24th Feb 2025 09:03
(Alliance News) - Stock prices in London opened mostly flat on Monday, while across the channel Germany's election results have sparked uncertainty but also hopes of economic stimulus.
The FTSE 100 index opened down 2.07 points at 8,657.30. The FTSE 250 was up 3.54 points at 20,617.43, and the AIM All-Share was down 0.70 points, 0.1%, at 717.32.
The Cboe UK 100 was down at 866.71, the Cboe UK 250 was up 0.1% at 17,953.12, and the Cboe Small Companies was down at 15,837.65.
GSK was the third-biggest FTSE 100 winner, jumping 2.0%.
The pharmaceutical firm said it has completed the acquisition of Boston, Massachusetts-based precision therapeutics firm IDRx Inc, adding to its growing portfolio of treatments for gastrointestinal cancers.
It also announced the start of the GBP2 billion buyback programme that it announced earlier this month, starting with an initial GBP700 million tranche.
XPS Pensions was among the FTSE 250 winners, gaining 1.5%.
The pensions consulting and administration firm has agreed to acquire Polaris Actuaries & Consultants, expecting the deal to conclude on Friday.
It said cash consideration for the deal totals GBP23.4 million, with further contingent consideration of up to GBP35.0 million to follow over the next three years.
Among smaller caps, EnergyPathways soared 40%.
The energy infrastructure project company announced progress on its MESH energy storage project, having signed a non-binding memorandum of understanding with a clean energy fund for a cornerstone equity financing, "effectively minimising shareholder dilution".
The MoU funding provides capital for MESH's growth plans in gas storage, hydrogen and decarbonised gas power generation, EnergyPathways said, and "provides further demonstration to the [UK] government of MESH's ability to attract private capital to the UK energy transition".
In European equities on Monday, the CAC 40 in Paris was down 0.6%, while the DAX 40 in Frankfurt was up 0.1%.
"A dose of more certainty has been injected into European politics, with Germany's Conservatives winning the elections," commented Hargreaves Lansdown's Susannah Streeter. "It comes at a crucial time for the continent...There is a dawning realisation that European nations will have to pull together and present a more united deterrent force, and Friedrich Merz, the CDU leader, is reading from that script.
"He has pledged to relax fiscal rules, to increase defence spending and inject the economy with much needed investment. But while Merz seems determined to ease off the so-called debt brake, which limits annual borrowing to 0.35% of GDP, it won't be straightforward, because he will need a two-third majority in parliament.
"However, with Russia's aggression set to stay an unrelenting black cloud, the recognition of the need to contribute more to NATO's budget may see political factions pull together."
She added: "The hope that the Conservatives' win might help pull Germany out of economic stupor and help bolster collective defence, has lifted investor spirits...the euro is at four-week highs."
The euro stood higher at USD1.0482 early on Monday, against USD1.0450 at the equities close on Friday.
Meanwhile Swissquote's Ipek Ozkardeskaya noted that Germany's election "didn't bring major surprises...The kneejerk reaction is a swift rebound of the euro and the equity futures on hope of higher spending by the new German government would tackle the economic weakness of past years."
She continued: "Trend and momentum indicators are positive for the European stocks that have been performing beautifully since the start of this year on the convergence trade, also supported by encouraging earnings, a more supportive European Central Bank stance than the Federal Reserve's and also on thinking that the global easing in financial conditions would benefit to the European cyclical stocks."
The pound was quoted flat at USD1.2642 early on Monday in London, compared to USD1.2641 on Friday. Against the yen, the dollar was trading lower at JPY149.37 compared to JPY149.45.
In Asia on Monday, Japanese markets were closed to mark the emperor's birthday. In China, the Shanghai Composite was down 0.2%, while the Hang Seng index in Hong Kong was down 0.5%. The S&P/ASX 200 in Sydney closed up 0.1%.
In the US on Friday, Wall Street ended lower, with the Dow Jones Industrial Average down 1.7%, the S&P 500 down 1.7% and the Nasdaq Composite down 2.2%.
Ozkardeskaya commented: "Across the Atlantic, things were looking pretty bad last Friday. The US stocks were hit by an ugly selloff on weaker-than-expected economic data and exploding inflation expectations...on prospects of massive tariffs from Trump government and worsening trade relations with the rest of the world...Small and mid-cap indices were hit heavier: the S&P400 for example tanked nearly 2.40% and is down by almost 10% since the November peak while the small caps tumbled nearly 3% and are down by more than 10% since the November peak – meaning that they are now in the correction territory – as the Trump optimism is being eaten by the tariffs and explodes costs (and cost expectations) to an extent that small businesses could hardly afford.
"And the Fed is no longer looking like it could continue to lower interest rates as inflation expectations are exploding. So yes, the aggressiveness of Trump's America First policies could backfire."
Brent oil was quoted lower at USD74.33 a barrel early in London on Monday from USD74.89 late Friday.
Gold was quoted higher at USD2,940.73 an ounce against USD2,935.51.
Still to come on Monday's economic calendar, the eurozone has consumer price inflation while the US has Chicago Fed national activity and the Dallas Fed manufacturing indices.
By Emma Curzon, Alliance News reporter
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