UK water firms had their gains pulled back by Friday’s close following yesterday’s Ofwat induced bump, as Trump threatened the EU with tariff’s if it failed to address its trading deficit.
The FTSE 100 index closed down 12.67 points, 0.2%, at 8,092.65. The FTSE 250 ended up 31.24 points, 0.2%, at 20,430.62, and the AIM All-Share closed down 0.1, or 0.73 of a point, at 711.05.
The Cboe UK 100 ended down marginally at 812.17, the Cboe UK 250 closed up 0.2% at 17,940.21, and the Cboe Small Companies ended down 0.4% at 15,788.23.
The UK and Mauritius have been holding talks and hope to finalise the deal to hand back the Chagos Islands ‘as quickly as possible’.
They held a ‘series of productive, ongoing conversations and exchanges’ on finalising the treaty, the countries said in a joint statement on Friday.
It comes after the new Mauritian prime minister rejected the deal earlier this week, which was struck under his predecessor.
‘Both countries reiterated their commitment to finalising a treaty as quickly as possible, whose terms will agree to ensure the long-term, secure and effective operation of the existing base on Diego Garcia and that Mauritius is sovereign over the Archipelago,’ the statement said.
The agreement would see the UK give up sovereignty over the islands, including Diego Garcia, which houses a strategically important UK-US military base.
The proposed deal was struck before elections in both Mauritius and the US and senior figures in the incoming Trump administration have voiced doubts about it.
US lawmakers raced Friday to prevent a government shutdown due to bite within hours, after Donald Trump and Elon Musk sabotaged a bipartisan agreement that would have kept the lights on well beyond Christmas.
With government funding running out at midnight, the Republican-led House of Representatives needs to come up with a short-term fix to replace a funding package that looked like a done deal before the president-elect’s intervention.
If no agreement is struck, federal agencies, national parks and other services will begin shuttering Saturday as the government prepares to send up to 875,000 workers home for the holidays without pay.
‘If there is going to be a shutdown of government, let it begin now, under the Biden Administration,’ Trump said on social media early Friday, seeking to avoid blame for the chaos.
‘This is a Biden problem to solve, but if Republicans can help solve it, they will!’
The race against the clock comes after a week of drama in Washington that began with Republican House Speaker Mike Johnson releasing a mammoth funding bill stuffed with unrelated measures that ballooned its cost.
Separately, Trump on Friday threatened the EU with tariffs if the bloc does not reduce its ‘tremendous’ trade gap with Washington through oil and gas purchases.
‘I told the EU that they must make up their tremendous deficit with the US by the large scale purchase of our oil and gas,’ Trump said in a post on his Truth Social platform in the early hours of Friday.
‘Otherwise, it is TARIFFS all the way!!!’
According to US figures, goods imports from the EU were $553.3 billion in 2022, while its exports to the bloc were $350.8 billion.
This puts the US goods trade deficit with the EU at $202.5 billion that year.
David Oxley, chief Climate & Commodities economist at Capital Economics, said: ‘President-elect Trump’s social media outburst warning the EU to buy more US oil and gas won’t cause sleepless nights in Brussels. After all, whereas EU officials might have balked had they been implored to buy armfuls of Trump’s fragrances or watches, it’s firmly in the bloc’s interest to purchase US liquefied natural gas, LNG, as part of the continued shift away from Russian gas molecules. The key point is that the surge in global LNG exports over the coming years will help to reduce the prices of natural gas in Europe and Asia.’
Back to the UK, retail sales rose on-month in November for the first time since August, numbers showed, but fell short of expectations.
According to the Office for National Statistics, UK retail sales volumes rose by 0.2% month-on-month in November, improving from a 0.7% fall in October but falling short of the FXStreet-cited market consensus of 0.5% growth.
On an annual basis, retail sales grew 0.5% in November. This missed the FXStreet consensus of 0.8%, and represented a slowdown from the 2.4% increase in the year to October.
Further, figures showed the UK government borrowed less than expected in November, aided by higher tax receipts and lower debt interest payments.
According to the Office for National Statistics, government borrowing - the difference between public sector spending and income – was £11.2 billion in November, down from £14.6 billion a year prior, and the lowest November reading for three years.
November’s figure was below FXStreet-cited market consensus of £15.5 billion and a drop from £17.4 billion in October.
