- FTSE 100 up 92 points at 8265
- Precious metals stocks glisten
- Banks take hit as interest rates expected to tumble
4pm: Strong start for London index
The FTSE 100 is heading for a stonking start to 2025, with gains of 95 points or 1.1% as we head into the final half hour of trading at the first London session of the year.
Precious metals miners, led by Endeavour Mining PLC (LSE:LON:EDV), are topping the blue-chip leaderboard on the back of continued optimism about the strength in gold prices persisting on into the new year.
Marks and Spencer Group PLC (LSE:LON:MKS) is also up almost 4% as investors look forward optimistically to its trading update next week, following recent industry data that indicated the festive period was a good one for the high street food and clothing chain (see our preview here).
Other miners and commodities groups, plus a mix of financials and defensives makes up the top risers today.
Oil price rose towards a two-month high, with Brent up over 2% to over $76, its highest in two months,
"Optimism regarding China's economic recovery following the country's President Xi Jinping's New Year speech and a drop in US inventories spurred the advance," said market analyst Axel Rudolph at IG.
3.27pm: Factors boosting gold
There are three "important factors" that could send the gold price higher in 2025, says market analyst Naeem Aslam at Zaye Capital Markets.
Firstly, Donald Trump returning to the White House on 20 January is "likely to put pressure on the Fed to cut rates further as he is an advocate of a lower interest rate environment", says Aslam.
Secondly, the returning president seems certain to reheat his trade war, which "means that economic growth may suffer and geopolitical uncertainties may anchor", which "may make some investors rethink the dollar as the safe haven currency", which could bring more demand for gold.
"Thirdly, we are in a period where most investors will reallocate money to their portfolios, and this means that we could potentially see some new money following the shining metal’s price given its performance for the past two years and also due to potential geopolitical tension driven by trade policies," he adds.
Fellow market commentator Kenny Polcari at Slatestone Wealth notes that similar US political factors are at play for gold and bitcoin, as well as some other cryptos.
Bitcoin gained around 150% to end the year in the $95k range while ethereum gained 53% ending the year in the $3500 range.
"Both are expected to surge again this year as enthusiasts are excited about the potential opportunity that the new administration presents.
"Gold rallied 21% on the back of rising geo-political tensions, inflation worries and a lot of central bank buying. Calls for $3000 gold by year end 2025 are all the rage….it will be the same factors that drive the action."
2.45pm: US open not entirely smooth
US stocks opened 2025 higher but the Nasdaq has already dropped into the red.
The S&P 500 is up 0.1% and the Dow Jones has climbed 0.4% in the first 10 minutes of trading.
But the Nasdaq Composite after starting on the front foot, has turned tail and dropped 0.15%, with Tesla down 3.3% as one of the key drags.
Meanwhile, the FTSE 100 is charging higher, gaining almost 80 points or just under 1%.
2.24pm: Tesla set to reverse after missed deliveries
A popular pick for many UK investors in recent years, Tesla Inc (NASDAQ:TSLA) shares are set to fall around 4% when the first Wall Street trading of 2025 begins shortly, after quarterly delivery numbers from the Elon Musk-run company were short of Wall Street forecasts.
Deliveries reached 495,570 units in the fourth quarter of last year, which was a record high, but missed analyst expectations of 506,800.
Fourth-quarter deliveries of Model 3/Y EVs numbered 471,930, which was below the Street estimate of 484,575, while other models were slightly higher than expected at 23,640.
For the whole of 2024, Tesla made 1.77 million EVs and delivered 1.79 million.
1.58pm: Wall Street to start higher
Wall Street stocks have been tipped to start 2025 in a positive manner on Thursday, after jobless claims fell to an eight-month low and ahead of Tesla delivery numbers.
Futures markets predicted the Nasdaq 100 to lead the way, up almost 1%, with S&P 500 futures yp 0.8% and Dow Jones futures up 0.7%.
Earlier, initial jobless claims fell to 211,000 for the week ending December 28, the Labor Department said, below the previous week's 219,000 that was revised up to 220,000 and below the average estimate 221,000.
Continuing claims for the week ending December 21 fell to 1844K from 1910K revised down to 1896K, and below the forecast 1890K.
Also of note across the pond, Tesla's fourth-quarter delivery data will be due at 9am.
