London midday: Stocks maintain gains as miners rally, pound slumps

(Sharecast News) - London stocks were still in the black by midday on Thursday, underpinned by strength in the mining sector and a weaker pound, as the selloff in the bond market continued. The FTSE 100 was up 0.5% at 8,291.35, while sterling was at its lowest level against the dollar since 2023, down 0.6% at 1.2291 amid the bond market selloff.

The top-flight index tends to benefit from a weaker pound, as around 70% of its constituents derive their earnings from abroad. The UK-focused FTSE 250 was in the red, however, down 0.5% at 19,847.44.

US markets will be closed for a national day of mourning for former president Jimmy Carter, who died in December.

Russ Mould, investment director at AJ Bell, said: "Turmoil in the markets implies a massive loss of confidence in the UK government. The 30-year gilt yield briefly hit 5.445%, surpassing the Liz Truss crisis period, and the pound slumped to $1.2256 against the US dollar which is the lowest level since November 2023.

"The feel-good factor around the UK following last summer's general election has quickly disappeared and turned to gloom as companies brace themselves for higher costs and consumers worry about job security and the cost of living going up again.

"Chancellor Rachel Reeves implied from the start that tough decisions were needed to lay stronger foundations for longer term growth, meaning life could get worse before it gets better. The storm clouds have certainly darkened.

"Investors are worried about extra borrowing by the government to achieve its plans. However, it is worth noting that the pound remains considerably stronger than when Liz Truss briefly ran the country. The UK is also not alone in seeing a higher cost of borrowing for the government as the US has also seen higher yields.

"Negativity has spread to parts of the UK equity market with the more domestic-focused FTSE 250 index having a terrible time, down more than 4% year-to-date. Approximately half of the index generates earnings in the UK whereas about three quarters of the FTSE 100 earns overseas, making that index less of a play on the state of the UK."

Mould said that explains why the FTSE 100 "managed to shrug off the doom and gloom".

Investors were also mulling the latest retail industry data, which showed that shop prices continued to fall in December, driven by heavy discounting.

According to the BRC-NielsenIQ shop price index, deflation was 1.0%, compared to deflation of 0.6% in the previous month.

Within that, non-food deflation was -2.4%, its most since April 2021. Food inflation was 1.8%, unchanged on November but still the lowest rate since December 2021.

Helen Dickinson, chief executive of the British Retail Consortium, said: "Retailers discounted heavily for Black Friday, as they attempted to make up for weaker sales earlier in the year.

"However, the later Black Friday timing brought many of the non-food discounts into the measurement period, making non-food prices look more deflationary than the underlying trend."

Black Friday was on 29 November last year, compared to 24 November in 2023. Retailers tend to discount heavily in the build-up to the event and then maintain the cheaper prices into the following week.

Dickinson continued: "As retailers battle £7bn of increased costs in 2025, including higher employer NI, National Living Wage and new packaging levies, there is little hope of prices going anywhere but up."

In equity markets, miners were among the top performers as copper prices rose, with Antofagasta, Anglo American and Rio Tinto all up.

Gold miners also benefited from a jump in the price of the yellow metal, with Fresnillo, Hochschild and Endeavour trading up.

Ferrexpo was also a bright spot, with shares higher as it said there had been a surge in annual production, its best result since Russia invaded Ukraine, despite the ongoing "challenging" conditions.

Retailers were under the cosh, however.

Marks & Spencer slumped despite the food and clothing retailer posting a 6.4% rise in UK third quarter like-for-like sales after a better-than-expected performance over the key Christmas period.

The company said sales came in at £3.9bn. Food revenue in the 13 weeks to December 28 increased 8.9% and 1.9% for home, clothing and beauty against expectations on 7.8% and 0.7% respectively.

Tesco was also lower even as it reported a solid uptick in sales growth over the key Christmas trading period, and posted its highest market share in eight years.

Discount retailer B&M slid even as it reported third-quarter revenue growth of 2.8% year-on-year, driven by a strong seasonal performance in the UK and robust growth in France, and declared a special dividend of 15p per share.

Bakery chain Greggs retreated as it said it jumped past the £2bn sales mark in 2024, but reported a slowdown in like-for-like sales growth for the fourth quarter as weaker consumer confidence dented footfall on the high street.

Market Movers

FTSE 100 (UKX) 8,291.35 0.49% FTSE 250 (MCX) 19,847.44 -0.53% techMARK (TASX) 4,593.10 -0.22%

FTSE 100 - Risers

Antofagasta (ANTO) 1,745.50p 4.90% Anglo American (AAL) 2,465.50p 4.40% Fresnillo (FRES) 674.50p 4.09% Rio Tinto (RIO) 4,851.00p 2.74% Glencore (GLEN) 371.55p 2.09% Smith (DS) (SMDS) 565.00p 1.99% Pershing Square Holdings Ltd NPV (PSH) 4,192.00p 1.85% Compass Group (CPG) 2,711.00p 1.80% Melrose Industries (MRO) 564.20p 1.62% Shell (SHEL) 2,618.50p 1.51%

FTSE 100 - Fallers

Marks & Spencer Group (MKS) 348.50p -7.51% Sainsbury (J) (SBRY) 260.80p -4.12% NATWEST GROUP (NWG) 378.40p -3.62% Admiral Group (ADM) 2,523.00p -3.33% Land Securities Group (LAND) 543.00p -2.86% Associated British Foods (ABF) 1,945.00p -2.80% Hiscox Limited (DI) (HSX) 1,061.00p -2.75% Next (NXT) 9,418.00p -2.71% Taylor Wimpey (TW.) 107.30p -2.68% Kingfisher (KGF) 229.30p -2.55%

FTSE 250 - Risers

Hochschild Mining (HOC) 230.00p 3.60% Harworth Group (HWG) 164.00p 3.47% Endeavour Mining (EDV) 1,517.00p 2.15% BlackRock World Mining Trust (BRWM) 485.00p 2.11% Ferrexpo (FXPO) 94.70p 2.05% Aston Martin Lagonda Global Holdings (AML) 105.40p 1.93% Carnival (CCL) 1,769.00p 1.93% Ninety One (N91) 140.40p 1.59% Harbour Energy (HBR) 268.00p 1.48% Fidelity China Special Situations (FCSS) 217.50p 1.40%

FTSE 250 - Fallers

B&M European Value Retail S.A. (DI) (BME) 305.40p -12.39% Greggs (GRG) 2,354.00p -10.36% Hays (HAS) 70.95p -6.03% Ocado Group (OCDO) 275.00p -5.34% Just Group (JUST) 142.80p -4.93% Chrysalis Investments Limited NPV (CHRY) 100.20p -4.02% Vistry Group (VTY) 515.50p -4.00% Trustpilot Group (TRST) 272.00p -3.89% Workspace Group (WKP) 442.00p -3.70% SThree (STEM) 275.00p -3.34%