- FTSE 100 drops 28 points
- Retail footfall down in December
- Mortgage approvals drop
3.58pm: FTSE 100 subdued in late trading
Gains by heavyweights Shell PLC (LSE:LON:SHEL, NYSE:SHEL) and BP PLC (LSE:NYSE:BP (LON:BP).) failed to support the FTSE 100 as just 24 of its constituents headed into late trading in positive territory.
Shares in the oil duo moved 1.9% and 1.7% higher respectively over the course of the day to lead the risers as benchmark Brent crude oil held onto gains at US$76.23 a barrel.
Oil’s stubbornness weighed on easyJet (LON:EZJ) PLC though, which fell 3.3% to sit behind only Diageo PLC (LSE:LON:DGE), down 3.6%, among the day’s losers in the meantime.
Speculation has built that oil could be on course for a stronger year with improving economic conditions in China and after a drop in US inventories last week.
Such rise would weigh on airlines through inflated fuel prices, analysts pointed out, with shares in British Airways owner International Consolidated Airlines Group (LON:ICAG) SA (LSE:IAG), Wizz Air Holdings PLC (AIM:LON:WIZZ) and Ryanair (LON:0RYA) Holdings PLC (LSE:RYA) also falling on Friday.
Elsewhere on the FTSE 100, Persimmon PLC (LSE:LON:PSN), Barratt Redrow (LON:RDW) PLC (LSE:BTRW) and Taylor Wimpey PLC (LSE:LON:TW.) sat among fallers in the wake of Bank of England data showing a surprise drop in mortgage approvals last November.
Overall, the index approached late trading down 28 points at 8,232.
3.11pm: FTSE 100 predicted to enjoy best year since 2009
Analysts have tipped the FTSE 100 to have its best year since 2009 as interest rates are cut and oil prices move upwards.
According to Bloomberg data, Wall Street analysts expect London’s blue-chip index to climb by 15% over the course of 2025, against last year’s 5.7% gain.
“Accelerating UK economic and earnings growth, tame inflation, rate cuts [...] and Brent crude oil prices remaining in this year’s range of US$70 to US$90 per barrel, may help to deliver solid stock market performance,” Charles Schwab’s Jeffrey Kleintop commented.
2.47pm: Nasdaq surges as Wall Street bounces back at open
Wall Street enjoyed a solid start as stocks bounced back after a lacklustre start to the year’s trading on Thursday.
The Nasdaq added 1.0% following the opening bell, while the S&P 500 and Dow Jones gained 0.8% and 0.5% respectively.
Nvidia Corp (NASDAQ:NVDA) was among the early risers, adding 3.2%, while Amazon.com Inc (NASDAQ:AMZN) moved 2.3% higher.
Elsewhere, United States Steel Corp (BVMF:USSX34) shares sunk 6.8% on confirmation president Joe Biden had blocked its planned takeover by Japan’s Nippon over national security fears.
2.27pm: FTSE 100 regains as oil buoys Shell and BP
London’s blue chips bounced between positive and negative territory on Friday afternoon, aided by gains for BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL) in line with oil’s ongoing resurgence.
Shell headed the risers with a 1.9% gain, while BP shares added 1.6%, helping push the FTSE 100 up by one point to 8,261.
Benchmark Brent crude remained inflated and was trading at US$76.23 a barrel come the afternoon, in line with levels not seen since mid-October.
“A bigger than expected drawdown of oil stocks in the US and hopes for a fresh stimulus boost for the energy-hungry Chinese economy are behind the push,” Hargreaves Lansdown (LON:HRGV) analyst Susannah Streeter noted.
Chinese president Xi Jinping’s had flagged confidence around the world’s second-largest economy in a New Year's address, while figures on Thursday showed a drop in US crude oil stocks by 1.178 million barrels through last week.
Elsewhere on the index, Airtel Africa PLC (LAGOS:AIRTELAFRI) (LSE:AAF) racked up a 1.9% gain, while Diageo PLC (LSE:DGE) led the fallers, down 2.9%.
Housebuilders also remained under pressure after Bank of England figures earlier on showed an unexpected drop in mortgage approvals during November.
2.07pm: Biden blocks $15bn US Steel takeover by Nippon
President Joe Biden on Friday confirmed Nippon Steel’s US$15 billion bid for US Steel would be blocked over national security concerns.
Reports earlier in the day had said the deal would be blocked following a review by the Committee on Foreign Investment in the United States... Read more
Biden later issued a presidential order forcing Japan’s Nippon and US Steel “to fully and permanently abandon the proposed transaction”.
