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London’s FTSE 100 was virtually unchanged on Monday afternoon, underperforming European peers which registered confident gains at the start of a key week of economic data and monetary policy decisions. The FTSE 100 index fell just 1.48 points to 9,281.81. The FTSE 250 rose 109.08 points, 0.1%, at 21,734.48, and the AIM All-Share was up 2.09 points, 0.3%, at 770.53. The Cboe UK 100 was down 0.1% at 930.30, the Cboe UK 250 was up 0.7% at 19,083.15, while the Cboe Small Companies was flat at 17,192.72. In Paris, the CAC 40 was 1.1% higher. In Frankfurt, the DAX 40 was 0.4% higher. French stocks shook up Fitch Ratings downgrading France’s credit rating from AA- to A+. The pound rose to $1.3608 on Monday afternoon, from $1.3551 at the time of the London equities close on Friday. The euro climbed to $1.1756 from $1.1719. Versus the yen, the dollar faded to JP¥147.32 from JP¥147.83. The yield on the 10-year US Treasury ebbed to 4.06% from 4.08%. The yield on the 30-year was at 4.68% from 4.70%. In New York, the Dow Jones Industrial Average is called up 0.2%, the S&P 500 and Nasdaq Composite are called up 0.1%. The Federal Reserve announces a rate decision on Wednesday, the week’s main event. It is the turn of the Bank of England on Thursday. ‘The Fed will almost certainly deliver a 25bp rate cut on Wednesday to lower the target range for its funds rate from 4.25-4.50% to 4.00-4.25%. The crucial point in our view is whether the Fed frames this cut as a reactive response or a proactive move. Is the Fed easing its stance because it fears a future collapse in the labour market, or because recent downward revisions to nonfarm payrolls revealed that the labour market already needs rate cuts? If Fed Chair Jerome Powell’s press conference, the Fed statement or the September economic projections point to the latter, then the Fed would implicitly suggest that it has acted ’too late’ and fallen behind the curve a reactive cut,’ Berenberg analyst Atakan Bakiskan commented. ‘Such a scenario could push the market to price in more rate cuts than the 75bp for the rest of the year and 150bp by end-2026 that is currently priced in.’ The BoE is expected to stand pat, but there is some UK data on the horizon before its decision. Ebury analyst Enrique Diaz-Alvarez commented: ‘This week’s data deluge will go a long way towards clarifying the state of the UK economy. We expect that the jobs data and inflation report will confirm that the UK is in the middle of a stagflationary process, with inflation remaining far above Bank of England targets while the labour market continues to slow. ‘The Bank of England will keep rates unchanged on Thursday, as it continues to place greater emphasis on the inflation overshoot than the cooling in Britain’s jobs market. We are bracing for a 7-2 vote, and forward guidance that acts to dampen expectations for cuts during the remainder of the year.’ A barrel of Brent fell to $67.02 on Monday afternoon from $67.52 at the time of the London equities close on Friday. Gold faded to $3,642.81 an ounce from $3,644.61. In London, Sainsbury’s shares rose 4.7%. It has ended its talks to sell Argos to Chinese e-commerce firm JD.com. It said talks had collapsed as JD.com’s terms and commitments are ‘not in the best interests of Sainsbury’s shareholders, colleagues and broader stakeholders’. It comes just 24 hours after announcing it was seeking a deal that could ‘accelerate Argos’ transformation’. In a statement on Sunday, Sainsbury’s said: ‘Following the media speculation on 13 September regarding discussions between J Sainsbury PLC (Sainsbury’s) and JD.com Inc (JD.com) about a potential sale of Home Retail Group Limited (Argos), JD.com has communicated that it would now only be prepared to engage on a materially revised set of terms and commitments which are not in the best interests of Sainsbury’s shareholders, colleagues and broader stakeholders.’ It said it still expects to achieve around £1 billion in retail underlying operating profit and more than £500 million in retail free cash flow in the 2025/26 financial year. BT was down 2.9%. It has entered a ‘relationship agreement’ with existing shareholder Bharti Global, with two representative of the latter being added to the telecommunications firm’s board. Sunil Bharti Mittal and Gopal Vittal are to join the BT board as non-independent non-executive directors with effect Monday. ‘We’re delighted to welcome Sunil and Gopal to the Board of BT. They bring significant experience and global perspectives in the telecoms industry, and we look forward to their contribution to the board and to the future success of BT Group,’ BT Chair Adam Crozier said. Under the terms of a relationship agreement, Bharti is allowed to nominate two people to the BT board for as long as it owns 20% or more of the London listing. If it owns at least 10%, it can nominate one. In August of last year, Bharti Global struck a deal to acquire just under 25% of BT from Altice. Also putting pressure on the FTSE 100, its largest constituent AstraZeneca was down 3.0%, the worst performer. It has paused a planned £200-million expansion of its research site in Cambridge, eastern England, in the latest blow for inward investment in the UK. It follows the company in January abandoning plans to build a £450-million vaccine plant in northwest England and comes days after US pharma group Merck & Co dropped plans to build a $1.4-billion research centre in Britain. AO World jumped 12%, the best FTSE 250 performer. It expects annual profit at the top half of its guidance range, as it ‘continues to perform strongly’. The electricals retail reported that group revenue in the first half to September 30 is expected to rise 13% on-year. B2C Retail revenue is expected to increase by 11%, it added. AO World still expects annual double-digit B2C growth but now expects adjusted pretax profit between £45 million and £50 million, the bottom end of its range lifted from £40 million. In addition, it announced its first-ever buyback, ‘given the group’s strong cash generation and the board’s ongoing confidence in its future performance’. AO World will buy back up to £10 million in shares. It reports half-year results on November 25. S4 Capital slumped 13% as the advertising firm announced another cut to its annual forecast amid ‘continued wider market uncertainty’. The firm, however, reported that it will consider ‘an enhanced final dividend for 2025’ if trading improves in the second half. ‘Market conditions in the first half of 2025 reflect the continuing impact of, to say the least, volatile global macroeconomic conditions along with the unsettling effect of tariff negotiations. As a result, clients remain generally cautious given the uncertainty, with technology clients, which account for almost half our revenue, in particular, continuing to prioritise capital expenditure on expanding AI capacity. Our Technology Services Practice faced longer sales cycles and continued to be affected by a reduction in one of our larger relationships, although this will cycle out in the second half of the year,’ Executive Chair Martin Sorrell said. ‘We expect an improved net revenue performance in the second half of the year, aided by the phasing of revenue from new business, particularly from General Motors, Amazon, T-mobile and a leading US-based FMCG and seasonality.’ It now expects a like-for-like net revenue decline of mid-single digits for 2025, its outlook cut from a low single digits fall. It still expects an operational Ebitda ‘broadly similar to 2024’. Its target range for net debt at the year-end remains at £100 million to £140 million. S4 Capital added: ‘The board will consider approving an enhanced final dividend for 2025, if the improved second half performance and liquidity targets are delivered.’ Copyright 2025 Alliance News Ltd. All Rights Reserved.
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