- FTSE 100 climbs 56 points to 8,308
- FTSE 250 falls to eight-month low before rebounding into positive territory
- Retailers Tesco (LON:TSCO), M&S, B&M provide Xmas trading updates
- Greggs (LON:GRG) warns that high street growth has slowed
3.54pm: European stocks ending on the front foot
Heading towards the close, the FTSE 100, thanks to its large contingent of miners, is leading gains in Europe.
The mining sector benefited from a global rebound in commodity prices today.
Having been at an eight-month low earlier, the FTSE 250 is now up 28 points or over 0.1%.
In European markets, the DAX is flat and others are in the green, with the Euro Stoxx 600 up 0.4% (and a reminder that US stock markets are closed today).
"The turmoil in gilts and sterling has understandably caught everyone’s attention, but the FTSE 100 has managed another strong day today," says market analyst Chris Beauchamp at IG.
"Sterling weakness has proven to be a boon once again, and the international nature of many of the index’s members mean there is little read-across from the doom-laden trading in UK-focused assets."
After the pound continued its miserable start to 2025, there has been some tentative buying of the pound, Beuachamp says.
"Markets look to be assuming some kind of fresh fiscal consolidation will be needed to help restore the UK’s position. Comparisons with 2022 are overblown, but are unlikely to disappear in the short-term."
3.40pm: More North American banks quit Mark Carney's greenwashing scheme
Canadian lenders Royal Bank of Canada (TSX:RY) and Bank of Montreal (CSE:BMO) have stated that they are reconsidering their membership in the Net Zero Banking Alliance, also bowing out of the group in line with banks south of the border as Donald Trump comes back to power and their political will bends easily in the shifting political winds.
Climate campaigners said it showed that most lenders had only joined the alliance to make themselves look good.
The NZBA was a global initiative to advance climate action by banks, originally set up by former Bank of Canada and Bank of England governor Mark Carney (who is reportedly looking to replace Justin Trudeau as Canadian PM).
"We told you so," said Richard Brooks, climate finance director at Stand.earth. "RBC and the other Canadian banks entered into the Net Zero Banking Alliance to greenwash their fossil fuel financing and to gain cover under increasing pressure from customers and investors.
"It appears they misled investors about their intentions with the alliance."
While wildfires rage in California, not far from where RBC's City National Bank subsidiary is based, Brooks said "quitting even mediocre climate initiatives is an out of touch move that shareholders, workers, and regulators should pay close attention to".
3.16pm: Govt argues things are being blown out of proportion
The government has fought back against criticism and calls for fiscal U-turns.
A HM Treasury spokesperson issued a statement to media: "No one should be under any doubt that meeting the fiscal rules is non-negotiable and the government will have an iron grip on the public finances.
"UK debt is the second lowest in the G7 and only the OBR’s forecast can accurately predict how much headroom the government has - anything else is pure speculation.
"Kick-starting economic growth is the number one mission of this government as we deliver on our Plan for Change. Over the coming weeks and months, the Chancellor will leave no stone unturned in her determination to deliver economic growth and fight for working people."
2.56pm: Gold hits new record, in GBP
Gold prices have notched a four-week high and a record price for UK investors, as the pound slid against the dollar and gilt yields stand at multi-decade highs.
In sterling gold has reached £2,173 per Troy ounce, and in dollar terms is at $2,675 per oz.
"Because gold pays no interest, it usually falls in price when bond yields rise," says Adrian Ash, BullionVault director of research, noting that similar scenes were last seen in the 1970s.
."Gold rising together with government borrowing costs signals how uneasy the markets are becoming over the UK's budget deficits and long-term debt," he adds.
1.38pm: Brokers' views on Shell, SSE (LON:SSE), National Grid (LON:NG)
Some broker notes moving shares today, include an upgrade for Shell PLC (LSE:LON:SHEL, NYSE:SHEL) that has lifted the oil giant.
UBS has moved Shell to a 'buy' rating, saying its free cash flow has become too compelling to ignore, also upping its share price target to 3,000p from 2,800p.
After a 10% decline in Shell's share price since July, UBS believes the company’s strong financial position and restructuring efforts make it an attractive opportunity in the energy sector.
Elsewhere, Citi has expressed a liking for National Grid PLC and SSE PLC after utilities fell out of favour a little amid the rise in bond yields in the US and UK as competing assets.
Earnings across the sector should be supportive in the next round of updates says Citi, which noted that the European utilities sector is down 3.5% relative to the market in recent weeks.
