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London open: Gains modest but stocks rise to seven-month high
UK stocks edged higher to a seven-month high on Friday morning, though gains were likely to be limited in a shortened trading session ahead of the New Year’s break.
London’s FTSE 100 was up 0.13% at 7,732.50 after nearly an hour’s trade; the index hasn’t closed higher than this level since 23 May.
Markets across Europe were putting in gains in morning trade, with the Stoxx 600 index up 0.25% by 0900 GMT. Markets in the UK will close early at 1230 GMT; Germany’s DAX and Austria’s Wiener Börse will also be doing a half-day; while all major markets across Europe and the US remain open as usual.
Leading the risers on the FTSE 100 were three stocks heavily exposed to China – fashion giant Burberry, insurance group Prudential and emerging markets-focused bank Standard Chartered – after the country’s central bank vowed to boost consumer prices amid rising deflation risks.
In a statement released late on Thursday, the People’s Bank of China said it would “promote price recovery from low levels and keep prices at reasonable levels”. However, it did not include any specific details regarding its plans.
Company news was thin on the ground again in London, as regulatory filings remain sparse between the Christmas and New Year’s public holidays. The only notable announcements came from small caps Duke Royalty and Saietta Group.
Duke Royalty said in an update that it expected recurring cash revenue of £6.3m in its third quarter, representing a 12% increase year-on-year. It also announced an investment of CAD 8.6m (£5.1m) into its existing partner Creō-Tech Industrial Group, bringing its total exposure to CAD 27.1m, with the investment intended for refinancing.
Saietta Group reported first-half group income of £1.4m, alongside a gross profit of £0.1m with a gross margin of 9%, and a loss from continuing operations of £7.9m before tax. Operational achievements included securing significant orders from AYRO and restructuring agreements with ConMet, while developments since the half-year ended included securing a substantial order for its RFT eDrive system in India and raising £7.14m to support growth.
In economic news, UK house prices fell by a higher-than-expected 1.8% year on year in December, mortgage lender Nationwide said on Friday. Expectations were for a 1.4% fall. Prices remained flat on a monthly basis.
“Housing market activity was weak throughout 2023,” said Nationwide chief economist Robert Gardner. “The total number of transactions has been running at (about) 10% below pre-pandemic levels over the past six months, with those involving a mortgage down even more (about 20%), reflecting the impact of higher borrowing costs,” he added.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Anglo American Plc | +1.02% | +20.20 | 2,005.00 |
| 2 |  |
Imperial Brands Plc | +0.83% | +15.00 | 1,813.00 |
| 3 |  |
Ashtead Group Plc | +0.70% | +38.00 | 5,488.00 |
| 4 |  |
Standard Chartered Plc | +0.64% | +4.20 | 659.40 |
| 5 |  |
Prudential Plc | +0.64% | +5.60 | 883.80 |
| 6 |  |
Burberry Group Plc | +0.60% | +8.50 | 1,420.00 |
| 7 |  |
Pearson Plc | +0.60% | +5.80 | 970.60 |
| 8 |  |
Vodafone Group Plc | +0.59% | +0.40 | 68.71 |
| 9 |  |
Glencore Plc | +0.57% | +2.70 | 472.75 |
| 10 |  |
Dcc Plc | +0.56% | +32.00 | 5,786.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Direct Line Insurance Group Plc | -0.73% | -1.35 | 182.50 |
| 2 |  |
Schroders Plc | -0.62% | -2.70 | 433.90 |
| 3 |  |
British Land Company Plc | -0.59% | -2.40 | 403.40 |
| 4 |  |
Easyjet Plc | -0.59% | -3.00 | 507.40 |
| 5 |  |
Antofagasta Plc | -0.59% | -10.00 | 1,697.50 |
| 6 |  |
Tui Ag | -0.48% | -3.00 | 617.50 |
| 7 |  |
Land Securities Group Plc | -0.45% | -3.20 | 713.20 |
| 8 |  |
Segro Plc | -0.45% | -4.00 | 893.20 |
| 9 |  |
Fresnillo Plc | -0.41% | -2.40 | 587.80 |
| 10 |  |
Melrose Industries Plc | -0.39% | -2.20 | 568.40 |
US close: S&P 500 continues to hover near all-time high
Wall Street stocks turned in a mixed showing in the penultimate session of the year, while the S&P 500 continued to hover near its all-time high.
