The FTSE 100 started the week lower on Monday, weighed down by oil majors and mining companies.
The FTSE 100 index opened down 23.43 points, 0.3%, at 7,666.18. The FTSE 250 was up 64.06 points, 0.3%, at 19,274.45, and the AIM All-Share was down 0.4 of a point, 0.1%, at 750.83.
The Cboe UK 100 was down 0.3% at 765.81, the Cboe UK 250 was up 0.4% at 16,782.47, and the Cboe Small Companies was flat at 14,958.58.
In European equities on Monday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was marginally higher.
In the FTSE 100, oil majors Shell and BP fell 2.2% and 0.9% respectively, with Brent oil trading at $78.00 a barrel, lower than $78.82 late Friday.
Shell also gave an update on the outlook for the fourth quarter of 2023, ahead of its final results next month. For Integrated Gas, it expects production of 880,000 to 920,000 barrels of oil per day. Trading and optimisation in the division is expected to be ‘significantly higher’ than the prior quarter, due to ‘seasonality and increased optimisation opportunities. For Upstream, it expects production between 1.83 and 1.93 million boepd.
It came as the company flagged that it is facing up to $4.5 billion of impairment charges for the latest quarter. This is partly driven by assets linked to its Singapore refining and chemicals hub, which the London-based firm is reportedly looking to sell.
Miners were also in the red, with Endeavour Mining falling 2.0%, after a sharp fall late last week following the sacking of its chief executive. Fresnillo, Anglo American and Glencore each fell 1.2%.
Gold was quoted at $2,029.83 an ounce early Monday, lower than $2,051.00 on Friday.
In the FTSE 250, Plus500 jumped 6.0% as it said full-year revenue and earnings are ’significantly ahead‘ of market expectations, and that it looks to the year ahead with ’continued confidence.‘
The London-based financial technology company providing online trading services said it expects revenue of $725 million for 2023, down 13% from $832.6 million in 2022. Earnings before interest, tax, depreciation and amortisation is expected to be $340 million, a 25% drop from $453.8 million.
This compares with company-compiled analyst forecasts of revenue of $645 million and Ebitda of $300 million back in October.
Among London’s small-caps, CMC Markets surged 20%.
The online trading platform company said it saw a strong performance in the third quarter of its financial year. ’This was driven by an improvement in market conditions led by an increased contribution from the B2B and institutional business with the group benefiting from the long-term investments in this area,‘ CMC Markets explained.
It now expects annual net operating income between £290 to £310 million compared to its previous guidance range of £250 to £280 million.
Meanwhile, the dollar gained ground against major currencies over the weekend.
Sterling was quoted at $1.2713 early Monday, lower than $1.2738 at the London equities close on Friday. The euro traded at $1.0947, lower than $1.0966. Against the yen, the dollar was quoted at JP¥144.40, up versus JP¥144.29.
Friday’s strong-looking US nonfarm payrolls data showed that the US economy added more jobs than expected in December. This led some to dial back expectations of interest rate cuts from the Federal Reserve in 2024, though a 25 basis point cut in March is still widely anticipated.
However, the near-stagnant reading of the US service sector from the Institute of Supply Management on Friday is ’very concerning for those looking for a canary‘, according to SPI Asset Management managing partner Stephen Innes.
‘It serves as a potential warning signal that requires confirmation from other economic indicators,’ he added.
The focus for the week now shifts to the US consumer price inflation reading on Thursday.
In the US on Friday, Wall Street ended slightly higher, with the Dow Jones Industrial Average and the Nasdaq Composite both rising 0.1%, while the S&P 500 added 0.2%.
US lawmakers announced a bipartisan agreement Sunday on fiscal year 2024 funding totals that marks a step towards averting a looming government shutdown in a presidential election year.
The agreement on a roughly $1.6 trillion ‘topline’ federal spending limit was announced by Republican House Speaker Mike Johnson and Democratic leaders in Congress after weeks of negotiations.
Meanwhile, in the UK, Prime Minister Rishi Sunak has hinted that pre-election tax cut giveaways will be made on the back of ‘difficult decisions to control welfare’.
The PM said it was his ‘priority’ to ‘keep cutting people’s taxes’ after a 2 pence cut in national insurance was introduced on Saturday, having been announced in the autumn statement. Over the weekend, Chancellor Jeremy Hunt said he does not know if he can afford to cut taxes.
In Asia on Monday, financial markets were closed for Coming of Age Day. In China, the Shanghai Composite closed down 1.4%, while the Hang Seng index in Hong Kong was down 1.9%. The S&P/ASX 200 in Sydney closed down 0.5%.
Still to come on Monday’s economic calendar, there will be eurozone consumer confidence and retail sales readings at 1000 GMT.
On Friday, there will be US banking earnings from Bank of America, Wells Fargo, Citigroup and JPMorgan.
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