UBS also upgraded SSE to a 'buy' rating, with its more optimistic outlook to the group's robust growth in its electricity transmission business and the potential upside from its renewable energy projects, including the pivotal Berwick Bank offshore wind farm.
As one of the UK’s leading renewable energy companies, is expected to benefit significantly from structural growth in its transmission segment, the Swiss bank's analysts reckon.
Outside of utilities, Citi retail analysts continued to look for a potential upturn for the luxury sector, which was under pressure for most of last year.
They noted that "US credit card spending across luxury top brands turned positive in December for the first time since June 2022", though the month was likely to have benefited from the later timing of Thanksgiving.
"While the US consumer continues to power ahead, the labour market remains a source of concern. US demand recovery will likely be volatile and uneven this year, particularly with the aspirational clientele. Visibility on global luxury demand improvement scenario remains limited and could trigger further downgrades to sector consensus 2H24/FY25 forecasts."
Among smaller caps, Mears Group PLC was given a glowing report from Peel Hunt (LON:PEEL) and Panmure Liberum after trading exceeded market expectations.
Panmure observed that management-led volumes performed better than forecast and group margins expanded more quickly than it expected.
1.15pm: BT makes big electric van order
BT Group PLC (LSE:LON:BT.A) has given the electric vehicles sector a bit of a boost as it looked to burnish its green credentials by placing an order to double its EV van fleet to around 8,000.
Four manufacturers will supply the 3,600 new vans – Ford, Stellantis (LON:0QXR) (Vauxhall), Toyota (NYSE:TM) and Renault (EPA:RENA) - with delivery staggered over the next two years.
The telco has the second largest commercial fleet in the country with more than 27,000 vehicles and said this order – its largest ever for EVs – is part of a larger one for 6,000 new vans.
12.59pm: Why are so many CFOs quitting?
S4 Capital PLC (LSE:LON:SFOR) finance chief Mary Basterfield is stepping down after more than three years at the ad agency led by Sir Martin Sorrell.
She will continue in the role, working out her 12-month notice period, while a search for her successor is carried out.
This takes the total number of CFO exits to four by UK-listed firms today and 12 across the whole market so far in 2025, with two in the FTSE 100, at Halma (LON:HLMA) and Airtel Africa (LON:AAF), according to an analysis by AJ Bell (LON:AJBA).
Changes at Airtel, S4, Oxford Instruments (LON:OXIG) and TT Electronics include two retirements and two stepping down.
"Although there is no unifying theme across all of the changes, the cynically minded may be inclined to wonder if the chief number crunchers think they know something that the rest of us do not, given the slew of macroeconomic and geopolitical uncertainties which seem to be facing companies as we start the new year," AJ Bell analysts said.
12.15pm: FTSE joined by other European stocks in the green
Gains for most of London's largest blue-chips, led by strong risers from miners, means the FTSE 100 continues to lead European stock markets this morning.
Copper miner Antofagasta PLC (LSE:LON:ANTO), up 4.9%, is top of the leaderboard, followed by iron ore and copper miner Anglo American PLC (LSE:LON:AAL), precious metals producer Fresnillo (LON:FRES) and others across the sector.
M&S is still the biggest faller, now down 7.5% despite its trading statement this morning beating expectations. However, after a 30% surge in the second half of last year, the fall today takes the shares back to where they were in mid-September.
Supermarket J Sainsbury PLC (LSE:SBRY), insurer Admiral, retail property developer Land Securities (LON:LAND) and a group of other retailers are among other fallers.
The FTSE 250 has seen its earlier losses slashed, and the mid-cap index is now down less than 0.2%.
In Europe, Germany's DAX remains in the red, but France's CAC, Spain's IBEX and Italy's MIB are all 0.3% to 0.5% higher.
US stock futures are pointing lower - no wait, the US stock market is closed today for the funeral of former president Jimmy Carter.
11.41am: LA fires still raging
The wildfires currently sweeping across Los Angeles could amount to one of the most expensive natural disasters ever seen in the US.
Estimated damage and economic loss of between US$52 billion and US$57 billion is expected, according to commercial weather forecaster AccuWeather.
Swept by hurricane-force wind, flames have already engulfed areas in Santa Monica and Malibu where the median home value is above US$2 million.
The disaster may become the worst wildfire in modern California history based on the number of structures burned and economic loss, experts said.
