Blue chip stocks were up a bit in London, Paris and Frankfurt at Tuesday midday, with banks and defence stocks in the UK enjoying a boost.
The UK’s aviation regulator has noted the ‘benefits to consumers’ of England’s Gatwick airport expanding. The Civil Aviation Authority, CAA, made the comments as it announced support for the West Sussex airport’s proposed new commitments over the next four years.
Transport Secretary Heidi Alexander has a deadline of Thursday for her decision on whether to approve Gatwick’s plan to bring its emergency runway into routine use. This would enable the airport to be used for 100,000 more flights per year.
The FTSE 100 index was up 32.53 points, 0.4%, at 8,691.51. The FTSE 250 was up 28.85 points, 0.1%, at 20,513.24, and the AIM All-Share was up 0.14 points at 711.02.
The Cboe UK 100 was up 0.5% at 870.26, the Cboe UK 250 was up 0.3% at 17863.37, and the Cboe Small Companies was up 1.0% at 15,965.31.
‘The FTSE 100 made a reasonable start to trading on Tuesday despite a late slump on Wall Street and selling across Asia,’ AJ Bell’s Russ Mould commented. ‘Suggestions the Trump administration would toughen existing restrictions on exporting semiconductors to China and hints tariffs on Canada and Mexico, initially delayed, were still coming down the track hit sentiment.
‘Banks and defence stocks helped keep the UK’s flagship index afloat while the miners largely fell, with the sector’s exposure to a volatile Chinese economy partly responsible for the weakness.’
At midday HSBC and NatWest were among the FTSE 100’s biggest winners, gaining 2.5% and 2.2% respectively.
HSBC on Tuesday said it will issue 6.950% perpetual subordinated contingent convertible securities worth $1.5 billion.
Meanwhile, broker Jefferies raised its price target for NatWest to 520 pence from 460p. Kepler Cheuvreux raised its target to 510p from 390p.
Smith & Nephew continued to lead, up 4.1% after it said pretax profit leapt 72% to $498 million in 2024, while revenue rose 4.7% to $5.81 billion. Orthopaedics’ overall growth of 6.0% in the fourth quarter was ahead of the 4.9% market consensus.
Looking ahead, S&N expects 2025 underlying revenue growth to be around 5%, with reported growth of around 4.8%.
‘There is much more to be done, but we have made solid progress fixing the foundations and expect a step-up in returns in 2025, including significant margin expansion,’ Chief Executive Deepak Nath said.
Unilever remained among the laggers, down 1.6% after the unexpected departure of Chief Executive Officer Hein Schumacher. He will be replaced by Chief Financial Officer Fernando Fernandez.
Analysts were left confused by the news, with Mould commenting: ‘Schumacher has breathed new life into the business, making it run more efficiently and focusing on what the company does best. Under normal circumstances, the progress so far would be applauded. That makes his departure all the more mysterious. It suggests disagreements behind closed doors with colleagues and/or shareholders.’
He added: ‘A clue might be found in the comments from Unilever Chair Ian Meakins who said Schumacher’s replacement, Fernando Fernandez, has the ability to ’drive change at speed’ and that the board has confidence in him realising the benefits of a growth plan ’with urgency’. That implies the board might have viewed Schumacher’s progress as being too pedestrian.’
Lion Finance continued to lead the FTSE 250, up 8.1% following the release of its annual results with pretax profit and net interest income rising.
The Tbilisi-based lender declared a final ₾5.62 per share final dividend for 2024, up 14% from ₾4.94 in 2023 and increasing the total payout by 13%. It also announced a ₾107.7 million extension to its share buyback programme.
CMC Markets was the biggest loser, down 4.0% following the resignation of CFO Albert Soleiman.
Among small caps, McBride gained 4.6%.
The Manchester, England-based private label products maker reported £471.4 million in half-year revenue, up 0.7% on-year, while pretax profit rose 8.3% to £25.7 million.
On AIM, Bezant lost 6.4%.
The copper and gold exploration company has agreed to sell Puna Metals, which owns the Eureka project in northern Argentina, to special purpose acquisition company Ajax Resources. (Ajax shares are temporarily suspended.)
Bezant will receive an initial $120,000 cash payment followed by deferred consideration of an additional $100,000 in new Ajax shares.
In European equities on Tuesday, the CAC 40 in Paris was up 2.29 points, while the DAX 40 in Frankfurt was up 0.1%.
Germany’s government deficit ticked upward in 2024, but still remains well under the EU’s limits, according to preliminary figures released by Germany’s Federal Statistical Office.
The deficit - the difference between what all levels of German government spent compared to what was collected in revenues from taxes, tariffs and other sources - was €118.8 billion in 2024, which is €15 billion higher than in 2023, according to the agency’s figures.
Measured against Germany’s gross domestic product, which shrank slightly in both 2023 and 2024, the country’s deficit ratio was 2.8% in 2024, up from 2.5% in the previous year.
The pound was quoted at $1.2634 at midday on Tuesday in London, flat against its price at the equities close on Monday. The euro stood at $1.0480, higher against $1.0471. Against the yen, the dollar was trading higher at JP¥149.91 compared to JP¥149.64.
Stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.2%, the S&P 500 index down 0.3%, and the Nasdaq Composite down 0.5%.
Brent oil was quoted lower at $74.18 a barrel at midday in London on Tuesday from $74.85 late Monday.
‘The outlook for crude prices remains skewed to the downside, with uncertainty over future oil demand as the threat of US tariffs casts a long shadow over global economic growth,’ commented ActiveTrades analyst Ricardo Evangelista. ‘At the same time, ongoing negotiations for a peace deal between Ukraine and Russia could lead to an easing of sanctions on Russian oil exports, increasing supply—a scenario that would further weigh on oil prices.’
Gold was quoted at $2,939.97 an ounce, lower against $2,942.87.
Still to come on Tuesday’s economic calendar are the various US releases including consumer confidence, the S&P/Case-Shiller home price index and the Richmond Fed manufacturing index.
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