Back home, the FTSE 100 is up almost 60 points now, around 0.7%, while in Europe the DAX is up 0.2% but the CAC-40 and IBEX 35 both remain in the red.
12:50pm: Fresnillo and Endeavour well bid
Precious metals stocks glistened with Mexican silver producer Fresnillo PLC (LSE:LON:FRES) and Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) occupying positions one and three on the Footsie gainers list (up 2.6% and 1.9% respectively).
Is this a bet that gold prices will pick up in 2025 where they left off in '24? Possibly, yes.
Spot gold climbed 0.4% on to $2,633.38 per ounce, while US gold futures ticked up 0.2%.
Last year saw the yellow metal dazzle with a 27% gain — its best annual showing since 2010 — buoyed by Federal Reserve rate cuts, central bank buying sprees, and rising geopolitical tensions.
The precious metal’s momentum has analysts betting big. Goldman Sachs (NYSE:GS) forecasts prices could hit a glittering $3,000 per ounce by year-end, driven by ongoing rate reductions, geopolitical instability, and strong central bank demand.
Closer to home, UK gold prices echo the global rally, reflecting both international market moves and sterling shifts.
The gold rush is alive and well — investors are digging in.
11:17am: Banks under pressure after poll
A poll of economists by The Times, which reckons the Bank of England will cut interest rates four times this year (rather than just two that the market expects), has placed the UK banking stocks on the back foot.
The equation is simple: lower loan costs directly feed through to net interest margins for high street operators, which would start to fall.
Barclays PLC (NYSE:BCS) (LSE:BARC) led the loser board with a 2.6% fall, followed by HSBC and Standard Chartered (LON:STAN).
10.27am: Manufacturing sector should improve in 2025
On the manufacturing PMI, economist Elliott Jordan-Doak at Pantheon Macroeconomics says the reading is consistent with official UK manufacturing output falling by 1.1% on a three-month-on-three-month basis.
"What’s more, the forward-looking sub-indices of the manufacturing PMI fell again in December, pointing to a weak growth outlook for the manufacturing sector," he says.
However, he notes that input and output price balances were both revised downwards from the 'flash' release figures mid-month, which was one bright spot.
And despite the manufacturing weakness in December, he thinks that it will "steadily improve" in 2025.
"Businesses have been rocked by domestic policy changes in the form of NICs hikes, and external shocks in the form of the threat of a global trade war.
"But, the Budgetary plans are for more spending than taxation, which will mechanically lift the PMI. What’s more the focus on investment in the Budget should help the manufacturing sector."
The Bank of England is also expected to cut rates in 2025 (two times, the market forecasts), which will reduce borrowing costs for firms and "should boost sentiment".
9.54am: Manufacturing jobs cuts due to government policy and input prices rising
The downturn in the UK manufacturing sector deepened at the end of 2024, says S&P, with contraction worsening in output, new orders and employment.
Reasons for this were given as destocking from clients, subdued market confidence and operational restructuring in response to forthcoming legislative changes, which led to many companies continuing to cut costs.
"A stalling domestic economy, weak export sales and concerns about future cost increases led to the steepest contraction of UK manufacturing production for almost a year in December," said Rob Dobson at S&P Global Market Intelligence.
"Manufacturers are facing an increasingly downbeat backdrop.
"Business sentiment is now at its lowest for two years, as the new government's rhetoric and announced policy changes dampen confidence and raise costs at UK factories and their clients alike."
He said this was "sending a winter chill through the labour market", with the sharpest cuts to staffing levels since February, with some companies acting to restructure operations in advance of the rises in employer National Insurance and minimum wage levels in 2025.
"Global market conditions are also providing a growing headwind, with export sales hit by lower demand from Europe, Asia and the US."
Price gauges also edged higher, reflecting rising transportation, labour and material costs.
9.33am: UK manufacturing PMI falls to 11-month low
UK manufacturing output last month contracted more than expected, according to the S&P Global PMI survey just out, which printed at 47.0, the worst in 11 months.
As well as being further below the 50 mark that indicates growth from declines, dropping from 48.0 the month before, it was also worse than the 47.3 that the market expected.
9.28am: Looking forward
As we begin 2025, all investors are thinking about what’s going to happen and if any changes are needed to their portfolios.
