London close: Stocks higher amid Korean political turmoil
By Josh White
Date: Tuesday 03 Dec 2024
(Sharecast News) - London's equity markets closed higher on Tuesday as upbeat sentiment in the retail and travel sectors buoyed investors, with the world's attention on sudden political instability in South Korea.
The FTSE 100 index rose 0.56% to end the session at 8,359.41 points, while the FTSE 250 gained 0.6% to finish at 20,892.74 points.
In currency markets, sterling was last up 0.04% on the dollar to trade at $1.260, while it dipped 0.04% against the euro, changing hands at €1.2049.
South Korean president Yoon Suk Yeol made an unscheduled broadcast late in the evening in Seoul, declaring martial law.
Commentators suggested it was an undemocratic move by Yoon to fend off his political opponents in a parliament he lost control of earlier this year.
"European stock indices followed their Asian counterparts higher with the DAX 40 surpassing the 20,000 mark for the first time in its history and even the beleaguered CAC 40 trading slightly higher despite the almost certain collapse of France's caretaker government due to a no-confidence vote by both right and left leaning political parties later this week," said IG senior analyst Axel Rudolph.
"US indices gingerly retreated from their lofty heights, though, after South Korean president Yoon Suk Yeol declared martial law in response to opposition efforts to impeach him.
"US stocks with exposure to South Korea declined on the news but regained some of their losses as the leader of his own ruling party said that the president's actions are unconstitutional and must not be supported."
Rudolph noted that the Korean won still tumbled to a more-than-two-year low.
"On the data front, US job openings beat expectations ahead of Friday's closely watched non-farm payrolls.
"South Korea's sudden political instability led to an around 2% rise in the oil price due to supply concerns as traders were already buying the black gold ahead of this week's OPEC+ meeting at which continued output cuts are expected to be announced.
"While the silver price rose by around a percentage point, the gold price flatlined."
UK retail sales slump in November, Korea plunges into political turmoil
In economic news, retail sales in the UK suffered a sharp decline in November, reflecting the impact of the later timing of Black Friday on consumer spending.
According to the BRC-KPMG retail sales monitor, sales fell 3.3% year-on-year in the four weeks ended 23 November, a significant drop compared to the three-month average of -0.1% and the 12-month growth average of 0.5%.
Food sales offered a modest silver lining, rising 2.4% year-on-year over the three-month period, though still below the 12-month average growth of 3.7%.
Non-food sales continued to decline, slipping 2.1% over the same period, while online non-food sales plummeted 10.3% in November, reflecting reduced demand and lower online penetration rates compared to last year.
"While it was undoubtedly a bad start to the festive season, the poor spending figures were primarily down to the movement of Black Friday into the December figures this year," said Helen Dickinson, chief executive officer of the British Retail Consortium.
"Even so, low consumer confidence and rising energy bills have clearly dented non-food spending.
"Spending on fashion was particularly weak as households delayed purchases of new winter clothing, while health spending was boosted by the season's arrival of coughs and colds."
Across the Atlantic, job openings in the US rose unexpectedly in October, with the Bureau of Labor Statistics reporting 7.74 million available positions, up from 7.37 million in September and surpassing forecasts of 7.48 million.
Gains were led by professional and business services, accommodation and food services, and information sectors, while federal government openings declined.
Regionally, job openings surged in the South and West but dropped in the Northeast and Midwest.
Despite the rise in openings, hires and separations remained steady, indicating ongoing tightness in the US labour market.
Meanwhile, South Korea plunged into political and social turmoil as president Yoon Suk Yeol declared martial law, citing threats from North Korea and accusing the opposition of undermining national security.
Tanks reportedly lined the streets, and social media captured heightened tensions, but the declaration faced swift rejection from the country's parliament, which voted against the measure.
The crisis coincided with budget deliberations for the coming financial year, further complicating South Korea's political landscape.
EasyJet climbs on upgrades, Direct Line continues to edge lower
On London's equity markets, easyJet climbed 2.85% after brokerages Morgan Stanley, Barclays and Peel Hunt raised their price targets, reflecting increased confidence in the airline's prospects.
