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The FTSE 100 closed little changed on Monday with renewed hopes for US rate cuts offset by caution ahead of Wednesday’s UK budget. BBH analyst Elias Haddad said: ‘Fed funds futures raised odds of a December 10 rate cut from roughly 35% to as high as 70% following Williams’ comments...Williams noted: ’I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral.’ ‘According to Williams ’the downside risks to employment have increased as the labour market has cooled, while the upside risks to inflation have lessened somewhat.’ Fed Chair Jay Powell and Williams are generally aligned on policy, with Williams serving as a key voice for the Fed’s institutional stance.’ The FTSE 100 index closed down 4.80 points, 0.1%, at 9,534.91. The FTSE 250 ended up 48.21 points, 0.2%, at 21,411.58, and the AIM All-Share closed up 1.52 points, 0.2%, at 737.16. The Cboe UK 100 was up 0.2% at 954.37 and the Cboe UK 250 was 0.6% higher at 18,580.10, but the Cboe Small Companies was down 0.5% at 17,064.28. On the FTSE 100, Persimmon ended 2.1% higher after Goldman Sachs started coverage of UK housebuilders generally with a ‘constructive outlook’. It started Persimmon with a ’buy’ rating and price target of 1,446 pence. The broker gave Berkeley a ’sell’ rating with a price target of 3,714p, and it ended down 0.5%. Goldman Sachs forecast earnings per share growth acceleration of 8%, 10% and 19% for 2025, 2026 and 2027 respectively for the wider sector, and said this is not ‘fully captured’ in current valuations. ‘While there is some overhang ahead of the UK budget, we see potential for this to be a clearing event, bring back focus to positively inflecting housing economic indicators (private starts, mortgage & transaction volumes) and falling mortgage rates into 2026 as the [Bank of England] cuts interest rates, helping affordability,’ analysts at Goldman said. UK Chancellor Rachel Reeves is expected to add some £48 million for 350 new planners to boost government efforts to build 1.5 million new homes, PA reported on Monday. On the FTSE 250, shares in Taylor Wimpey were down 0.3% while Bellway shares lost 0.4%, after Goldman Sachs assigned a ’neutral’ rating for both with price targets of 109p and 2,844p respectively. Vistry rose 4.5%, after Goldman Sachs assigned a ’buy’ rating with a target price of 731p. Vistry is the largest player in affordable housing, and Goldman said it is ‘well placed’ to capitalise and drive volumes through its partners and increased grant funding. DSW Capital, on AIM, closed up 10%. The professional services under Dow Schofield Watts and DR Solicitors brands said its pretax profit more than doubled to £237,000 in the six months that ended September 30 from £100,000 a year before, as revenue multiplied to £2.8 million from £1.1 million. The big increases in the top and bottom lines follows the acquisition of DR Solicitors in November last year. DSW declared an interim dividend of 1.2 pence per share, up 20% from 1.0p a year before, noting that it has £2.2 million cash in the bank. ImmuPharma dropped 31%. The London-based specialist drug discovery and development company said it has extended the time-frame for completing a partnership deal for its lead asset P140 to 2026, from the end of 2025. It has been engaging in discussions with potential partners since October. These range in size and scope, including a number of top ten global pharmaceutical companies, ImmuPharma said. The company expects completion of a P140 deal ‘as soon as practicable’ in 2026, having previously said its objective was to complete a deal by the end of 2025. In European equities on Monday, the CAC 40 in Paris closed down 0.3%, while the DAX 40 in Frankfurt ended up 0.6%. Germany said Monday that Russia has to be present at talks on ending the Ukraine war as Europe and Kyiv pressed for more work on a US proposal seen as heavily favouring Moscow. Ukrainian, American and European officials met in Switzerland on Sunday to draft an ‘updated’ plan after a 28-point proposal tabled by Washington on ending the Russian invasion was decried as an effective capitulation by Kyiv. At an EU-Africa summit in Angola, where emergency talks on the US proposal completely overshadowed proceedings, German Chancellor Friedrich Merz said that Russia must be involved in any talks. ‘The next step must be: Russia must come to the table,’ Merz declared. ‘If this is possible, then every effort will have been worthwhile.’ US President Donald Trump initially gave Ukraine’s President Volodymyr Zelensky until Thursday to respond to the plan that would see Ukraine give up territory it controls, cap the size of its army and permanently close the door on NATO membership. Merz threw doubt on Trump’s deadline, saying discussions would be a ‘lengthy, long-lasting process’. ‘I don’t expect a breakthrough this week,’ he added. EU chiefs hailed progress towards a deal but also said there were outstanding issues to resolve. ‘While work remains to be done, there is now a solid basis for moving forward,’ commented European Commission President Ursula von der Leyen. The pound was quoted higher at $1.3104 at the time of the London equities close on Monday, compared to $1.3084 on Friday. ‘Chancellor of the Exchequer Rachel Reeves will be approaching her second Budget with memories of the upset in financial markets caused by September 2022’s mini-Budget still fresh in her mind, but she also has to appease voters and consumers while sticking to manifesto promises on tax and international commitments to increase defence spending,’ AJ Bell’s Russ Mould commented. ‘Healthy gains in the FTSE 100 and the absence of tremors in sterling suggest that stock and currency markets are happy enough with their lot, and Labour’s influence over it. ‘But an increase in the benchmark 10-year gilt, or government bond, yield means the chancellor will have to be careful when she delivers her speech and latest fiscal policy package on Wednesday.’ The euro stood higher at $1.1525 on Monday, against $1.1501 on Friday. Against the yen, the dollar was trading up at JP¥156.91 compared to JP¥156.69. Stocks in New York were higher. The Dow Jones Industrial Average was up 0.3%, the S&P 500 index up 1.1%, and the Nasdaq Composite up 1.9%. Texas manufacturing activity picked up sharply in November, even as broader business sentiment weakened and employment held flat, according to the latest Texas manufacturing outlook survey published by the Federal Reserve Bank of Dallas. The survey’s production index, the key gauge of manufacturing conditions in the state, surged 15 points to 20.5, signalling a strong acceleration in output growth. The new orders index climbed back into positive territory at 4.8 points, from -1.7 in October. But executives were gloomier about overall business conditions. The general business activity index deteriorated to -10.4 from -5.0, the lowest in several months, while the company outlook index slipped to -6.3. Although outlook uncertainty eased slightly, it remained elevated at 15.7 points. The yield on the US 10-year Treasury was quoted at 4.05%, narrowing from 4.07%. The yield on the US 30-year Treasury was quoted at 4.69%, narrowing from 4.71%. Brent oil was quoted at $62.90 a barrel at the time of the London equities close on Monday, up from $62.15 late Friday. Gold was quoted at $4,097.64 an ounce, up against $4,073.57. The biggest risers on the FTSE 100 were Fresnillo, up 208.00p at 2,498.00p, Endeavour Mining, up 132.00p at 3,294.00p, easyJet, up 16.60p at 480.40p, Standard Chartered, up 46.50p at 1,606.50p, and Polar Capital Technology Trust, up 12.00p at 445.00p. The biggest fallers on the FTSE 100 were BAE Systems, down 61.00p at 1,652.00p, Airtel Africa, down 8.90p at 296.10p, Marks & Spencer, down 8.60p at 324.50p, SSE, down 48.00p at 2,128.00p, and Diageo, down 36.39p at 1,731.61p. On Tuesday’s economic calendar is German gross domestic product, and the US S&P/Case-Shiller home price index. On Tuesday’s UK corporate calendar, various companies release half-year results including Cranswick, Intercede and AO World. Marston’s and Compass release annual results. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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