"But don’t expect to get many clues today from the first trading day of the year," says Deutsche Bank (ETR:DBKGn)'s Henry Allen.
For the last four years, the first trading day has been a "contrarian indicator", he points out, with the S&P 500 ending the year in the opposite direction it moved on the first day, such as a year ago, when we started with three daily declines in a row but the index ended the year up more than 20%.
"As we look forward to the year ahead, it’s also worth remembering that none of the last 5 years have exactly gone to plan or consensus in the macro sphere."
In terms of what the year ahead might bring, Allen flags the inauguration of Donald Trump on January 20 as well as the new session of Congress, which begins tomorrow with a Republican majority in both the House of Representatives and the Senate.
"So for markets and the economy, a big question will be how the new administration moves on new tariffs, and which countries they’re focused on [...and...] an open question as to whether various deals might be reached with other countries to avoid higher tariffs, or whether they’ll get imposed, which in turn opens up the risk of retaliatory tariffs in response.
"So there’s the potential for a significant shift in global trade patterns, and we know from Trump’s first term that markets can be very reactive to any tariff news."
He also flags German federal elections in February and central banks meetings ahead, including the first of the year from the US Federal Reserve at the end of January, and the Bank of England on 6 February, with further cuts signalled but inflation still lingering slightly above the 2% targets.
"So it’s going to be interesting to see if we do get the additional rate cuts that markets are pricing in, or whether this will be another year (as with the last three) where market expectations prove to be too dovish."
8.53am: Into the red
The FTSE 100 is now in the red, down below 8,170 again.
Joining banks in dragging the index down, B&Q owner Kingfisher PLC (LSE:LON:KGF) is now the biggest faller, 1.1% lower.
Others on the slide include wealth management group St James (LON:SJP)'s Place PLC and a few industrial names, including Intertek Group PLC (LSE:LON:ITRK) and Melrose Industries (LON:MRON) PLC (LSE:MRO, OTC:MLSPF), all down around 0.9%.
The FTSE 250 mid-cap index is also lower, down 0.2%, with engineers also leading the retreat, including Goodwin PLC (LSE:GDWN) and Spectris PLC (LSE:LON:SXS).
Looking across to Europe, the Dax is flat, the CAC-40 is down 0.4% and the IBEX 35 is down 0.1%.
The Euro STOXX 600 is down 0.1%, with the main fallers being Spanish bank BBVA (BME:BBVA) down 2.9%, followed by German semiconductor equipment group Aixtron (ETR:AIXGn), French video games maker Ubisoft (EPA:UBIP) Entertainment, carmaker BMW and payment firm Adyen (AS:ADYEN).
8.32am: Banks weighing
Some banks are among the fallers on the FTSE this morning, with Barclays PLC (LSE:LON:BARC) the worst performer, down just over 1%.
HSBC Holdings PLC (LSE:LON:HSBA) and Natwest (LON:NWG) Group PLC are also there or thereabouts, down 0.9% and 0.7%, while Standard Chartered PLC (LSE:STAN) is down 0.4% and Lloyds (LON:LLOY) is flat.
Not sure exactly what this is about but thought worth noting and hopefully illumination will appear soon.
8.20am: Housing market dynamics
While this morning's Nationwide data showed that house price inflation continued to gain momentum at the back end of the year and indications are that further gains are likely, affordability is not likely to improve much this year, says economist Elliott Jordan-Doak at Pantheon Macroeconomics.
He noted that forward-looking indicators of prices suggest that house price inflation will accelerate over the year ahead, with the RICS survey consistent with year-over-year growth in house prices of around 5%.
But looking at the path for Bank of England borrowing costs, with the overnight swaps market upon which mortgages are priced having "bounced around" since the Budget in October and the US election in November, current pricing "suggests that affordability will barely improve between now and the end of 2025, which will keep a lid on demand over the year ahead", he says.
"We expect the average quoted 75% LTV 2-year fixed rate mortgage interest rate to stay around 4.6% in 2025.
"But, we think the MPC will cut three times this year, more than the market is currently priced for. This should lead to borrowing costs falling for mortgagors, boosting demand."
8.10am: FTSE starts higher
The FTSE 100 has opened higher as expected, rising 25 points or 0.3% to 8,198 in the first few minutes of trading in 2025.
