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Stocks in London were in the green on Monday, amid renewed hopes for peace in Ukraine, but declines in defence sector shares kept a lid on gains, and weighed on Paris. Also supporting investor morale were dovish remarks from New York Federal Reserve President John Williams. ‘I still see room for a further adjustment in the near term,’ to move the policy stance closer towards neutral, Williams said late last week. The FTSE 100 index rose 10.32 points, 0.1%, to 9,550.03. The FTSE 250 added 58.37 points, 0.3%, at 21,421.74, and the AIM All-Share was 0.94 of a point higher, 0.1%, at 736.58. The Cboe UK 100 was up 0.2% at 954.22, the Cboe UK 250 was 0.5% higher at 18,572.39, but the Cboe Small Companies was down 0.3% at 17,104.50. The White House said Sunday that talks in Switzerland on a proposal to end the Ukraine war marked a ‘significant step forward,’ and reaffirmed that any eventual deal would ‘fully uphold’ the war-wracked country’s sovereignty. A joint US-Ukraine statement released minutes later by Washington said: ‘As a result of the discussions, the parties drafted an updated and refined peace framework.’ US Secretary of State Marco Rubio led a US delegation that met with Ukrainian and European officials in Geneva on Sunday to try to thrash out a plan for ending the conflict, which began in February 2022 with Russia’s invasion of Ukraine. US President Donald Trump had given Ukraine until November 27 to approve his controversial plan to end nearly four years of fighting. In Paris, the CAC 40 was down 0.1%, while the DAX 40 rose 0.2%. Keeping a lid on the CAC 40, Thales fell 2.3% and Safran lost 2.0% as defence stocks struggled. Rheinmetall gave back 4.2% in Frankfurt, while in London, Babcock and BAE each declined 2.1%. Conversely, iron ore pellet maker Ferrexpo, which operates in Ukraine, shot up 21%. JPMorgan Emerging Europe, Middle East & Africa Securities rose 9.2%. The firm invests in the Middle East, Africa and ‘emerging Europe’, including Russia. Sterling rose to $1.3095 early Monday afternoon, from $1.3084 at the time of the London equities close on Friday. The euro perked up to $1.1543 from $1.1501, while against the yen, the dollar rose to JP¥156.83 from JP¥156.69. ‘The euro advanced on Monday as improved geopolitical sentiment supported risk appetite. Negotiators from the US and Ukraine signalled meaningful progress toward a refined peace framework. Talks in Geneva were described as ’highly productive,’ which could support a more positive sentiment for European markets. The constructive tone gave the euro a lift, reflecting expectations of reduced geopolitical risks in Europe,’ Naga analyst Frank Walbaum commented. ‘Still, the currency’s upside remains constrained by fiscal and political uncertainty in France.’ France’s lower house almost unanimously rejected the income section of the budget bill on Saturday, throwing more uncertainty onto whether the divided parliament can pass an austerity budget by year’s end. The UK fiscal situation remains in focus. Ebury analst Matthew Ryan commented: ‘We saw a fairly dismal set of UK economic data releases leading into this week’s critical budget release. Last week’s CPI report provided news of a welcome easing in price pressures, although the main measure of inflation remained closer to 4% than 3%. Retail sales for October also disappointed, and the PMIs of business activity stalled in November as sentiment in the services sector plunged, partly amid budget uncertainty. All eyes now turn to Wednesday’s budget announcement itself. ‘It’s unclear if there will be enough room to raise taxes sufficiently to reach the required £25-30 billion shortfall, with the government reportedly ruling out hiking income tax rates and seemingly unable to cut fiscal expenditure.’ The yield on the US 10-year Treasury faded to 4.05% around midday UK time on Monday from 4.07% at the time of the London equities close on Friday. The 30-year yield was slimmer at 4.69% from 4.71%. In New York, the Dow Jones Industrial Average is called down 0.1%, the S&P 500 up 0.2% and the Nasdaq Composite up 0.4%. A barrel of Brent rose to $62.38 early Monday afternoon, from $62.15 at the time of the London equities close on Friday. Gold fell to $4,070.63 an ounce from $4,073.57. In London, Standard Chartered added 2.6% as Morgan Stanley raised the stock to ’overweight’. Morgan Stanley made Barclays its top pick in European banking. Barclays rose 1.6%. Elsewhere in London, S4 Capital fell 8.6%. It warned that profit for the year will be below consensus. The advertising agency now sees 2025 like-for-like net revenue falling by just under 10%. It had previously predicted an upper-single-digits fall. ‘Despite the cost actions we have already taken this year, this decline in net revenue will impact our operational earnings before interest, tax, depreciation and amortisation,’ S4 added. It now sees operational Ebitda at £75 million for 2025, below market expectations of £81.6 million. S4 said: ‘This is mainly as a result of lower project-based revenue, continued client caution and a slower ramp up of our new business wins than expected.’ Net revenue in 2024 amounted to £754.6 million, slumping 14% on a reported basis and down 11% like-for-like. Its operational Ebitda amounted to £87.8 million in 2024, so it expects a fall of around 15% this year. BHP fell 0.3%, while Anglo American edged up 0.1%. BHP drew a line under its pursuit of Anglo American, potentially once and for all, clearing the path for the FTSE 100 listing’s tie-up with Teck Resources. The Melbourne, Australia-based miner BHP said it held preliminary discussions with the board of Anglo but decided not to proceed further with a possible combination. It will now focus on its own ‘compelling potential’ and ‘organic growth strategy’. For Anglo American, it is one fewer potential disruptor of its plans to merge with Canada’s Teck Resources. Anglo is set to seek shareholder approval for the Teck merger on December 9 during its general meeting. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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