London midday: FTSE steady as defence stocks slump
By Michele Maatouk
Date: Monday 01 Dec 2025
(Sharecast News) - London stocks were steady by midday on Monday, with markets in risk-off mode as investors mulled an uninspiring reading on the UK manufacturing sector, with defence names under the cosh amid Ukraine peace hopes.
The FTSE 100 was flat at 9,717.50.
Russ Mould, investment director at AJ Bell, said: "Further selling in cryptocurrencies reflected a risk-off mood as did some volatility in Asian markets - with Japan's Nikkei 225 seeing material weakness.
"This followed a move higher for the yen, which affects the competitiveness of Japan's export-heavy economy, on speculation the Bank of Japan might increase interest rates this month. US futures also pointed to a lower open on Wall Street later.
"Elsewhere, there are still hopes the Federal Reserve might announce a rate cut at its upcoming meeting. Inflation and unemployment data releases on the roster for this week will be closely monitored as the market tries to get a read on the Fed's thinking ahead of 10 December.
"Oil prices ticked higher as traders reacted to Donald Trump's comments around Venezuela and potential military action and after producers' cartel OPEC+ stuck to its plan of pausing increases in oil output.
"Amid the sabre rattling, gold was also higher, helping to lift precious metals miners Fresnillo and Endeavour Mining."
Investors were digesting the latest survey out of China, which showed that manufacturing activity unexpectedly deteriorated in November.
The RatingDog China general manufacturing purchasing managers' index fell to 49.9 from 50.6 in October. This was below the 50.0 mark that separates contraction from expansion and signalled the first deterioration in manufacturing sector conditions since July, albeit marginal. Analysts were expecting a reading of 50.5.
The slowdown was attributed to a softening in the pace of new order growth to a near-neutral level. Where new business rose, survey respondents indicated that this was due to the introduction of new products and improvements in overseas demand. New export orders expanded at the quickest pace in eight months amid reports of successful business development efforts.
On home shores, a survey showed the manufacturing sector returned to growth in November..
The S&P Global manufacturing purchasing managers' index rose to a 14-month high of 50.2 from 49.7 in October. This was the first reading above the 50.0 mark that separates contraction from expansion since September 2024.
The latest survey was conducted between 12 and 25 November, closing before the Autumn Budget.
S&P Global said manufacturers benefited from improved domestic demand and a softer contraction in new export work.
Rob Dobson, director at S&P Global Market Intelligence, said: "The numbers are especially encouraging as this improvement occurred despite November seeing elevated levels of business uncertainty, and in some cases an element of gloom, ahead of the Autumn Budget.
"The lifting of this uncertainty caused by the long lead-in to the Chancellor's budget announcement should hopefully provide a boost in December, but it will be interesting to see the extent to which business might react to the absence of any significant growth-promoting measures. After all, despite the improvement in the performance of the manufacturing sector, any growth is still worryingly weak.
"Rising competitive pressures and slower cost inflation meanwhile led to factory gate prices being cut for the first time in over two years. This combination of soft industrial performance and subsiding price pressures will add to the shift in policy debate away from inflation fears towards supporting economic growth."
Separately, figures from the Bank of England showed that mortgage demand eased slightly in October, with net mortgage approvals for house purchase down to 65,018 from 65,647 in September.
Approvals for remortgaging fell by 3,600 to 33,100, which was the lowest since February 2025.
Net borrowing of mortgage debt by individuals fell back to £4.3bn in October, after a rise to £5.2bn in September.
In equity markets, precious metals miner Fresnillo and gold miners Hochschild and Endeavour all shone as gold and silver prices rose, while miners Glencore, Anglo American and Antofagasta pushed higher in tandem with copper prices.
Aerospace firm Melrose Industries slumped as it said its chief financial officer Matthey Gregory is to step down. Melrose said Gregory has informed the board he plans to retire in 2026, two years after taking up the role.
He will be replaced by Ross McCluskey, a vice president at testing and inspection specialist Intertek Group.
Defence firms were under pressure, with BAE Systems, Rolls-Royce and Babcock all lower after US Secretary of State Macro Rubio said talks between US and Ukrainian officials on Sunday had been "productive".
Trig fell sharply after its multi-billion merger with HICL Infrastructure was abandoned due to widespread opposition from shareholders.
HICL said in a brief statement that the proposed combination, first announced in mid-November, "will not proceed".
"Both boards remain convinced of the strategic rationale for the combination," it said. "However, following broad engagement with shareholders, the HICL board determined that it cannot progress the transaction without a substantial majority of support from its own investors."
HICL was among the top gainers on the FTSE 250.
Market Movers
FTSE 100 (UKX) 9,717.50 -0.03%
FTSE 250 (MCX) 21,970.22 -0.88%
techMARK (TASX) 5,540.69 -0.56%
FTSE 100 - Risers
Fresnillo (FRES) 2,768.00p 5.09%
Glencore (GLEN) 369.45p 2.40%
Reckitt Benckiser Group (RKT) 5,984.00p 2.26%
Anglo American (AAL) 2,907.00p 1.96%
Burberry Group (BRBY) 1,159.00p 1.71%
Rentokil Initial (RTO) 421.90p 1.37%
Antofagasta (ANTO) 2,792.00p 1.23%
Unilever (ULVR) 4,599.00p 1.21%
Rio Tinto (RIO) 5,478.00p 1.03%
Imperial Brands (IMB) 3,241.00p 1.03%
FTSE 100 - Fallers
Melrose Industries (MRO) 566.20p -4.84%
BAE Systems (BA.) 1,610.00p -2.45%
Rolls-Royce Holdings (RR.) 1,043.00p -2.34%
Babcock International Group (BAB) 1,108.00p -2.21%
3i Group (III) 3,097.00p -1.93%
BT Group (BT.A) 177.55p -1.88%
Land Securities Group (LAND) 594.00p -1.82%
WPP (WPP) 298.60p -1.71%
Barratt Redrow (BTRW) 387.70p -1.70%
St James's Place (STJ) 1,369.50p -1.69%
FTSE 250 - Risers
Hochschild Mining (HOC) 427.00p 5.96%
Plus500 Ltd (DI) (PLUS) 3,322.00p 4.66%
HICL Infrastructure (HICL) 118.20p 4.42%
Greggs (GRG) 1,620.00p 3.85%
Discoverie Group (DSCV) 610.00p 3.04%
Endeavour Mining (EDV) 3,574.00p 2.41%
Patria Private Equity Trust (PPET) 619.00p 2.31%
Wetherspoon (J.D.) (JDW) 695.50p 1.31%
GCP Infrastructure Investments Ltd (GCP) 72.60p 1.11%
Aston Martin Lagonda Global Holdings (AML) 64.35p 0.94%
FTSE 250 - Fallers
Unite Group (UTG) 504.00p -4.55%
Investec (INVP) 524.50p -4.03%
IP Group (IPO) 62.10p -3.87%
The Renewables Infrastructure Group Limited (TRIG) 71.50p -3.64%
Ceres Power Holdings (CWR) 357.60p -3.56%
PPHE Hotel Group Ltd (PPH) 1,866.00p -3.12%
Empiric Student Property (ESP) 73.00p -3.05%
Bridgepoint Group (Reg S) (BPT) 274.80p -2.90%
AEP Plantations (AEP) 1,385.00p -2.81%
Mitchells & Butlers (MAB) 280.50p -2.77%
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