London close: FTSE nudges up as Trump comments calm markets

(Sharecast News) - London stocks reversed earlier gains to end a touch higher on Wednesday after US President Donald Trump calmed markets by ruling out the use of force in his pursuit of Greenland, and as investors mulled an unexpected increase in UK inflation.

The FTSE 100 closed 0.1% higher at 10,138.09.

In a lengthy speech at the World Economic Forum in Davos, the US president said Greenland - which he described as a "big, beautiful piece of ice" - was a "core national security interest" for America.

"If there is a war, much of the action would take place on that piece of ice," he said. "A lot of missiles would be flying over that piece of ice. A piece of ice, cold ice, that can play a vital role in world peace and world protection."

But investors breathed a sigh of relief after Trump used his speech to rule out taking the island by force.

"We probably won't get anything unless I decide to use excessive strength and force, where we would be, frankly, unstoppable. But I won't do that," he said. "That's probably the biggest statement I made, because people thought I would use force.

"I won't use force. All the US is asking for is a place called Greenland, which we always had, which we gave back after we defeated Germany, the Japanese and Italians in World War II."

Neil Wilson, UK investor strategist at Saxo Markets, said: "I guess the comments eased market concerns about the extreme tail risk that the US would invade Greenland, but they do not soothe concerns about the use of tariffs against several European nations and the threat of an escalating trade war between the EU and US. This relief rally may prove short-lived."

On home shores, figures from the Office for National Statistics showed inflation rose by more than expected in December, after a jump in tobacco prices and airfares.

The consumer price index rose by 3.4%, up from 3.2% in the 12 months to November. Consensus had been for a more modest rise, to 3.3%.

Alcohol and tobacco prices jumped by 5.2%, up from 4.0% a month previously, following a recently-introduced increase in excise duty. That rise usually comes through in November, but this year fell in December following the later-than-usual Budget.

Airfares, meanwhile, were affected by the timing of return flights over Christmas and New Year.

Rising food costs, particularly for bread and cereals, were also an upward driver, however, up 4.5%. Prices had risen by 4.2% in November.

Including housing costs, the CPIH rose by 3.6% in the 12 months to December, up from 3.5% in November.

The December print is the first rise in CPI for five months.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said that from a market perspective, the CPI "doesn't materially shift the narrative, with a February rate cut effectively off the table".

"The picture looks more encouraging in April when another cut is expected, as inflation could fall sharply towards the 2% target with regulated price increases coming in lower than last year," he added.

Investors were also mulling the latest Industrial Trends Survey from the Confederation of British Industry, which showed that manufacturing output fell in the quarter to January, while optimism remains weak.

In equity markets, heavily-weighted miners were among the top performers after Rio Tinto reported a bumper fourth quarter. Iron ore production from Pilbara and total copper output beat analysts' estimates to reach new records, as the company met or exceeded full-year guidance across all major product groups.

Burberry was in fashion as the luxury brand said comparable retail sales rose 3% in the third quarter, which was an improvement on the 4% decline seen in the same period a year earlier.

JD Sports gained after it held annual guidance as fourth-quarter like-for-like sales fell 1.8% with a return to growth in North America - the retailer's biggest market - offset by a weak performance in the UK and Europe amid a volatile consumer environment.

Currys advanced as the electricals retailer said that full-year profit was set to beat market expectations after "very strong" trading over the peak Christmas and new year period.

Premier Foods rose as the Mr Kipling and Oxo owner lifted its full-year profit outlook after strong Christmas trading.

Quilter rallied as it reported record quarterly core net inflows of �2.4bn.

On the downside, credit-checking firm Experian fell despite posting a 12% increase in third-quarter revenue, while Admiral was knocked lower by a downgrade to 'sell' from 'buy' at Goldman Sachs.

Lancashire Holdings also fell as Goldman cut its price target on the stock from 763p to 658p.

Wetherspoons slumped as it warned that first-half profits were likely to be lower than the same period a year earlier and and that its full-year trading outcome was set to be "slightly below" FY25. The company said costs had been higher than expected.

Market Movers

FTSE 100 (UKX) 10,138.09 0.11%

FTSE 250 (MCX) 23,071.29 0.49%

techMARK (TASX) 5,850.08 0.29%

FTSE 100 - Risers

Rio Tinto (RIO) 6,641.00p 5.18%

Burberry Group (BRBY) 1,280.00p 5.00%

Bunzl (BNZL) 2,086.00p 4.88%

Anglo American (AAL) 3,401.00p 4.87%

JD Sports Fashion (JD.) 81.76p 4.45%

Glencore (GLEN) 500.00p 3.73%

Croda International (CRDA) 2,772.00p 3.51%

Halma (HLMA) 3,710.00p 3.34%

International Consolidated Airlines Group SA (CDI) (IAG) 420.00p 2.89%

Diageo (DGE) 1,672.00p 2.55%

FTSE 100 - Fallers

Experian (EXPN) 3,070.00p -4.87%

Admiral Group (ADM) 2,948.00p -4.16%

London Stock Exchange Group (LSEG) 8,782.00p -2.20%

Rolls-Royce Holdings (RR.) 1,255.00p -2.03%

The Sage Group (SGE) 1,025.00p -1.58%

Compass Group (CPG) 2,221.00p -1.42%

ICG (ICG) 1,992.00p -1.39%

Whitbread (WTB) 2,714.00p -1.38%

AstraZeneca (AZN) 13,338.00p -1.35%

Imperial Brands (IMB) 2,993.00p -1.32%

FTSE 250 - Risers

Currys (CURY) 135.00p 7.66%

Premier Foods (PFD) 181.20p 7.09%

Oxford Nanopore Technologies (ONT) 160.90p 6.91%

Ceres Power Holdings (CWR) 327.00p 5.48%

Ithaca Energy (ITH) 177.80p 5.46%

RHI Magnesita N.V. (DI) (RHIM) 2,720.00p 5.22%

Quilter (QLT) 196.50p 4.80%

Applied Nutrition (APN) 238.50p 4.61%

Oxford Instruments (OXIG) 2,415.00p 3.87%

Diversified Energy Company (DI) (DEC) 975.00p 3.83%

FTSE 250 - Fallers

Wetherspoon (J.D.) (JDW) 679.50p -7.93%

Lancashire Holdings Limited (LRE) 615.00p -3.30%

Kainos Group (KNOS) 915.50p -3.28%

Ocado Group (OCDO) 262.50p -2.49%

Ashoka India Equity Investment Trust (AIE) 246.00p -2.19%

4Imprint Group (FOUR) 4,220.00p -1.97%

Foresight Group Holdings Limited NPV (FSG) 437.50p -1.80%

Cranswick (CWK) 5,010.00p -1.76%

Lion Finance Group (BGEO) 9,375.00p -1.52%

FirstGroup (FGP) 180.80p -1.47%