He added: “There is credible evidence that leads me to believe that Nippon Steel [...] might take action that threatens to impair the national security of the United States.”
The review had raised fears that the deal could reduce US Steel’s production capacity, potentially affecting critical industries.
1.17pm: Mortgage approvals decline sign of things to come - analysts
November’s decline in mortgage approvals may be a sign of things to come as rates remain high on a wider hawkish turn across the market, EY ITEM Club analysts have said.
Bank of England figures on Friday showed net mortgage approvals unexpectedly fell to 65,700 over the month, missing estimates for 68,500 and against October’s 68,300.
This could well have reflected dampened sentiment in the wake of October’s Autumn Budget, analysts noted.
However, swap rates, which determine mortgage rates, have since returned to similar levels seen at the time of the Budget and US election, in line with dashed expectations for central bank cuts ahead, EY ITEM Club pointed out.
“There is scope for a temporary rebound in mortgage demand, as buyers try to set purchases in motion to complete before stamp duty thresholds fall back to normal levels from April,” analysts said.
“But once that boost has faded, poor affordability will remain a strong headwind to approvals, unless markets turn more dovish again.”
Stamp duty is set to rise from April, meaning first time buyers will pay the tax on homes worth over £300,000, against £425,000 previously, and others will be charged at £125,000, compared to £250,000 beforehand.
The Bank of England’s last meeting in December saw central bankers point to uncertainty around the scope for future rate cuts, given higher than expected inflation but coinciding economic decline.
12.27pm: Mortgage rates drop as HSBC latest to cut
HSBC Holdings PLC (LSE:LON:HSBA) will cut rates on a string mortgages to kick off the new year, in line with a wider drop across the market in recent days.
The lender on Friday said rates across its residential and buy-to-let deals would be reduced from Monday, including on two, three, five and 10-year fixed products.
Comparison site Moneyfacts separately reported on Friday that mortgage rates across the country had headed lower as businesses returned following the New Year’s Day break.
Average two-year fixed mortgage rates sat at 5.4767% come Friday, according to Moneyfacts, against 5.4808% before the turn of the year.
“Following the festive period, this change comes at a crucial time, as many potential home movers start re-engaging with plans for the year ahead and first-time buyers look to act swiftly ahead of the stamp duty changes,” Nick Mendes, of mortgage broker John Charcol, commented... Read more
11.42am: Nasdaq to bounce back as Wall Street set for better start
Wall Street appeared in brighter spirits on Friday after US stocks moved into negative territory in Thursday’s first trading session of the year.
Futures had the Nasdaq up 0.3% ahead of Friday’s opening bell, while the S&P 500 and Dow Jones were seen 0.2% and 0.1% higher respectively.
Thursday had brought declines for all three, with the Dow Jones shedding 0.4% over the course of the day.
For the S&P 500, Thursday’s drop marked its fifth consecutive decline, after December's Federal Reserve meeting saw interest rate cut expectations slashed.
“Given the super-stellar year for US stocks in 2024, it’s not surprising a bit more caution has crept in amid uncertainty about monetary policy, especially with unpredictable changes from the White House expected,” Hargreaves Lansdown’s Susannah Streeter noted.
11.20am: Shell, BP fail to buoy FTSE 100 as housebuilders drop
Gains by heavyweights Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) failed to help lift the FTSE 100 into positive territory on Friday as housebuilders joined those in the red.
London’s blue chip index was trading 15 points lower at 8,244 by late morning, weighed down by the likes of housebuilders.
Bank of England figures earlier on showed new mortgage approvals fell faster than expected in November to 65,700 from October’s 68,500.
Barratt Redrow PLC (LSE:BTRW) headed the fallers, down 1.9%, while Taylor Wimpey PLC (LSE:TW.), Persimmon PLC (LSE:PSN) and Berkeley Group Holdings PLC (LON:BKGH) (LSE:BKG) also dropped.
easyJet PLC also remained among fallers as higher oil prices raised fears over fuel costs.
BP and Shell led the risers in the meantime, up 1.2% and 1.0% respectively, in line with oil’s continued strength.
10.52am: Gold continues solid start to new year
Gold racked up a further gain on Friday, building on a so-far solid start to the new year.
Come late morning, the yellow metal was trading at US$$2,655 an ounce for a 0.44% gain for the day and against the US$2,608 seen at the turn of the year.
2024 had marked a stellar year for gold, in which it repeatedly broke record highs to reach a peak of US$2,792 in late October.