Miners, including Glencore PLC (LSE:LON:GLEN) and Anglo American PLC (LSE:LON:AAL), are leading the early charge.
This is despite the official China manufacturing data earlier, which showed the sector slowing, with output falling and new orders slipping. Gloomy data from the People's Republic often weighs on London's mining shares.
Precious metals miner Fresnillo PLC (LSE:FRES) is top of the leaderboard early doors, as gold and silver prices move higher.
Housebuilders, including Berkeley (LON:BKGH) and Barratt Redrow (LON:RDW) are also among the risers, helped by the Nationwide data earlier.
7.59am: Vodafone completes €8 billion Italy sale
More business has been sewn up at the start of the year, with Vodafone Group PLC (LSE:LON:VOD) completing the sale of its Italian arm for €8 billion (£6.6 billion) in cash.
The mobile telecoms group, which last year sealed the deal to merge its UK business with Three, says it plans to use the cash to pay down its huge debt pile and complete a further €2 billion (£1.66 billion) share buyback once its current one is done and dusted.
Swisscom (SIX:SCMN) is the buyer of the Italian business and as part of the deal, the pair have agreed for Vodafone to continue to provide certain services to Vodafone Italy for a period of up to five years, which will see the FTSE 100 listed company receive an annual charge estimated at €350 million for the first year.
Elsewhere, Ricardo PLC (LSE:LON:RCDO) completed the sale of its defence business for US$85 million (£67.5m).
It now expects to conclude the acquisition of E3 Advisory shortly, which is expected to accelerate its transformation to become a strategic and engineering consultancy in environmental and energy-transition services.
7.54am: Revolution pays sum to settle Chrysalis tiff
Revolution Beauty Group PLC (AIM:REVB) has agreed a settlement with investment trust Chrysalis Investments Ltd (LSE:CHRY) over allegations made by the make-up firm's former shareholder last year.
Revolution says it had agreed to pay "a non-material sum" to Chrysalis to settle the dispute "without any admission of liability by either party".
Chrysalis had taken a near-£40 million hit in late 2022 when it sold a £5.7 million stake in Revolution, bought the previous year for £45.0 million.
7.42am: Wood gets a bit more than expected
In company news, John Wood Group (LON:WG) PLC has completed the sale of its stake in rotating equipment business Ethos (NS:ETHO) Energy for a slightly higher final net cash sum of $138 million (£110 million).
The final price for Wood's stake in the 51%-owned subsidiary was above the expected $137 million, with the FTSE 250-listed company explaining that buyer One Equity Partners paid a bit more in cash rather than the planned split of cash and loan notes.
7.26am: House prices to keep rising before stamp duty changes
The UK housing market finished 2024 with prices strengthening, according to data out this morning from Nationwide Building Society (LON:NBS).
House prices were up 4.7% year-on-year in December, improving from the 3.7% increase in November - though prices were still just below the all-time high recorded in summer 2022.
On a monthly basis, which is seasonally adjusted, prices rose 0.7%, adding to the 1.2% gain the month before.
Looking forward, Robert Gardner, Nationwide's chief economist said upcoming changes to stamp duty are "likely to generate volatility, as buyers bring forward their purchases to avoid the additional tax. This will lead to a jump in transactions in the first three months of 2025 (especially in March) and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous stamp duty changes".
7.18am: FTSE 100 tipped to start higher
The FTSE 100 has been tipped to start higher on the first trading day of the new year, as investors the world over wonder what's in store for 2025, starting with manufacturing PMI data today.
On futures markets, the London benchmark has been called 18 points higher, having finished at just over 8,173 at the end of last year after gaining 451 points or around 5.9% over the 52 weeks.
US stocks retreated again on new year's eve, in what analysts noted was somewhat of a risk-off move since Christmas, with the S&P 500 losing ground for four consecutive sessions for the first time since September. driven by tech stock losses as the Magnificent 7 dropped over 5%.
This morning, Asian markets are mixed, mostly down, with weak data not helping matters as China’s Caixin manufacturing PMI came in softer than expected for last month, which could hit London's mining shares when the market open.
The Hang Seng and Shangai indices are both down over 2%, while the Nikkei is down almost 1%, though India's Sensex is up 1.3%.
Other macroeconomic data to look out for today for the UK includes Nationwide house prices and the PMI data later in the morning.