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The FTSE 100 closed essentially flat on Tuesday, after gains for banking stocks offset a weaker gold price. The FTSE 100 index closed down just 0.73 of a point at 9,701.80. The FTSE 250 ended down 38.68 points, 0.2%, at 21,982.00, and the AIM All-Share closed down 6.47 points, 0.9%, at 748.32. The Cboe UK 100 was down 0.1% at 972.23, the Cboe UK 250 was down 0.7% at 19,049.02, and the Cboe Small Companies was down 0.1% at 17,599.40. Keeping London’s blue chip index close to parity gains in banks after lenders passed the latest Bank of England stress tests. Lloyds Banking Group, Barclays, NatWest and Standard Chartered ended up 2.0%, 1.6%, 1.3% and 1.2% respectively. In its December Financial Stability Report, the Bank of England lowered the ‘appropriate benchmark’ for Tier 1 capital requirements to around 13% of risk-weighted assets. This is equivalent to a CET1 ratio of around 11%, one percentage point lower than its previous benchmark of around 14%. The stress tests, introduced in the wake of the 2008 global financial crisis, examine how banks perform in a severe recession scenario where economic growth plummets and unemployment rises sharply, along with other associated economic impacts. The BoE found that the banking system could continue to support the UK economy even if economic and financial conditions turned out materially worse than expected. ‘The UK banking system is well capitalised, maintains robust liquidity and funding positions, and asset quality remains strong’, the report stated. Benjamin Toms, equity analyst at RBC Capital Markets, felt the report’s findings were ‘constructive’ but ‘not an instant game changer.’ ‘Whilst the contents of this paper are constructive for UK banks, the most important elements were already known, and expectations that this morning’s release could lead to incrementally lower capital requirements were elevated,’ he noted. However, Jefferies analyst Jonathan Pierce said the report was a ‘clear positive’ and at the ‘upper end of our expectations.’ Offsetting gains in the banks, weak miners and mixed housebuilders. Endeavour Mining fell 4.9% and Fresnillo dipped 3.3% after the gold price fell. Gold was quoted at $4,174.00 an ounce on Tuesday, lower against $4,236.80. Also on Tuesday, Endeavour Mining outlined goals for the next five years, noting the potential to expand operations beyond its current West African targets. From 2026 to 2030, the London-based gold producer targeting West Africa aims to discover between 12 million to 15 million ounces of mineral resources, at an average cost below $40 per ounce. In European equities on Tuesday, the CAC 40 in Paris closed down 0.3%, while the DAX 40 in Frankfurt ended up 0.5%. Bayer surged 12% in Frankfurt after winning support from the Donald Trump administration to curb US litigation related to its Roundup weedkiller. The company is facing lawsuits alleging the weedkiller caused health issues, including cancer. But US Solicitor John Sauer urged the Supreme Court to limit the lawsuits brought against Bayer, supporting the firm’s argument that federal law on pesticides pre-empts claims made under state law. Meanwhile, figures showed the eurozone’s annual inflation rate rose against expectations. The region’s harmonised annual consumer price index inflation rate increased to 2.2% in November from 2.1% in October, higher than the FXStreet-cited consensus which had expected the rate to remain at 2.1% in November, according to Eurostat. Monthly, harmonised prices fell by 0.3% in November, after an increase of 0.2% in October. ING said: ‘Markets hadn’t been pricing a rate cut, and today provides little reason to change that view. The stability of the short-term inflation outlook makes the European Central Bank projections far more interesting. We expect that inflation can fall below target in the months ahead, but for the medium term, there seems to be enough inflationary drivers around for the ECB not to tilt too dovish.’ Stocks in New York were higher at the time of the London equity close. The Dow Jones Industrial Average was up 0.2%, the S&P 500 index was slightly higher, and the Nasdaq Composite was up 0.3%. 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%, stretched from 4.74%. Back in London, housebuilders were in the spotlight after a report showed that UK house price growth slowed in November. Annual growth eased to 1.8% in November from 2.4% in October, Nationwide said. It was milder than a deceleration to 1.4% that had been expected by the FXStreet-cited consensus. In addition, RBC Capital Markets rejigged ratings for a number of listed builders as it looks ahead to 2026. The broker upgraded Persimmon and Taylor Wimpey to ’outperform’ from ’sector perform’, downgraded Berkeley to ’underperform’ from ’outperform’ and cut Barratt Redrow to ’sector perform’ from ’outperform’. ‘The UK housing market, like many of us, has been fitter in the past, but it is certainly a long way from being on life support,’ RBC said. Persimmon ended up 0.5% and Taylor Wimpey rose 0.8%, but Berkeley fell 3.3% and Barratt Redrow dropped 1.7%. The pound was quoted lower at $1.3195 at the time of the London equities close on Tuesday, compared to $1.3227 on Monday. The euro stood at $1.1607, down against $1.1625. Against the yen, the dollar was trading higher at JP¥155.76 compared to JP¥155.28. On the FTSE 250, Victrex climbed 7.7% as it reported pretax profit rose 44% to £33.8 million for the year that ended September 30 from £23.4 million the year before. Elsewhere, On The Beach surged 12% as it hailed ‘strong’ annual earnings with pretax profit up 9.5% and revenue up a more modest 1.8%. The package holiday provider believes consumers will ‘protect’ their getaways even in the face of a tough economic backdrop. ‘We are confident in delivering another record summer,’ On the Beach said. Brent oil was quoted at $62.81 a barrel at the time of the London equities close on Tuesday, down from $63.03 late Monday. The biggest risers on the FTSE 100 were Airtel Africa, up 6.60 pence at 318.60p, Lloyds Banking Group, up 1.86p at 97.36p, Land Securities, up 11.50p at 612.00p, Vodafone, up 1.58p at 93.94p, and Barclays, up 6.80p at 436.40p. The biggest fallers on the FTSE 100 were Endeavour Mining, down 178.00p at 3,434.00p, Fresnillo, down 92.00p at 2,728.00p, Berkeley Group, down 120.00p at 3,590.00p, WPP, down 9.50p at 289.20p and Whitbread, down 62.00p at 2,403.00p. Wednesday’s economic calendar has a slew of composite PMI readings, along with ISM services figures and payroll data from ADP in the US. Wednesday’s UK corporate calendar has full-year results from lender Paragon Banking Group while mining group Glencore hosts a capital markets day. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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