Optimism had also built on Thursday around another strong year ahead for gold, with analysts pointing to Donald Trump’s return to the White House.
Zaye Capital Markets Naeem Aslam noted the his second term as president was likely to see pressure placed on the Federal Reserve to cut interest further and spark a trade war, both of which would in turn buoy the precious metal.
10.30am: Retailers face painful year after underwhelming Christmas - analysts
December’s decline in footfall has left retailers facing a tough year of it in 2024, as existing cost pressures risk being worsened with tax hikes, analysts have said.
British Retail Consortium figures on Friday showed a 2.2% drop in footfall across UK shops over the month.
This meant footfall declined by 2.5% over the three months to December, or the Golden Quarter, and by 2.2% in 2024.
Hargreaves Lansdown analyst Susannah Streeter noted the picture may have been “even bleaker” were it not for the key Christmas shopping period.
She highlighted commentary from the BRC pointing to a shift in consumer trends away from high streets and shopping centres to retail parks, where the likes of free parking and wider variety of “things to do” was said to have attracted numbers.
“It looks set to be a highly challenging year ahead for retailers who will be faced with the double whammy of shoppers increasingly focused on getting value for money, while their own costs rise due to the increase in employer National Insurance taxes,” Streeter said.
Sensormatic retail consultant Andy Sumpter echoed the view, warning firms would have to “look afresh” and “adopt innovative strategies” to win back shoppers.
“Retailers will be nervous about passing on extra costs to the customer, but they won’t want to stomach lower profit margins if possible,” AJ Bell’s Russ Mould added.
“There is a heightened risk of profit warnings from the retail sector over the coming weeks as management teams take a more realistic view of the year ahead.”
9.55am: Airlines stocks face pressure on oil strength
Airline stocks came under pressure on Friday ongoing strength for oil prices raised the prospect of higher fuel prices ahead.
easyJet PLC led the FTSE 100’s fallers come mid-morning, having fallen by 1.8%, while British Airways owner International Consolidated Airlines Group SA (LSE:IAG) slipped 1.1%.
Wizz Air Holdings PLC (AIM:WIZZ) and Ryanair Holdings PLC (LSE:RYA) also fell, despite both reporting an increase in passenger numbers through December earlier in the day.
Declines followed an increase in the price of benchmark Brent crude to a peak of US$76.54 a barrel on Thursday, which equated to a two-month high.
Oil eased back on Friday morning to US$75.57, but remained well above the US$70.97 mark seen in early December.
AJ Bell (LON:AJBA) analyst Russ Mould noted airlines had enjoyed easing cost pressures in 2024 as oil prices receded.
“However, with oil creeping higher in the first knockings of 2025, fuel costs could still return as a meaningful headwind for the industry,” he said.
9.41am: Mortgage approvals drop faster than expected
The number of mortgages approved for new house purchases declined by more than expected in November, Bank of England figures showed on Friday.
Net mortgage approvals fell to 65,700, missing estimates for 68,500 and against October’s 68,300.
Net borrowing of mortgage debt declined by £1.0 billion to £2.5 billion month on month in the meantime, while gross lending climbed from £20.3 billion to £20.7 billion.
Mortgage approvals remained above the previous year’s average of 60,400 though, while the effective interest rate on newly drawn mortgages hit its lowest since April at 4.5%.
9.06am: Downbeat mood sweeps across London
Stocks across London headed lower on Friday in a slight reverse on Thursday’s rally.
The FTSE 100 remained off the mark, down 0.12% at 8,249, while the wider-spanning FTSE 350 headed 0.14% lower to 4,545.
London’s junior market fared little better, with the AIM 100 dropping 0.08% and the AIM-All Share slipping 0.07%.
“Stocks are struggling for a sense of direction in early trade in London, with the New Year rally losing steam,” Hargreaves Lansdown analyst Susannah Streeter commented.
8.52am: Wizz Air, Ryanair grow passenger numbers
Low-cost carriers Ryanair Holdings PLC (LSE:RYA) and Wizz Air Holdings PLC (AIM:WIZZ) recorded stronger passenger figures in December as travellers headed on festive trips.
Irish airline Ryanair reported Friday that passenger numbers ticked by 8% to 13.6 million over the month and that load factors improved from 91% to 92%.
European rival Wizz noted in the meantime that it carried 5.06 million people in the meantime, marking a 1.9% increase year on year… Read more
This was despite a 3.1% decline in its seat capacity but as load factors improved from 82.1% to 86.5%.
