London midday: FTSE extends losses; ECB eyed
By Michele Maatouk
Date: Thursday 06 Mar 2025
(Sharecast News) - London stocks had fallen further by midday on Thursday, weighed down by some disappointing corporate results and a number of large names going ex-dividend.
The FTSE 100 was down 0.9% at 8,674.26.
Russ Mould, investment director at AJ Bell, said: "The FTSE 100 slumped on Thursday despite mining stocks enjoying strong gains on hopes of a reprieve on tariffs and expectations China will launch a big stimulus package.
"The UK's flagship index was dragged lower as several big names traded without the right to their next dividend and some corporate results disappointed.
"News that Donald Trump is temporarily sparing carmakers from US tariffs on Canada and Mexico helped reinforce hopes there may be some flexibility in the new administration's trade policy.
"Later today the European Central Bank is expected to cut rates having been given a freer hand as inflationary pressures have eased."
European indices were also in the red, with the exception of Germany's DAX, which was up 0.5%.
Scope Markets analyst Joshua Mahony said: "The DAX continues to lead the way in Europe, continuing its impressive run higher as increased fiscal spending lifts growth prospects.
"With the German coalition taking shape, the prospect of a ramp-up in government spending does stand in stark contrast to the US where huge DOGE cost-cutting efforts provide the basis for economic weakness while they wait for the private sector growth to make up the shortfall."
Investors were looking ahead to the last policy announcement from the European Central Bank due at 1315 GMT amid expectations of a 25 basis points reduction to interest rates.
On home shores, a survey out earlier showed that activity in the construction fell to its lowest level in February in nearly five years.
The S&P Global construction purchasing managers' index fell to 44.6 from 48.1 in January, coming in below the 50.0 mark that separates contraction for the second month in a row. It was also the lowest reading since May 2020.
Activity in residential building fell for the fifth month in a row and was the weakest-performing segment, with the index printing at 39.3. Survey respondents cited weak demand conditions, headwinds from elevated borrowing costs and a lack of new work to replace completed projects.
Activity in civil engineering also fell steeply, with the index coming in at 39.5 in February. Commercial construction showed a degree of resilience, however, with output levels falling only marginally and at a similar pace to that seen in the previous survey period. The index was 49.0 in February.
Tim Moore, economics director at S&P Global Market Intelligence, said: "Sharply declining order books rippled through the UK construction sector in February, which led to accelerated reductions in output volumes, employment and input buying. Weak demand conditions were attributed to entrenched caution among clients, against a backdrop of subdued consumer confidence and lacklustre economic performance.
"Aside from the pandemic, total industry activity decreased at the steepest pace since December 2019. This was led by considerable reductions in residential building and civil engineering work, while a degree of resilience was reported for commercial construction activity. Survey respondents widely cited a lack of new work in the house building segment, due to soft market conditions and the impact of elevated borrowing costs.
"Construction companies remain optimistic overall about their growth prospects for the next 12 months, albeit less so than on average in 2024 amid increasing concerns about the broader UK economic outlook. The were also signs that rising payroll costs and purchasing prices have become a source of anxiety, with the latest increase in overall business expenses the steepest since March 2023."
In equity markets, HSBC, Rio Tinto, Berkeley Group and LondonMetric all lost ground as they traded without entitlement to the dividend.
Melrose Industries slumped even as it said that full-year profit came in at the top end of expectations despite industry-wide supply chain issues.
Rentokil Initial fell as it reported a drop in full-year profit, citing a "challenging" year and a weaker performance in North America.
Spire Healthcare tumbled as it posted full-year adjusted operating profit of £149.4m, which was below expectations of just over £157m, and warned of looming headwinds from upcoming increases to wages and National Insurance.
Harbour Energy and Lancashire also fell after results.
On the upside, Schroders rose to the top of the FTSE 100 as it announced a plan to deliver £150m of annualised cost savings alongside its full-year results.
Insurer Admiral jumped as it hiked its dividend and posted a surge in full-year profit, attributing much of the strength to its UK motor business.
Ladbrokes owner Entain advanced as it reported full-year earnings in line with expectations and said it was well placed for 2025.
Reckitt Benckiser reversed earlier losses to trade up as the consumer goods firm unveiled plans for a reorganisation of its divisions and said it was looking at opportunities for Mead Johnson Nutrition after a mixed 2024, as fourth-quarter sales missed estimates.
Grafton rallied as it posted a full-year adjusted operating profit that slightly exceeded analysts' expectations, despite a decline from the prior year.
ITV rose as the broadcaster reported a jump in full-year profits thanks in part to record profits at its production unit, ITV Studios.
Market Movers
FTSE 100 (UKX) 8,674.26 -0.93%
FTSE 250 (MCX) 20,094.47 -0.17%
techMARK (TASX) 4,821.30 -0.24%
FTSE 100 - Risers
Schroders (SDR) 409.00p 7.57%
Admiral Group (ADM) 3,064.00p 5.62%
Reckitt Benckiser Group (RKT) 5,380.00p 3.74%
WPP (WPP) 626.00p 2.59%
Antofagasta (ANTO) 1,862.50p 2.31%
Entain (ENT) 755.40p 1.78%
Glencore (GLEN) 326.40p 1.71%
Kingfisher (KGF) 253.40p 1.64%
Barclays (BARC) 308.20p 1.57%
Prudential (PRU) 756.00p 1.29%
FTSE 100 - Fallers
Melrose Industries (MRO) 605.00p -11.03%
Rentokil Initial (RTO) 364.80p -5.98%
HSBC Holdings (HSBA) 886.80p -4.48%
LondonMetric Property (LMP) 174.60p -3.91%
London Stock Exchange Group (LSEG) 10,950.00p -3.78%
Informa (INF) 791.20p -3.51%
Marks & Spencer Group (MKS) 363.90p -3.37%
Compass Group (CPG) 2,629.00p -3.35%
3i Group (III) 3,760.00p -2.59%
Pearson (PSON) 1,303.50p -2.40%
FTSE 250 - Risers
RHI Magnesita N.V. (DI) (RHIM) 3,840.00p 10.82%
Grafton Group Ut (CDI) (GFTU) 870.00p 5.80%
ITV (ITV) 73.35p 5.39%
Victrex plc (VCT) 990.00p 4.65%
QinetiQ Group (QQ.) 511.50p 3.63%
Fidelity China Special Situations (FCSS) 272.00p 3.23%
Ashmore Group (ASHM) 149.10p 2.62%
Raspberry PI Holdings (RPI) 588.00p 2.53%
Ninety One (N91) 143.90p 2.42%
Aston Martin Lagonda Global Holdings (AML) 88.00p 2.33%
FTSE 250 - Fallers
Spire Healthcare Group (SPI) 189.60p -15.55%
Harbour Energy (HBR) 190.35p -11.05%
Lancashire Holdings Limited (LRE) 582.00p -6.28%
Ithaca Energy (ITH) 126.80p -6.07%
Energean (ENOG) 927.00p -4.38%
Quilter (QLT) 155.00p -3.73%
HICL Infrastructure (HICL) 108.80p -3.20%
Diversified Energy Company (DEC) 929.50p -2.77%
SSP Group (SSPG) 157.50p -2.72%
Foresight Environmental Infrastructure Limited (FGEN) 72.00p -2.70%
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