11.23pm: Truss demands Starmer stop saying she crashes economy
Liz Truss has reportedly sent the current Prime Minister a cease and desist letter warning him to stop saying she "crashed the economy".
In the election campaign, Labour leader Keir Starmer often said the 49-day former PM crashed the economy, referring to the unfunded tax cuts in the 2022 'mini budget' that sparked a massive sell-off of UK gilts, a run on sterling and forced an intervention from the Bank of England.
In the letter, Truss's lawyers said the remarks are likely to "cause serious harm to her reputation" and are "false and defamatory".
They also suggest that assertions contributed to Truss losing her seat as an MP.
11.11am: Demand for UK bonds remains strong, says Treasury minister
Treasury minister Darren Jones says "this is not austerity" and that the movements in bond markets are fairly normal.
Asked about a jump in government borrowing costs this week, he told parliament: "UK gilt markets continue to function in an orderly way. Underlying demand for the UK debt remains strong.
"It is normal for the price and yields of gilts to vary when there are wider movements in global financial markets."
10.43am: Loss of confidence in UK
The turmoil in the financial markets "implies a massive loss of confidence in the UK government", says market analyst Russ Mould at AJ Bell.
He notes that the 30-year gilt yield briefly hit 5.445%, surpassing the Liz Truss crisis period, and the pound's slump to $1.225 was its lowest against the dollar since the autumn of 2023.
"The feel-good factor around the UK following last summer’s general election has quickly disappeared and turned to gloom as companies brace themselves for higher costs and consumers worry about job security and the cost of living going up again."
He points out that the Chancellor, Rachel Reeves, implied from the start that tough decisions were needed to lay stronger foundations for longer term growth, meaning life could get worse before it gets better.
"The storm clouds have certainly darkened. Investors are worried about extra borrowing by the government to achieve its plans."
However, he says its worth noting that the pound remains considerably stronger than when Truss briefly ran the country.
"The UK is also not alone in seeing a higher cost of borrowing for the government as the US has also seen higher yields," Mould highlights.
The more domestically focused FTSE 250 has fallen more than 4% in the year-to-date and he explains that about half of the index generates earnings in the UK compared to about a quarter or less for the FTSE 100.
"That explains why the FTSE 100 managed to shrug off the doom and gloom to rise 0.3% to 8,277. Commodity producers led the way, helping to offset a shocking day for UK retailers."
10.07am: The 'Great British peso' strikes again
Citi FX strategist Daniel Tobon has the pound (or the "Great British peso" as he calls it) in his sights, like many currency traders in recent days.
"A combination of UK fiscal concerns and a broader sell-off in fixed income has seen UK gilt yields surge in recent days, while weighing on the GBP (which is reacting more like an EM currency than a DM currency to rising term premium)," he says.
He thinks the risks of a Truss-like budget crisis are "low", especially given the liability driven investment (LDI) funds have been recapitalised.
However, the ideal timing and levels for getting back into GBP longs (ie buying the pound again) remain unclear, Tobon says.
He says he awaits one of three signals before becoming more bullish on GBP: global fixed income yields peaking, a UK policy announcement "to temper markets or a reversal in sentiment around fiscal concerns", or a move towards £0.85 for EUR/GBP "where risk/reward is more attractive for shorts".
But he sees "low certainty" on the first scenario in the short-term and says it is "premature" for the other two, which may not realise.
9.49am: Greggs Q4 disappoints, 2025 prices rises expected to handle rising costs
The Greggs PLC (LSE:GRG) update has seen its shares crumble 10% to the lowest since October 2023.
Analyst Darren Shirley at Shore Capital says the year-end statement "is softer than our expectations" as it reflects what the company calls "more subdued" high street footfall.
This shows, says Shirley, that "even the strongly value-orientated Greggs not immune from the gloom surrounding large element of the UK retail scene outside grocery".
LFL sales growth of 5.5% for the year was below the Shore Cap forecast of 7% as trading in the final quarter was "the softest Greggs has reported for some time" and meant the sales figure of £2.01 billion was short of the £20.3 billion consensus forecast.
But Shirely says he does not anticipate changing forecasts for 2024 and expects to leave medium-term forecasts unchanged, looking for 2025 EPS of 147.5p.
He notes that higher employment costs will feed into further overall cost inflation, but that price increases have been implemented across the product portfolio at the start of the year, with sausage roll prices (outside London and franchisees) raised by >8% to 130p.