Shares in both fell on Friday, alongside peer easyJet PLC, coinciding with ongoing strength for oil prices.
8.32am: Bars enjoy boost in run-up to Christmas
Bars enjoyed a surge in trading in the run-up to Christmas as festive parties helped provide a much-needed boost for the pressured sector.
According to CGA by NIQ’s Hospitality Business Tracker, cited by Propel, sales grew by 20.5% across Britain’s managed bars year on year over the week from December 16.
“This will be a welcome boost for the beleaguered sector, which has spent most of the past year in decline,” CGA by NIQ said.
“It is also a welcome reminder that although spending may be currently restrained, there is still remarkable consumer desire to make the most of special occasions.”
Bars saw the strongest growth across Britain’s hospitality sector over the key pre-Christmas week as a result, as overall sales ticked up by 2.7%.
Food-led operators also enjoyed stronger sales, with growth among on-the-go traders up 3.4% against a year earlier and climbing by 2.1% at restaurants.
Pubs faced muted growth in the meantime of 0.7% year on year.
This meant sales growth outdid inflation, after six of the previous 11 months saw figures fail to keep up with price rises.
8.05am: Stocks open on back foot
London’s blue chips failed to hold on to Thursday’s strong gains as trading got underway on Friday.
The FTSE 100 dropped nine points to sit at 8,250 at the open.
Entain PLC (LSE:LON:ENT) led the early fallers with a 0.8% drop, followed by the likes of BAE Systems (LON:BAES) PLC (LSE:BA.) and HSBC Holdings PLC (LSE:HSBA).
Unite Group (LON:UTG) PLC headed the risers in the meantime, up 0.5%, ahead of Vodafone Group PLC (LSE:LON:VOD) and Fresnillo PLC (LSE:LON:FRES), which had been buoyed by optimism around gold on Thursday.
Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) were also among early gainers, in line with ongoing strength for oil.
7.53am: Oil holds near two-month high
Oil largely held onto gains on Friday morning after having hit a two-month high on Thursday.
Benchmark Brent crude was trading at US$75.89 a barrel early on, which was off Thursday’s peak of US$76.54 but in line with levels last seen in late October.
Thursday’s rise had lifted shares in FTSE 100 heavyweights BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL), aiding the index to an 87-point gain over the first trading day of the year.
IG Index analysts noted oil had been buoyed by confidence in Chinese president Xi Jinping’s New Year address around the world’s second-largest economy.
Figures on Thursday also showed a drop in US crude oil stocks by 1.178 million barrels.
7.32am: Retailers see poor December to cap off disappointing Golden Quarter
Retailers’ hopes for a Christmas-fueled revival were never met as footfall fell in December to cap off a poor Golden Quarter and tough year as a whole, figures on Friday showed.
According to the British Retail Consortium (BRC), footfall in UK shops declined by 2.2% year on year last month.
Though this marked an improvement from the 4.5% drop seen in November, a further fall meant footfall was down by 2.5% over the Golden Quarter in the three months to December.
High street footfall decreased by 2.7% in December, while shopping centre’s faced a 3.3% drop as shopper numbers across retail parks remained flat year on year.
BRC chief executive Helen Dickinson noted “a drab December” had capped off a “disappointing year” in which retail footfall dropped by 2.2% against 2023.
Footfall across UK shops had fallen for two consecutive years as a result, she pointed out.
“High streets and shopping centres were hit particularly hard throughout the year as people veered towards retail parks to take advantage of free parking and the variety of larger stores,” Dickinson added.
“Shopping habits have been changing fast and customers are increasingly looking for more experiential shopping, as well as a variety of cafes, services and things to do.
“Unfortunately, investment in town centres and high streets is held back by our outdated business rates system, which penalises town and city centres.”
7.13am: Stocks to climb further
Futures pointed to another positive start for London’s blue chips on Friday as the FTSE 100 was seen adding 11 points to reach 8,251.
The FTSE 100 had rallied by 87 points on Thursday to mark a strong start to the new year’s trading, while Endeavour Mining PLC (LON:EDV) (LSE:EDV, TSX:EDV, OTCQX:EDVMF) and Fresnillo PLC (LSE:FRES) led gains.
Both had benefited from continued optimism around gold prices heading into 2025, with the precious metal trading up 0.85% at US$2,657 an ounce on Monday.
Elsewhere, Asian markets were mixed overnight as South Korea’s Kospi racked up the biggest gain of 1.8%, while China’s Shenzhen was the largest faller, down 1.9%.