Stocks in London trod water at the start of a week, though moves were more pronounced in Asia and Paris.
The CAC 40 in Paris has French political uncertainty and a plunge in Stellantis shares hanging over it. Asian stocks climbed after decent China data.
The FTSE 100 index fell just 1.40 points to 8,285.90. It goes into the final month of 2024 with a roughly 7% year-to-date gain.
The FTSE 250 nudged up just 9.21 points at 20,780.78, and the AIM All-Share added 0.50 of a point, 0.1%, at 732.99.
The Cboe UK 100 was flat at 832.52, the Cboe UK 250 added 0.1% at 18,288.05, and the Cboe Small Companies rose 0.5% at 15,905.84.
The CAC 40 in Paris was down 0.9%, and the DAX 40 in Frankfurt slipped 0.2%.
In an abbreviated New York trading day on Friday, the Dow Jones Industrial Average added 0.4%, the S&P 500 climbed 0.6% and the Nasdaq Composite rose 0.8%.
In China on Monday, the Shanghai Composite added 1.1%. The Hang Seng Index in Hong Kong was 0.7% higher. In Tokyo, the Nikkei 225 rose 0.8%, while the S&P/ASX 200 in Sydney climbed 0.1%.
Asian equities perked up after robust China data.
Chinese manufacturing activity accelerated at the fastest rate since June in November, S&P Global data showed Monday.
The headline seasonally adjusted purchasing managers’ index improved to 51.5 in November from 50.3 it October.
Growing further beyond the neutral 50-points mark separating growth from contraction, it indicates the pace of growth sped up. It was the fastest rate of growth since June.
Still to come on Monday are a slew of manufacturing PMI readings, including the eurozone at 0900 GMT, the UK at 0930 and a pair from the US at 1445 and 1500.
Focus later this week will be on the US jobs market, where there is a number of readings culminating with Friday’s nonfarm payrolls.
‘A much busier week in terms of US data will have a major say in whether the Fed cuts rates by 25bp on 18 December. US data poses some downside risks to the dollar, but the continued and expanding threat of tariffs from the incoming Trump administration should limit the size of the correction,’ analysts at ING commented.
The pound was quoted at $1.2687 early Monday in London, down from $1.2697 at the time of the closing bell in London on Friday. The euro stood at $1.0502, fading from $1.0579. Against the yen, the dollar was trading at JP¥150.30, down from JP¥150.43.
President-elect Donald Trump on Monday threatened to impose a 100% tariff on the BRICS group nations if they undercut the US dollar.
‘We require a commitment... that they will neither create a new Brics currency, nor back any other currency to replace the mighty US dollar or, they will face 100% tariffs,’ Trump wrote on his Truth Social website, referring to the grouping that includes Brazil, Russia, India, China, South Africa and others.
The statement comes after a Brics summit held last month in Kazan, Russia, where the countries discussed boosting non-dollar transactions and strengthening local currencies.
In Europe, eyes are on political uncertainty in France, while on the corporate front, Fiat owner Stellantis is in focus.
‘At the start of this week, the focus is likely to be on France. On Sunday, Marine Le Pen said that her party’s talks with the government led by Michel Barnier, had broken down, which paves the way for a no-confidence vote in the technocratic government that has no majority in Parliament. The no-confidence vote could come as early as Wednesday. If Barnier loses this vote, and at this stage it is very hard to see how he could win the vote, then European political woes could be front and centre as we move towards 2025,’ XTB analyst Kathleen Brooks commented.
‘An election is expected to take place in Germany in February, however there cannot be another election in France until July next year, which opens the door to months of political struggle and inertia as the country tries to deal with its budget deficit, which is more than 6% of GDP.’
The analyst continued: ‘French bond yields are higher than Spain and Portugal’s yields, and they rose above Greek 10-year bond yields at one stage last week. The spread between French and German 10-year bond yields widened to 2012 levels last week, before falling back to 80bps. However, a further recovery in the yield spread could be tricky if a no-confidence vote in the French government is lingering over markets.’
Stellantis shares plunged 7.1% in Paris. Chief Executive Officer Carlos Tavares has resigned, forcing the company to expedite its leadership transition amid a turbulent market environment.
The company said its board of directors, which had already been searching for Tavares’ successor due to his planned departure in 2026, now aims to appoint a new CEO by mid-2025.
In the meantime, a leadership committee led by board Chair John Elkann will oversee operations, Stellantis said.
Senior Independent Director Henri de Castries said: ‘Stellantis’ success since its creation has been rooted in a perfect alignment between the reference shareholders, the board and the CEO. However, in recent weeks different views have emerged which have resulted in the board and the CEO coming to today’s decision.’
In London, Persimmon and Vistry lost 2.8% and 2.7% in early dealings, the worst FTSE 100 performers. RBC lowered both to ’underperform’ from ’sector perform’.
Another steep share price fall for Vistry may all but ensure it will soon surrender its FTSE 100 status. An index review is announced by FTSE Russell later this week, and indicative changes from last week showed Vistry is on the chopping block.
There was some deal-making impetus elsewhere in London. K3 Business surged 58% as it plans to return a ‘substantial’ amount of proceeds from a disposal to shareholders.
Business-critical software solutions provider, which serves fashion and apparel brands, has agreed to sell its NexSys unit to Syspro from £36.0 million in cash.
‘It is anticipated that a substantial proportion of the net proceeds will be returned to shareholders during the first half of 2025, following the board’s due consideration of the most effective and practicable way of distributing net proceeds. The remainder of the proceeds will be retained within the group for working capital and restructure funding purposes,’ K3 said.
Condor Gold shot up 33%. Metals Exploration fell 4.9%.
Philippines-focused mineral resources firm Metals Exploration said it is sizing up a takeover offer for fellow London listing Condor Gold. Metals Exploration said it is ‘in advanced-stage discussions’ with the board of Condor, the company developing the La India gold project in Nicaragua. Metals owns the Runruno gold asset in the Northern Philippines.
‘There can be no certainty that any firm offer will ultimately be made, nor as to the terms on which any offer might be made,’ Metals added.
In a statement from Sunday, Condor said it received two non-binding offers, one from Metals and another from Toronto-listed Calibre Mining. The terms of either offer were not disclosed.
Calibre on Monday, however, said it does not plan to make an offer for Condor.
‘Condor initiated the sale process for their La India gold asset two years ago. During this time, Calibre acknowledges having engaged in discussions with Condor regarding the potential acquisition of the La India gold asset, which aligns well within Calibre’s Hub & Spoke operation. However, Calibre confirms that it is not currently in discussions with Condor, nor does it have an active offer,’ it explained.
Metals, meanwhile, on Monday announced it entered into an unsecured bridging term loan facility worth £5.5 million Drachs Investments No 3 Ltd. The financing is in connection with its possible Condor buy. It carries a 10% annual interest rate. Metals noted Drachs owns just over 18% of its shares.
Brent oil was quoted at $72.50 a barrel early Monday, fading from $72.65 at the time of the London equities close on Friday. Gold slipped to USSD2,628.41 an ounce from $2,660.13.
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