9.33am: B&M misses expectations badly
B&M's report was weaker than expected, says Deutsche Bank (ETR:DBKGn) analyst Adam Cochrane.
Group sales growth of 2.6% for the third quarter was around a 4% miss versus the consensus forecast, he says.
The most important element, UK LFL sales fell 2.8%, which was "materially below" expectations as he had forecast a 0.5% decline and the consensus was looking for a 0.5% rise.
This was a sequential deceleration from a 1.9% decline in Q2 despite an easier comparative in the third quarter the year before.
"The main issue for B&M has been a negative UK LFL, although management has reiterated the focus on investing in pricing to drive volume-led growth with an estimated circa 3 percentage point gap between value and volume, and although 3Q was weak the exit run rate is better and may suggest 3Q is the trough."
He expected the share weakness today to be on the lack of UK LFL progress outweighing the announcement of an "already expected" special dividend.
9.09am: Footsie is top dog, but pound is sick as a dog
After an hour of trading the FTSE 100 is top dog in Europe, up 0.6%.
London's blue-chip index is being lifted by gains for miners, with Antofagasta, Anglo American, Rio Tinto (LON:RIO), Fresnillo and Glencore (LON:GLEN) among the top risers, with Shell and BP (LON:BP) doing some work too.
M&S is the biggest faller, down 5.3%, followed by Admiral, Sainsbury's (LON:SBRY) and Primark owner AB Foods (LON:ABF).
Losses for the FTSE 250 have also been trimmed, with the mid-cap index now down 72 points or 0.4%.
European indices are pretty much flat.
The pound is still weak, down 0.65% versus the USD at $1.228 and down 0.6% against the EUR.
"The UK’s fiscal position continues to look perilous as we start trading on Thursday. The relentless rise in UK yields has continued but at a slower pace," says market analyst Kathleen Brooks at XTB.
"UK gilt yields have risen once more at the open, the 10-year yield opened higher by 5 bps, although yields have recovered slightly as we progress through the morning.
"However, the UK bond market is once again underperforming the rest of Europe," she says, following the sharp bond sell-off earlier in the week that sent yields higher.
There could be further downside to come, although it’s likely to be a fairly quiet session later, as the US stock market will be closed for the funeral of former President Jimmy Carter, whilst bond markets are also closing early.
Brooks says the sell off in bonds "is a warning shot from the bond vigilantes", with the UK reliant on investors to fund its deficit.
"The UK is not unique in needing this, however, the US can fund its deficit more easily because the USD is the reserve currency, and the Eurozone as a whole runs a surplus.
"Since the market’s focus so far in 2025 has turned to the sustainability of public sector finances, the UK is understandably in the firing line."
8.46am: M&S given good review
While M&S shares are down 6%, analysts are positive on the trading update.
Jonathan Pritchard at Peel Hunt says the "3Q print was highly impressive and we expect that consensus should rise as a consequence".
"Management is very modest about its achievements but this is strong performance on strong performance."
These main two areas both outperformed market hopes, and International sales were "solid enough", he says.
"The shares were, to a degree, discounting a good showing but after the expected upgrades they are only on a very low double-digit multiple. To us that is too low and we increase our target price from 450p to 500p."
8.32am: B&M reports lower like-for-like sales
More detail on B&M European Value Retail (LSE:BME) too, where despite announcing a 15p-per-share special dividend, the discounter reported that LFL sales in its UK arm dropped 2.8% in the 13 weeks to 28 December.
On the plus side, LFL sales were positive in the last few weeks of the past month, a trend that has continued into this year.
Total (EPA:TTEF) sales in its third quarter rose 2.6% and for the nine months so far by 3.3% with higher volumes of Christmas confectionery, toys and decorations helping the total.
Its shares are down 8.5% now.
8.22am: Greggs sales slow, warns on high street outlook
Greggs PLC (LSE:GRG) shares have dropped 10% now after it reported slower sales in the final quarter of last year and cautioned that high street growth had slowed recently due to the subdued economy.
CEO Roisin Currie said "lower consumer confidence continues to impact High Street footfall and expenditure" but argued that the chain's value-for-money offer and the quality of its offering "position us well to meet the headwinds we expect to see in the year ahead".
LFL sales rose 5.5% over 2024 but slowed to 2.5% in the final quarter due to lower high street footfall.
Total sales rose by 11.3% to £2.1 billion as 145 new shops opened on a net basis but slowed to 7.7% in the final three months.
