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Stock prices in London were a tad higher on Tuesday morning as all of the UK’s seven largest lenders passed the Bank of England’s latest stress test; meanwhile the deceleration of annual UK house price growth in November was milder than anticipated. The FTSE 100 index opened up 15.62 points, 0.2%, at 9,718.65. The FTSE 250 was up 25.67 points, 0.1%, at 22,045.81, and the AIM All-Share was down 1.44 points, 0.2%, at 753.35. The Cboe UK 100 was up 0.1% at 973.76, the Cboe UK 250 was down 0.1% at 19,154.52, and the Cboe Small Companies was down 0.1% at 17,601.99. All of the UK’s seven largest lenders passed the Bank of England’s latest stress test, the central bank said, confirming the sector is strong enough to withstand a severe downturn. ‘The system remains resilient in the stress scenario. All participating banks maintain capital and leverage ratios above regulatory minima and remain able to support households and businesses through the stress,’ the BoE said, noting that detailed capital results for each lender were published alongside the statement. The central bank said Lloyds, Nationwide, NatWest and Santander UK were hit hardest by the UK-focused macroeconomic shock, which included higher interest rates, elevated inflation, rising unemployment and house price declines. By contrast, globally diversified banks - Barclays, HSBC and Standard Chartered - also faced additional pressures from overseas downturns and market-traded risk shocks across Hong Kong, China, the US and Europe. Bank shares rose following the announcement: Lloyds gained 1.1%, Barclays rose 0.9%, NatWest added 0.4%, HSBC climbed 0.8% and Standard Chartered advanced 0.7%. Santander was up 1.6% in Madrid. In European equities on Tuesday, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was up 0.4%. Germany’s industrial sector is facing a ‘structural decline,’ the head of the Federation of German Industries warned, saying output is expected to fall 2% in 2025. BDI President Peter Leibinger said the downturn marks the sector’s most severe crisis since the founding of the Federal Republic, adding: ‘This is not a cyclical dip, but a structural decline.’ In France, the government deficit narrowed in October. The Finance Ministry said the budget shortfall fell 12% month-on-month to €136.17 billion and was 13% below October 2024’s level. Sterling was quoted at $1.3213 early Tuesday, lower than $1.3227 at the London equities close on Monday. The euro traded at $1.1612 early Tuesday, lower than $1.1625 late Monday. Against the yen, the dollar was quoted at JP¥155.80 versus JP¥155.96. Nationwide said UK annual house price growth slowed to 1.8% in November, easing from 2.4% in October, though it was milder than a deceleration to 1.4% that had been expected by the FXStreet-cited consensus. Prices rose 0.3% month-on-month in November after seasonal adjustment, slightly stronger than the 0.2% increase seen in October. The average price increased to £272,998 from £272,226. Broker RBC adjusted its ratings on UK housebuilders, raising Persimmon and Taylor Wimpey to outperform while downgrading Barratt Redrow and Berkeley. Persimmon led the FTSE 100, rising 1.9%, while Taylor Wimpey gained 2.3% on the FTSE 250. Barratt Redrow and Berkeley fell 0.1% and 0.7%. Whitbread was the second-biggest FTSE 100 faller, down 1.6%, after JPMorgan cut its price target to 2,450p from 2,900p, maintaining a ’neutral’ rating. Edinburgh Worldwide rose 2.2%, while Baillie Gifford US Growth Trust slipped marginally, after both confirmed their proposed merger will not proceed without the backing of major shareholder Saba Capital. Saba, which holds 29% of Baillie Gifford US Growth and is Edinburgh Worldwide’s largest shareholder, rejected the deal, preventing it from moving forward. On the FTSE 250, Foresight Group fell 6.1% after reporting interim results. The firm said it remains on track to double core Ebitda pre-SBP over five years to FY29. Assets under management rose 4% year-on-year to £13.68 billion, revenue grew 11% to £81.5 million, and the interim dividend increased 9% to 8.1p. Victrex climbed 7.0% after posting stronger annual results. Pretax profit rose to £33.8 million from £23.4 million, while revenue nudged up to £292.7 million from £291.0 million. Basic EPS grew to 32.0p from 19.8p. Victrex expects ‘solid progress in financial 2026,’ forecasting low to mid-single-digit volume growth, a 45.5%46.5% gross margin, and maintained its final dividend at 46.14p. In airlines, Wizz Air reported an 8.6% year-on-year rise in November passenger traffic, while Ryanair carried 6% more passengers. Wizz rose 0.2%, while Ryanair slipped 0.2% in Dublin. The UK’s fiscal watchdog was thrust into turmoil late Monday after OBR Chair Richard Hughes resigned following the premature publication of its forecasts. Hughes said he was stepping down to allow the OBR to ‘quickly move on from this regrettable incident,’ taking ‘full responsibility’ for what a report described as ‘the worst failure in the 15-year history of the OBR.’ In Asia on Tuesday, the Nikkei 225 index in Tokyo was marginally higher. In China, the Shanghai Composite was down 0.4%, while the Hang Seng index in Hong Kong was up 0.2%. The S&P/ASX 200 in Sydney closed up 0.2% On Wall Street, stocks ended lower on Monday. The Dow Jones Industrial Average fell 0.9%, the S&P 500 lost 0.5%, and the Nasdaq Composite declined 0.4%. The yield on the US 10-year Treasury was quoted at 4.10%, widening from 4.09%. The yield on the US 30-year Treasury was quoted at 4.75%, widening from 4.74%. Swissquote analyst Ipek Ozkardeskaya said Monday’s US factory data underscored weakness ‘beyond AI hype,’ noting: ‘Factory activity contracted for the ninth straight month& orders fell at the steepest pace in four months& employment shrank.’ She said a rate cut next week ‘seems highly likely.’ Gold was quoted at $4,213.80 an ounce early Tuesday, lower than $4,236.80 on Monday. Brent oil was trading at $63.13 a barrel early Tuesday, higher than $63.03 late Monday. Silver, which surged nearly 6% on Friday and hit $58.84 on Monday, eased to $57.22. Still to come on Tuesday’s economic calendar are eurozone consumer price inflation and unemployment figures. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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