Government receipts were £81.5 billion in November, £3.2 billion more than a year ago, boosted by increased tax receipts which rose to £61.8 billion from £58.0 billion a year ago.
Government expenditure was £88.2 billion in November down a bit from £88.4 billion a year ago. Within this, interest payable on central government debt fell to £3.0 billion from £7.7 billion, largely because the interest payable on index-linked gilts rises and falls with the retail prices index.
In European equities on Friday, the CAC 40 in Paris ended up 0.4%, while the DAX 40 in Frankfurt ended down 0.3%.
The pound was quoted at $1.2549 at the London equities close Friday, up slightly compared to $1.2546 at the close on Thursday.
The euro stood at $1.0399 at the European equities close Friday, higher against $1.0384 at the same time on Thursday.
Against the yen, the dollar was trading at JP¥156.58, down compared to JP¥157.77 late Thursday.
On London’s FTSE 100, water firms United Utilities and Severn Trent gave up Thursday’s gains after the Ofwat pricing ruling, closing down 1.7% and 2.3% respectively.
Carnival closed 3.6% higher.
The Florida-based cruise ship operator reported an on-year swing to a pretax profit of $1.92 billion in the financial year ended November 30, from a $62 million loss a year ago, with adjusted net income of $1.89 billion outperforming September guidance by over $130 million.
Carnival’s improved profit was driven a by 16% increase in revenue over the same period to $25.02 billion, an all-time high, from $21.59 billion, bolstered by a record fourth quarter, with revenue up 10% year-on-year to $5.94 billion from $5.40 billion.
For financial year 2025, Carnival expects to achieve adjusted net income of approximately $2.3 billion, over 20% higher than 2024’s $1.9 billion.
It also anticipates adjusted earnings before interest, tax, depreciation and amortisation of approximately $6.6 billion, up approximately $500 million from 2024’s record $6.1 billion.
Carnival Chief Executive Josh Weinstein said: ‘This has been an incredibly strong finish to a record year. Revenues hit an all-time high driven by a strong demand environment that we elevated throughout the year, enabling us to outperform our initial 2024 guidance by $700 million and deliver nearly $2 billion more to the bottom line, year over year.’
Headlam climbed 6.1%.
The Birmingham-based floor coverings specialist announced the £53.9 million sale of three properties in Ipswich, Gildersome and Leeds at a premium of 64% to the properties’ book value and 14% to their last market valuation.
Collectively, the properties had a book value of £32.9 million. As a result, the sales generated a profit of around £21 million for Headlam.
The group now holds a net cash position, with its remaining property portfolio valued at £95.0 million.
Amcomri shares rose slightly, as the engineering services and industrial manufacturing group started trading on London’s AIM market.
Amcomri raised £12 million in its initial public offering, placing 21.8 million new shares at 55 pence each, as planned. At the IPO price, the company had a market capitalisation of £39.5 million upon admission.
Its shares closed 5.1% higher at 57.8p.
London-based Amcomri operates a ’buy, improve, build’ strategy for specialist engineering services and industrial manufacturing.
This makes it similar to FTSE 100 constituent Melrose Industries PLC, though Melrose currently consists only of the aerospace engineering businesses bought as part of its hostile takeover of GKN in 2018, having split off automotive engineering firm Dowlais Group PLC last year.
Novo Nordisk was the stand-out story. Shares in the company closed 21% lower in Copenhagen.
The Danish drug developer behind Ozempic and Wegovy said new weight-loss drug CagriSema helped patients lose an average of 22.7% of their weight in a study. However, this missed the company‘s goal for an average of 25% weight loss.
Novo Nordisk also manufactures the popular Wegovy obesity product.
The results only narrowly beat Eli Lilly’s rival drug Zepbound which led to an average 22.5% weight loss in clinical trials.
Stocks in New York were higher at the London equities close, with the DJIA up 1.8%, and the S&P 500 index and the Nasdaq Composite up 1.7%.
Brent oil was quoted at $72.71 a barrel at the London equities close Friday, down from $72.80 late Thursday.
Gold was quoted at $2,627.90 an ounce at the London equities close Friday, higher against $2,591.10 at the close on Thursday.
Monday’s UK corporate calendar will be quiet.
The economic calendar for Monday has UK business investment data, Irish wholesale prices and consumer confidence data from the US.
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