8.13am: London stocks falls
The FTSE 100 and FTSE 250 have both opened lower, led by falls for Marks and Spencer (LON:MKS) Group PLC and discounter B&M European Value Retail SA (LSE:BME) after their festive trading updates.
Initial trades saw the London blue-chip index drop six points, though it has recovered slightly, while the mid-cap index plunged over 180 points or 0.9%.
Shares in B&M dropped 8.2% as sales growth in the past quarter was lower than the year to date.
M&S shares fell 6.1% despite reporting strong growth of 6.4%, which seemed better than expectations.
Greggs is down 8% too, more on them in second.
7.54am: Pound slump
Amid all the retail reporters, it's worth pointing out that the pound has slumped to its lowest against the dollar since 2023.
This morning, GBP/USD is down another 0.7% to $1.2269 - the sort of levels last seen in October two years ago.
UK bond yields remain elevated this morning.
In stock and bond markets it had been expected to be a fairly quiet session today, as the US stock market will be closed for the funeral of former President Jimmy Carter, whilst bond markets are also closing early.
7.43am: M&S sustains good form over Xmas
Over at Marks and Spencer Group PLC (LSE:MKS), like-for-like sales growth was even stronger, up 6.4% for the UK and RoI.
Food LFL sales were up 8.9% in the 13 weeks to 28 December, while Clothing, Home & Beauty gained 1.9%.
CEO Stuart Machin says M&S “sustained trading momentum” and broke its own sales records across the business, with Food recording its biggest day and general merch seeing its biggest online week.
“The external environment remains challenging, with cost and economic headwinds to navigate, but there is much within our control,” he adds, saying transformation of the group “is a marathon, not a sprint, and we go into 2025 shifting up a gear and raring to go as we accelerate the scale and pace of change”.
7.37am: Tesco hails biggest Christmas
Tesco PLC (OTC:TSCDY) (LSE:TSCO) said its full-year profit and cashflow targets remained unchanged after a recording its largest ever Christmas.
The UK’s largest supermarket group says like-for-like sales swelled 3.8%, as demand grew in the six weeks to January in the UK, Ireland, Central Europe and for its Booker wholesale arm.
LFLs for the UK and Ireland rose 3.7% in the festive period, up from 2.8% in the fiscal third quarter, with the UK alone seeing festive LFL sales accelerate to 4.1% from 3.8% in the third quarter.
In his statement, boss Ken Murphy hails Tesco reaching its highest market share since 2016, which he said was driven by further improvement in customer satisfaction and investment in “value, quality and service” that has positioned the grocer as the cheapest among the non-discounters for the past two years.
7.16am: FTSE 100 to open higher on Thursday
The FTSE 100 should continue to plod higher on Thursday as bond markets settle and a raft of retailers issue trading statements on how they did over the key festive period.
On the futures market, the London index has been called 27 points higher ahead of the open, having added almost six points yesterday to finish at just over 8,251.
Overnight, trading in New York was mixed, with the Nasdaq Composite index falling marginally and the small-cap Russell 2000 down 0.5%, but the S&P 500 adding 0.2% and the Dow Jones 0.25%.
Continuing bond market shockwaves were blamed, even if US yields reversed back earlier declines to be broadly unchanged on the day.
This morning in Asia, stocks indices are all in the red, led by the Nikkei's 0.9% fall, with Shangai down 0.5% after in line inflation numbers from China.
5am: Thursday's big company updates to look out for
A busy Thursday will see retailers focus once again as investors await to hear how the vital Christmas trading period panned out.
M&S is widely expected to have enjoyed a bumper Christmas... Read more
Tesco's update will provide further clarity on retailers' key Christmas period... Read more
B&M and Greggs will also be in focus on a busy Thursday... Read more
Announcements due:
Trading updates: B&M European Value Retail SA (LSE:BME), Greggs PLC (LSE:GRG), Hilton Food Group PLC, Marks and Spencer Group PLC (LSE:MKS), Sig (LON:SHI) PLC, Tesco PLC (LSE:TSCO), Unite Group (LON:UTG) PLC
US earnings: Walgreens Boots Alliance (NASDAQ:WBA) Inc, Constellation Brands Inc (NYSE:STZ), Infosys (NS:INFY) Ltd
AGMs: Serinus Energy PLC
Economic announcements: Continuing Claims (US), Initial Jobless Claims (US), Wholesale Inventories (US)
Ex-dividends to reduce FTSE 100 by: 1.75