Oil majors BP and Shell advanced by 1.72% and 1.71%, respectively, as oil prices rose ahead of the anticipated OPEC+ meeting later this week.
Ashtead Group gained 1.27% after RBC Capital Markets upgraded its rating to 'outperform' and raised its price target, citing optimism over the US economy.
Mid-cap performers included DiscoverIE Group, which surged 15.79% after reporting a resilient first-half performance and affirming full-year guidance.
Victrex added 13.94% despite a drop in annual profits, buoyed by optimism around a solid start to fiscal 2025.
Upper Crust and Ritazza owner SSP Group rallied 9.62% on strong full-year results, driven by solid performances in North America, the UK, and other regions.
Meanwhile, Paragon Banking Group rose 6.62% after announcing a 27% jump in full-year profits and unveiling a new buyback program.
On the downside, Currys dropped 2.47% after Deutsche Bank downgraded the stock to 'hold' from 'buy,' citing concerns over cost inflation and spending trends.
Property group Derwent London slid 0.67% after its acquisition of the remaining stake in a key project on London's Baker Street failed to impress.
Direct Line Insurance Group edged down 0.69%, continuing to ease following last week's sharp gains linked to a rejected takeover bid by Aviva.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 8,359.41 0.56%
FTSE 250 (MCX) 20,892.74 0.60%
techMARK (TASX) 4,724.06 0.59%
FTSE 100 - Risers
Marks & Spencer Group (MKS) 400.20p 3.54%
easyJet (EZJ) 564.80p 3.29%
Rolls-Royce Holdings (RR.) 591.40p 3.21%
Centrica (CNA) 130.00p 3.01%
Fresnillo (FRES) 666.00p 2.86%
Rightmove (RMV) 664.20p 2.37%
AstraZeneca (AZN) 10,790.00p 2.24%
Kingfisher (KGF) 255.00p 2.20%
Pershing Square Holdings Ltd NPV (PSH) 3,912.00p 2.19%
Antofagasta (ANTO) 1,752.00p 2.16%
FTSE 100 - Fallers
BT Group (BT.A) 156.70p -2.61%
British American Tobacco (BATS) 2,946.00p -1.80%
Schroders (SDR) 309.00p -1.78%
SSE (SSE) 1,748.00p -1.55%
Standard Chartered (STAN) 965.80p -1.23%
Berkeley Group Holdings (The) (BKG) 4,112.00p -1.15%
Sage Group (SGE) 1,299.50p -1.14%
Prudential (PRU) 642.40p -1.11%
Aviva (AV.) 478.10p -1.06%
Convatec Group (CTEC) 234.40p -1.01%
FTSE 250 - Risers
Discoverie Group (DSCV) 731.00p 15.96%
Victrex plc (VCT) 1,004.00p 14.48%
SSP Group (SSPG) 177.70p 9.62%
Paragon Banking Group (PAG) 797.00p 6.62%
Auction Technology Group (ATG) 563.00p 5.04%
Hochschild Mining (HOC) 225.00p 4.90%
Aston Martin Lagonda Global Holdings (AML) 109.70p 4.48%
OSB Group (OSB) 408.00p 3.82%
Trainline (TRN) 420.00p 3.81%
Just Group (JUST) 153.40p 3.65%
FTSE 250 - Fallers
Foresight Group Holdings Limited NPV (FSG) 396.00p -2.94%
Currys (CURY) 79.00p -2.10%
Bellway (BWY) 2,470.00p -1.98%
Ocado Group (OCDO) 306.80p -1.88%
Syncona Limited NPV (SYNC) 102.40p -1.35%
Bluefield Solar Income Fund Limited (BSIF) 95.00p -1.35%
Man Group (EMG) 206.00p -1.25%
Crest Nicholson Holdings (CRST) 169.60p -1.17%
TP Icap Group (TCAP) 264.50p -1.12%
Raspberry PI Holdings (RPI) 364.40p -1.09%
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