Stock prices in London opened mixed on Monday, with Phoenix Group leading the way among large-caps, but defence technology firm Qinetiq slumping in the FTSE 250 as it grapples with tough trading conditions.
Market focus this week will be on a slew of central banking decisions, with the Federal Reserve, Bank of England and Bank of Japan announcing rate decisions.
On Monday, eyes will be on a US retail sales reading.
The FTSE 100 index traded up 6.64 points, 0.1%, at 8,638.97. The FTSE 250 was down 15.72 points, 0.1%, at 19,979.87, and the AIM All-Share was up 2.81 points, 0.4%, at 690.55.
The Cboe UK 100 was up slightly at 863.08, the Cboe UK 250 was 0.1% lower at 17,411.30, and the Cboe Small Companies was flat at 15,570.23.
In Paris, the CAC 40 rose 0.2%, while the DAX 40 in Frankfurt lost 0.1%.
XTB analyst Kathleen Brooks commented: ‘Rarely is one man dominant for financial markets and for central banks, however, Donald Trump’s new economic policy means that he is centre stage as we wait to hear from a multitude of central bankers this week. Half of the G10 group of currencies have central bank meetings this week, including the Federal Reserve in the US, the Bank of England in the UK, the Bank of Japan, the Swiss National Bank and the Swedish Riksbank. Elsewhere, South Africa, Brazil, Russia and China will also announce their latest interest rate decisions.
‘The vast majority of central banks are expected to remain on hold. This week will be the first time that the world’s most important central bankers will collectively assess how President Trump’s trade policies will impact the global economy. We had a preview last week from ECB President Christine Lagarde, who said that there was a lot of uncertainty about the economic outlook, and that maintaining price stability in this ’new era’ created by the US will be very hard for central bankers like herself.’
According to the CME FedWatch Tool, there is a 99% chance the Fed leaves rates unmoved on Wednesday.
‘The Fed will also release its new dot plot, which will include FOMC members’ latest projections for interest rates in the Trump era. The last dot plot in December, saw expectations for a mild loosening of monetary policy in the coming years. The median forecast for interest rates for this year at 3.9%, in 2026 the median forecast was 3.35%, in 2027 it was just over 3.1%, and the long-term neutral rate was 2.85 – 3%. If these expectations are scaled up on the back of inflation risks emanating from President Trump’s trade policies, this could spook financial markets,’ Brooks added.
The pound climbed to $1.2934 early Monday, from $1.2920 at the time of the London equities close on Friday. The euro was steady at $1.0879, while against the yen, the dollar rose to JP¥148.86 from JP¥148.34.
In China, the Shanghai Composite ended 0.2% higher on Monday, while the Hang Seng Index in Hong Kong was up 0.8%. In Tokyo, the Nikkei 225 added 0.9%. In Sydney, the S&P/ASX 200 closed up 0.8%.
China has unveiled an action plan it hopes will help Beijing to overcome stubbornly low consumer demand and meet its ambitious growth target, state news agency Xinhua reported.
In New York on Friday, the Dow Jones Industrial Average surged 1.7%, the S&P 500 jumped 2.1% and the Nasdaq Composite soared 2.6%.
In London, Phoenix Group shares advanced 6.9%. It hailed a strong 2024 performance and ‘good progress’ in the execution of a three-year strategy.
Chief Executive Officer Andy Briggs said: ‘We are ahead of plan from both a strategic and financial perspective, delivering operating cash generation of £1.4 billion two years ahead of our 2026 target. We continue to operate in the top half of our shareholder capital coverage ratio range and our strong cash generation has enabled us to repay debt whilst also investing in our business.
‘Our strong performance in 2024 and the operating momentum we have built will support us in delivering our growth strategy and have led us to upgrade our cash generation and adjusted operating profit targets through to 2026. Delivery will give us the financial flexibility to reduce our leverage, while also sustaining our progressive dividend for shareholders.’
Phoenix now expects operating cash generation to grow by a ‘mid-single digit percentage’ per year going forward, after it achieved its 2026 target ahead of schedule.
The firm added: ‘Total cash generation cumulative 3-year target increased from £4.4 billion to £5.1 billion across 2024-26 driven by the sustained growth in OCG. We therefore expect to generate excess cash of £1.1 billion across 2024-26 and this will be allocated in accordance with our capital allocation framework, with a clear focus on deleveraging.’
It is aiming from £1.1 billion in adjusted operating profit in 2026, upped from a previous target of £900 million.
Qinetiq was the worst FTSE 250 performer, slumping 14%. It said tough trading conditions continued in its fourth-quarter, but it believes its long-term future is promising.
The defence technology firm said there were ‘further delays to a number of contract awards’.
‘In addition, recent geopolitical uncertainty has impacted our usual fourth quarter weighting to higher margin product sales from the US,’ it cautioned.
Qinetiq said it will book a non-cash impairment in the US this year.
‘Within the context of the market environment and following the appointment of Tom Vecchiolla in January to lead our US Sector, we reviewed our US operations and are embarking on a restructuring to support future growth, building on our core capabilities in the US and leveraging incumbent positions across the group. As a result of these actions and the assumption of a higher discount rate we expect to take a goodwill impairment charge on the US business of £140 million at year end,’ it said.
The firm announced an extension to its share buyback programme of up to £200 million. This is to be executed over the following two years once the current £50 million portion of an ongoing programme is completed in May.
Asos was also one of the weakest performers in the mid-cap index, losing another 6.7%. The stock has slumped almost 50% year-to-date, and could be set for a 22nd successive daily fall. It is on a more than 30-day streak without registering a gain, having also seen sessions where it ended flat. The last time it rose was a 7.9% advance on January 30.
Among the best performers on AIM, CVS Group added 12%. RBC raised the veterinary services provider to ’outperform’ from ’sector perform’.
Gold was down slightly at $2.986.21 an ounce on Monday morning, from $2,988.54 late Friday afternoon. A barrel of Brent advanced to $70.93 from $70.32.
Still to come on Monday is a US retail sales reading at 1230 GMT.
Copyright 2025 Alliance News Ltd. All Rights Reserved.