At the close, the Dow Jones Industrial Average was up 0.14% at 37,710.10 and the S&P 500 advanced 0.04% to 4,783.35, while the Nasdaq Composite saw out the session 0.03% weaker at 15,095.14.
The Dow closed 53.58 points higher on Thursday as the blue-chip index stretched its Santa Clause rally another session.
Despite the Nasdaq’s modest losses, all three major indices were on track to deliver their ninth winning week in a row as a result of a late-year rally and a bounce back from a disappointing third quarter for stocks.
On the macro front, Americans lined up for unemployment benefits at an accelerated clip in the week ended 23 December, suggesting some softening in the labour market toward the end of the year. According to the Labor Department, initial jobless claims rose by 12,000 to 218,000 last week, above consensus expectations of 210,000. Continuing claims increased by 14,000 in the second week of December to a one-month high of 1.87m, meeting market expectations, while the four-week moving average, which aims to strip out week-to-week volatility, dropped by 12,500 to 1.86m.
Elsewhere, US pending home sales fell in November as all four US regions registered year-on-year declines in transactions. According to the National Association of Realtors, pending home sales fell 5.2% month-on-month, following a revised 8.2% drop in October to hold near record lows.
On another note, wholesale inventories fell by 0.2% month-on-month in November, according to preliminary estimates from the Census Bureau, following a 0.4% slump in the prior month.
Finally, the US trade deficit in goods widened to $90.3bn in November, up from a revised reading of $89.6bn in the previous month, according to an advance estimate from the Census Bureau. Exports declined by 3.6% to $165.1bn, while imports dropped by 2.1% to $255.4bn.
No major corporate earnings were released on Thursday.
Friday newspaper round-up: Whitehall pay squeeze, rail delays, Donald Trump, short sellers, NI cuts
Civil servants are being overpromoted to get round a Whitehall pay squeeze, analysis suggests. “Grade inflation” in Whitehall is costing £1.5 billion a year and resulting in less-qualified staff doing senior jobs, the Institute for Government has warned. At the same time, permanent secretaries and other top officials who cannot be promoted are experiencing much bigger pay cuts that are driving talented people to the private sector, the think tank warns. – The Times
New Year’s Eve revellers are being encouraged to travel as early as Friday to avoid missing festivities as rail chaos continues across the country. Operators were urged to “come clean” over which services were likely to be cancelled this weekend after a second day of major disruption. Journeys across the country were disrupted again on Thursday in the aftermath of Storm Gerrit as rail lines were closed because of flooding and fallen trees. – Telegraph
Maine has blocked Donald Trump from its presidential primary ballot, becoming the second state to bar the former president from running, under a constitutional provision that prevents insurrectionists from holding office. On 19 December, a decision made by Colorado’s supreme court removed Trump from that state’s primary ballot, citing the same constitutional clause and setting up a legal showdown at the US supreme court. – Guardian
Hedge funds are poised to profit from any weak post-Christmas retail trading updates, with investors holding large short positions in some of the biggest chains. Retailers remain among the most heavily shorted stocks on the London Stock Exchange amid signs that the cost of living squeeze and mild autumn have hit consumer spending. – The Times
The bottom half of earners will lose any gains from next week’s lowering of national insurance payments when their income tax bills go up in April, a leading think tank has warned. The Resolution Foundation said the combined effect of a cut in national insurance contributions (Nics) from 6 January and a freeze on income tax thresholds – pulling more people into paying higher rates as their wages rise – would only favour the top half of earners with incomes of £26,000 or more. – Telegraph
