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(Alliance News) - Stocks in London were mixed around midday on Thursday with rising commodity prices boosting gold miners and oil majors, helping to offset falls for banks and airlines.
The FTSE 100 index traded up 9.94 points, 0.1%, at 8,182.96. The FTSE 250 was down 78.07 points, 0.4%, at 20,544.54, and the AIM All-Share was up 2.45 points, 0.3%, at 722.08.
The Cboe UK 100 was up 0.2% at 820.39, the Cboe UK 250 was down 0.4% at 17,988.12, and the Cboe Small Companies rose 0.3% at 15,965.57.
On London's FTSE 100, gold miners Fresnillo and Endeavour Mining rose 2.6% and 2.1% respectively after fresh gains in the price of the yellow metal.
Gold traded at USD2,641.38 an ounce on Thursday lunchtime, rising from USD2,619.91 at the time of the London close on Tuesday.
Oil majors BP and Shell climbed 1.2% and 1.0% respectively, tracking a rise in the Brent price.
A barrel of Brent oil climbed to USD75.61 midday Thursday from USD74.21 on Tuesday.
But the rising oil price saw airlines trade in the red with British Airways owner IAG, down 2.4%, and budget airline easyJet losing 1.7%.
Also heading lower were banks with Barclays down 1.8% and NatWest losing 1.2%. Weak Asian markets on the back of disappointing data from China saw HSBC and Standard Chartered 1.6% and 1.5% lower.
Marks & Spencer rose 1.6% on speculation the retailer has enjoyed a strong Christmas.
Russ Mould, investment director at AJ Bell, said: "Judging by its share price jump, investors are putting their money on Marks & Spencer to have cleaned up over the festive season. There were already reports pre-Christmas that shoppers were loading up their baskets with Marks & Spencer’s premium-quality food and drink products, and its clothes were such a big hit with the nation during 2024 that it seems logical to suggest many people gifted them on 25 December."
Investors also weighed data showing the UK manufacturing sector downturn deepened more sharply than expected in December, with the fastest rate of decline since last January.
According to S&P Global, the UK manufacturing purchasing managers' index fell to an 11-month low of 47.0 in December, from 48.0 in November. The final reading was below the flash estimate of 47.3 points.
Survey respondents pointed to depressed market confidence and restructuring in response to upcoming increases to the minimum wage and employers' national insurance contributions.
But Elliott Jordan-Doak at Pantheon Macroeconomics struck an optimistic note.
"Despite the weakness in the manufacturing PMI in December, we think that it will steadily improve in 2025. Businesses have been rocked by domestic policy changes in the form of NICs hikes, and external shocks in the form of the threat of a global trade war. But, the budgetary plans are for more spending than taxation, which will mechanically lift the PMI. What’s more the focus on investment in the budget should help the manufacturing sector. The [Monetary Policy Committee] will also cut rates in 2025, which will reduce borrowing costs for firms and should boost sentiment. We expect three cuts in 2025, one more than the market is currently priced for."
The picture was no brighter in Europe where a report showed the eurozone manufacturing sector remained in decline.
The Hamburg Commercial Bank purchasing managers' index fell to 45.1 points in December, from 45.2 in November. The latest figure was further below the 50-point neutral mark and was a three-month low.
"The year was closed off with accelerated contractions in both new orders and output, while sharp reductions were made to purchasing activity and inventories of inputs. Factory employment levels also continued on a downward trend, but there was a modest improvement in business confidence as growth expectations hit a four-month high," S&P Global said.
In Europe, the CAC 40 in Paris was down 1.2%, and the DAX 40 in Frankfurt was 0.3% lower.
In contrast, markets in New York are expected to start the New Year on the front foot. The Dow Jones Industrial Average is called up 0.5%, the S&P 500 up 0.6% and Nasdaq Composite up 0.8%.
The pound was quoted at USD1.2443 at Thursday lunchtime, down from USD1.2535 at the time of the London equities close on Tuesday. The euro was lower at USD1.0323 from USD1.0402. Against the yen, the dollar rose to JPY157.20 from JPY156.74.
Back in the UK, annual UK house price growth accelerated last month, in a strong end to the year, according to figures from Nationwide.
House prices rose 4.7% on-year in December, picking up speed from a 3.7% rise in November. On-month, prices rose 0.7% in December, after a 1.2% rise in November from October.
"Mortgage market activity and house prices proved surprisingly resilient in 2024 given the ongoing affordability challenges facing potential buyers. At the start of the year, house prices remained high relative to average earnings, which meant that the deposit hurdle remained high for prospective first-time buyers. This is a challenge that had been made worse by record rates of rental growth in recent years, which has hampered the ability of many in the private rented sector to save," Nationwide analyst Robert Gardner said.
Housebuilders gave a muted response to the data. Barratt Redrow eased 0.6% but Taylor Wimpey rose 0.1%.
On a quiet day for company news, Revolution Beauty shot up 33%, after a claim by Chrysalis Investments was settled. Chrysalis traded down 1.6%.
Chrysalis, a former shareholder in the beauty products seller, said Revolution will pay "a non-material sum". The figure is less than 1% of the Chrysalis market capitalisation of around GBP613.3 million at the time of Tuesday's close in London.
Analysts at Panmure Liberum said: "We think this removes a significant risk [for Revolution] that had previously stopped potential new investors in the shares. With Chrysalis being one of the biggest investors in Revolution Beauty at the time of IPO, we believe this outcome draws a line in the sand for any similar claims as they are unlikely to be worthwhile. While there is still an on-going FCA investigation, the settlement with Chrysalis makes the investment case much simpler at a time when the business is turning a corner."
Elsewhere, shares in Poolbeg Pharma slumped 35% after it said it was in talks regarding an all-share combination with US-listed biopharmaceutical company Hookipa Pharma.
Under the proposed terms, shareholders in the London-based clinical stage biopharmaceutical firm would receive 0.03 Hookipa shares for each Poolbeg share. This would leave Poolbeg with 55% of the enlarged company with co-founder Cathal Friel becoming executive chair.
Hookipa plans a USD30 million fundraise on completion of the deal. This would dilute Poolbeg's stake in the combined firm to just over 40%, with Hookipa holding around 33% and new investors about 27%.
Poolbeg is expected to become a private subsidiary of Hookipa and apply for the cancellation of its shares to trading on AIM. Hookipa, which is based in New York and Austria, intends to retain its listing on Nasdaq.
Emmerson jumped 27% after it signed a deal with a specialist litigation funding firm to secure USD11.0 million in financing. The funding will go towards a dispute with the government of Morocco.
The dispute, the Morocco-focused potash development company explained in November, arose from "various breaches" to the bilateral investment treaty signed in 1990 between the UK and Morocco for the promotion and protection of investments, which came into force in 2002.
Still to come, US initial jobless claims data at 1330 GMT and US manufacturing PMI figures at 1445 GMT.
By Jeremy Cutler, Alliance News reporter
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