investor will be acquired at 147.5 pence per share in cash, a 21% premium to its 121.8p closing price on Wednesday.
BBGI Global CEO Duncan Ball said: "Although both the BBGI supervisory board and the BBGI management board are confident that BBGI can continue to deliver sustainable cash flows to BBGI shareholders, the offer from BCI represents a premium to undisturbed share price and to net asset value, and provides BBGI Shareholders with the opportunity to realise the value of their holdings in cash, at an attractive value in excess of the reasonable medium term prospects for BBGI on a standalone basis."
BBGI was the best mid-cap performer. Babcock was the next best, adding 10%. It upped its annual outlook, as a strong half-year performance continued in the third-quarter.
The provider of technical and engineering support services to defence and civil sectors said its outturn in January was "also encouraging", according to a preliminary analysis.
For the year ending March 31, it now expects GBP4.9 billion of revenue, "with the expected overperformance due to double-digit organic growth in Nuclear and strong growth in Marine".
The revenue forecast sits ahead of the Vuma compiled average analyst forecast of GBP4.67 billion.
AstraZeneca and Anglo American were among the pick of the large caps, rising 3.2% and 3.4%.
AstraZeneca reported growth in annual earnings, with the drugmaker's Oncology offering helping lead the charge, and the new year could be a key one with a number of trials hitting the latter stages.
"Our company delivered a very strong performance in 2024 with total revenue and core EPS up 21% and 19% respectively. We also delivered nine positive high value phase III studies in the year, which coupled with increasing demand for our medicines in all key regions, will help sustain our growth momentum into 2025," Chief Executive Officer Pascal Soriot commented.
"This year marks the beginning of an unprecedented, catalyst-rich period for our company, an important step on our Ambition 2030 journey to deliver USD80 billion total revenue by the end of the decade. In 2025 alone, we anticipate the first phase III data for seven new medicines, along with several important new indication opportunities for our existing medicines."
Miner Anglo American said all its businesses "delivered their full year production guidance". It hailed a "solid operational performance in the fourth quarter".
"Our focus on operational excellence is bringing far greater efficiency, underpinning our solid production performance in 2024. We are simplifying our portfolio at pace to focus on copper, premium iron ore and crop nutrients, offering a highly attractive and differentiated investment proposition with a structurally lower cost base. This higher margin and more cash generative Anglo American will offer greater resilience through the cycle and possesses outstanding value-accretive growth optionality in each of our businesses," CEO Duncan Wanblad said.
Anglo American went into Thursday with a slight year-to-date share price fall, though it is now up for 2025 so far. BHP put its plan to buy Anglo on ice, the Financial Times reported in January.
Anglo American shares declined 6.2% on January 27, the first trading day following that report.
Trade war worries between the US and China also kept a lid on mining stocks recently. Anglo had fallen every day this week prior to Thursday. China is a major buyer of minerals, so an absence of fresh trade war barbs boosted miners on Thursday.
Antofagasta rose 2.8%, Glencore added 1.9% and Rio Tinto advanced 1.8%. BHP also rose 1.8%.
Elsewhere in London, colour cosmetics supplier Warpaint lost 4.1%. It said it expects revenue and profit growth for 2024, despite "ongoing consumer spending headwinds".
Revenue is expected to rise around 14% to GBP102 million from GBP89.6 million. Pretax profit growth of a third to GBP24 million from GBP18.1 million is expected.
"I am pleased with the group's performance in 2024 and the strong start to 2025, despite ongoing consumer spending headwinds. It was also pleasing that improved margins were maintained throughout the year. We expect to see continued growth across the group in 2025 and we look forward to completing the acquisition of Brand Architekts later this month and integrating the business into the group," CEO Sam Bazini said.
Still to come on Thursday is a UK construction purchasing managers' index reading at 0930 GMT, before US jobless claims data at 1330.
By Eric Cunha, Alliance News news editor
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