London close: Stocks finish lower amid US-Russia talks
By Josh White
Date: Tuesday 18 Feb 2025
(Sharecast News) - London stocks closed lower on Tuesday, reversing earlier gains as investors digested the latest UK employment figures and monitored US-Russia peace talks.
The FTSE 100 index edged down 0.02% to 8,766.73 points after a choppy session, while the FTSE 250 declined 0.27% to 20,881.56 points.
In currency markets, sterling was last down 0.19% on the dollar to trade at $1.2601, while it gained 0.18% against the euro, changing hands at €1.2065.
"Despite mostly lower Asian stock indices, European stocks continue to perform as fund managers still rotate out of overvalued US mega stocks into cheaper European ones," said IG senior technical analyst Axel Rudolph.
"German investor morale posting its largest increase in two years and New York state business activity rebounding in February helped boost sentiment as US investors return from their Presidents' Day holiday.
"Pared back US Fed rate cut bets have led to a rise in 10-year Treasury notes to above the 4.5% mark, putting pressure on US indices."
Rudolph noted that crude prices remained bid as the US and Russia agreed on four principles following Ukraine-Russia peace talks in Saudi Arabia.
"Gold and silver prices extend their gains but the price of copper continues to drop sharply from last week's nine-month high and falls by over two percent."
UK wage growth picks up in December quarter
In economic news, UK wage growth accelerated in the three months to December, while the unemployment rate remained steady, according to fresh data from the Office for National Statistics.
The jobless rate held at 4.4%, defying expectations for a slight increase to 4.5%.
Average earnings, including bonuses, rose 6% year-on-year, up from 5.5% in November.
Wage growth excluding bonuses reached 5.9%, the fastest pace in eight months, reflecting continued tightness in the labour market.
The figures also revealed an estimated 819,000 vacancies in November 2024 to January 2025, down by 9,000 from August to October 2024.
"The labour market continues to cool. Vacancies have fallen again, marking the 31st consecutive quarterly decline, and the unemployment rate is steady at 4.4%," said Adam Deasy, economist at PwC.
"Movements are slight, but the demand for workers is softening.
"Pay growth remains elevated, with annual growth of regular pay at 5.9%, the fastest level in eight months."
Across the Atlantic, US housebuilder sentiment weakened in February as rising mortgage rates and affordability concerns weighed on the sector.
The National Association of Home Builders' housing market index fell to 42 from 47 in January, marking a five-month low.
Measures of current sales conditions, future sales expectations, and buyer traffic all declined, with the latter dropping to 29, suggesting waning demand.
Meanwhile, manufacturing activity in New York State rebounded unexpectedly.
The Empire State manufacturing index jumped 18 points to 5.7 in February, reversing January's negative reading and exceeding market expectations.
New orders and shipments surged, while price pressures continued to build, with the prices paid index hitting its highest level in nearly two years.
Despite the improvement, future business optimism weakened, with firms expressing caution about the outlook.
Further afield, Australia's central bank cut interest rates for the first time since the onset of the Covid-19 pandemic, but signalled a cautious approach to further easing.
The Reserve Bank of Australia lowered its key cash rate by 25 basis points to 4.1%, citing progress on inflation.
However, governor Michele Bullock warned that risks remained, particularly in the labour market and inflation outlook.
The decision came ahead of a federal election due by May, where economic conditions were expected to be a central issue for voters.
HSBC rises ahead of results, BT Group in the red
On London's equity markets, HSBC Holdings was among the top gainers, rising 1.91% ahead of its annual results on Wednesday.
Mining stocks also advanced, with Antofagasta up 0.55% after reporting an 11% increase in full-year EBITDA, and said copper demand remained strong.
Glencore gained 0.9% after Morgan Stanley upgraded the stock to 'overweight,' naming it its top pick in the sector.
John Wood Group surged 12.44%, rebounding from sharp losses in the previous sessions following a weak trading update last week.
Assura rose 2.31% after rejecting a £1.6bn takeover bid from US-based private equity firm KKR.
Hollywood Bowl Group added 3.3% after launching a £10m share buyback programme, having received shareholder approval at its January annual meeting.
On the downside, BT Group fell 2.9% after Citi downgraded the stock to 'sell' from 'buy,' citing revenue pressures at its Openreach unit.
Airtel Africa also weakened, losing 2.65%, following a downgrade to 'neutral' from 'buy' by the same broker.
InterContinental Hotels Group dropped 4.56% despite reporting higher full-year profits, increasing its dividend, announcing a $900m share buyback, and acquiring the Ruby brand for $116m.
Australian miner BHP Group declined 1.1% as it cut its dividend and reported a steep drop in half-year profits, with weaker Chinese iron ore demand offsetting higher copper earnings.
Plus500 fell 4.82% despite announcing a $110m share buyback alongside strong full-year results.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 8,766.73 -0.01%
FTSE 250 (MCX) 20,881.56 -0.27%
techMARK (TASX) 4,791.81 0.22%
FTSE 100 - Risers
HSBC Holdings (HSBA) 898.10p 1.91%
GSK (GSK) 1,443.00p 1.66%
Vodafone Group (VOD) 66.38p 1.47%
Rolls-Royce Holdings (RR.) 644.40p 1.42%
NATWEST GROUP (NWG) 445.20p 1.41%
CRH (CDI) (CRH) 8,696.00p 1.28%
Barclays (BARC) 308.20p 1.25%
St James's Place (STJ) 1,147.00p 1.24%
Standard Chartered (STAN) 1,138.50p 1.20%
Glencore (GLEN) 353.55p 0.90%
FTSE 100 - Fallers
InterContinental Hotels Group (IHG) 10,160.00p -4.72%
Sainsbury (J) (SBRY) 251.00p -3.98%
Tesco (TSCO) 382.30p -3.70%
Marks & Spencer Group (MKS) 347.00p -3.21%
Airtel Africa (AAF) 138.80p -2.94%
BT Group (BT.A) 147.15p -2.90%
Mondi (MNDI) 1,286.50p -2.50%
Kingfisher (KGF) 250.50p -2.30%
SSE (SSE) 1,463.50p -2.24%
JD Sports Fashion (JD.) 83.98p -2.17%
FTSE 250 - Risers
Wood Group (John) (WG.) 29.10p 12.44%
Future (FUTR) 1,006.00p 3.87%
Chemring Group (CHG) 360.50p 3.74%
Hochschild Mining (HOC) 191.80p 3.23%
North Atlantic Smaller Companies Inv Trust (NAS) 3,760.00p 2.73%
QinetiQ Group (QQ.) 402.60p 2.70%
Diversified Energy Company (DEC) 1,312.00p 2.34%
Assura (AGR) 43.48p 2.31%
Babcock International Group (BAB) 648.00p 2.21%
Vesuvius (VSVS) 423.00p 1.94%
FTSE 250 - Fallers
Ferrexpo (FXPO) 101.80p -6.43%
Plus500 Ltd (DI) (PLUS) 2,726.00p -4.82%
Trainline (TRN) 346.00p -3.41%
Watches of Switzerland Group (WOSG) 537.50p -3.33%
Pennon Group (PNN) 456.60p -3.02%
Wizz Air Holdings (WIZZ) 1,625.00p -2.93%
Me Group International (MEGP) 223.50p -2.83%
SThree (STEM) 258.00p -2.65%
Tate & Lyle (TATE) 553.50p -2.55%
Ocado Group (OCDO) 304.90p -2.49%
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