London midday: FTSE pushes higher as investors eye BoE; Burberry shines

(Sharecast News) - London stocks had extended gains by midday on Monday at the start of a week that will see the release of UK jobs data, inflation figures and the latest Bank of England policy announcement.

The FTSE 100 was 0.9% higher at 9,734.21.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "UK markets have a clear focal point this week, with the Bank of England in the spotlight and a rate cut on Thursday widely seen as a done deal.

"Markets are pricing in around a 90% chance of a move, so, absent any shocks, the decision itself matters less than the Bank's tone. Beyond domestic policy, UK assets will also take cues from the flood of delayed US economic data, making this a week where macro forces are firmly in the driving seat.

"US markets are trying to find their feet, with futures pointing to a firmer open as dip-buyers step back in, hopeful that a Santa rally can still materialise after Friday marked the S&P 500's worst session since 20 November. Attention now shifts to a heavy week of economic data, with a backlog of delayed releases finally hitting the tape following the government shutdown.

"The spotlight is firmly on Tuesday's jobs report and Thursday's inflation print, both of which could sway expectations for when, and how fast, interest rates might come down. Markets are tentatively pencilling in two cuts next year, but we know from history that these predictions can easily change."

Central bank policy announcements are also due on Thursday from the European Central Bank, Riksbank and Norges Bank.

On home shores, investors were mulling a long-running survey which showed that consumer sentiment has softened in the wake of this year's Budget.

The latest S&P Global consumer index came in at 44.7, down from 45.2 in November and the lowest print since April.

Among the index's sub-measures, expectations for finances in a year's time fell to 44.2 from 45.3 before the Budget, a 24-month low. Current finances were also down, moving to 40.7 from 41.6. The overall household finance index shed one point at 42.4.

Cash available to spend edged up, but views on making major purchases remained depressed, at 38.1.

The labour market sentiment index ticked lower, off 0.4 points at 52.2, while the savings index rose to a two-month high of 43.1.

Maryam Baluch, economist at S&P Global Market Intelligence, said: "The first indicator of household confidence since the autumn Budget makes for disappointing reading.

"Overall, the combination of subdued household confidence and early signs of job insecurity underscores the ongoing challenges facing UK households as they navigate an uncertain economic environment at the turn of the year.

"Consumers are unlikely to provide much of a boost to the economy as we head into 2026."

The latest house price reviews and outlooks from Nationwide and Halifax were also out, with the former expecting house prices to grow between 2% and 4% next year and the latter expecting a more modest 1% to 3% increase.

In equity markets, luxury fashion brand Burberry shot higher on news that China is set to increase financial support for key consumption areas, with a focus on consumer finance services for durable goods and digital products.

Gold miners Hochschild and Endeavour shone as gold prices rose.

Britzman said: "Gold continues to sparkle, hovering just shy of record highs as investors wait on a packed slate of US economic data for fresh clues on the Federal Reserve's next move.

"The precious metal is up more than 60% this year, on track for its strongest annual performance since 1979, fuelled by strong centralbank buying, safehaven demand and a sweet spot of cooling US rates alongside inflation that's expected to stay higher for longer."

Mike Ashley's Frasers Group surged after announcing a share buyback programme of up to �70m.

Hikma Pharmaceuticals fell as it said its chief executive has stepped down just over a month after the blue chip warned on profits. Hikma said Riad Mishlawi - who has been with the business for 35 years, the last two of which as chief executive - was leaving by mutual agreement. He will be replaced by former incumbent and current executive chair Said Darwazah.

Retailers were in focus after Jefferies adjusted its ratings on a host of UK stocks, having updated its consumer disposable spend forecasts for 26/27. The bank said the update shows a potential mismatch developing between consensus like-for-like sales and a more muted spending environment.

"This more cautious view prevents us arguing for further multiples expansion at Tesco/Next after their justifiable year-to-date rerating," it said.

Jefferies downgraded both Tesco and Next to 'hold' from 'buy' but lifted the price targets to 450p from 440p and to 1,400p from 1,300p, respectively. Sainsbury's was kept at 'hold' but its price target increased to 330p from 300p.

Associated British Foods slumped after Jefferies said it sees "more pressing concerns", with Primark's challenges likely to continue. As a result, it downgraded the shares to 'underperform' from 'hold' and cut the price target to 1,800p from 2,000p.

Marks & Spencer remained the bank's key pick, rated at 'buy', although it cut the price target to 400p from 440p.

Elsewhere, RBC Capital Markets downgraded medical technology firm Smith & Nephew to 'sector perform' from 'outperform', but Citi reiterated its 'buy' rating on the company.

Market Movers

FTSE 100 (UKX) 9,734.21 0.88%

FTSE 250 (MCX) 22,038.91 0.74%

techMARK (TASX) 5,557.98 0.10%

FTSE 100 - Risers

Burberry Group (BRBY) 1,310.50p 2.99%

Antofagasta (ANTO) 3,015.00p 2.83%

Phoenix Group Holdings (PHNX) 694.50p 2.66%

International Consolidated Airlines Group SA (CDI) (IAG) 414.40p 2.65%

The Sage Group (SGE) 1,099.00p 2.52%

Prudential (PRU) 1,099.50p 2.52%

Pershing Square Holdings Ltd NPV (PSH) 5,055.00p 2.41%

Diploma (DPLM) 5,435.00p 2.26%

Hiscox Limited (DI) (HSX) 1,379.00p 2.22%

ICG (ICG) 2,072.00p 2.17%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 1,498.00p -1.19%

BAE Systems (BA.) 1,684.00p -0.97%

Associated British Foods (ABF) 2,068.00p -0.86%

Smurfit Westrock (DI) (SWR) 2,814.00p -0.74%

Tesco (TSCO) 438.10p -0.61%

Babcock International Group (BAB) 1,241.00p -0.56%

Persimmon (PSN) 1,300.50p -0.34%

GSK (GSK) 1,820.00p -0.25%

Fresnillo (FRES) 2,898.00p -0.21%

Barratt Redrow (BTRW) 358.10p -0.20%

FTSE 250 - Risers

Frasers Group (FRAS) 680.50p 8.10%

B&M European Value Retail S.A. (DI) (BME) 164.45p 4.85%

4Imprint Group (FOUR) 3,860.00p 3.07%

Watches of Switzerland Group (WOSG) 504.50p 2.88%

Hochschild Mining (HOC) 469.40p 2.85%

Wizz Air Holdings (WIZZ) 1,228.00p 2.85%

Harbour Energy (HBR) 211.60p 2.82%

Bridgepoint Group (Reg S) (BPT) 285.20p 2.52%

Ocado Group (OCDO) 231.10p 2.48%

Discoverie Group (DSCV) 606.00p 2.19%

FTSE 250 - Fallers

Oxford Biomedica (OXB) 600.00p -4.15%

Helios Towers (HTWS) 155.40p -2.26%

NCC Group (NCC) 136.20p -1.87%

Ceres Power Holdings (CWR) 268.60p -1.40%

SDCL Efficiency Income Trust (SEIT) 51.90p -1.33%

W.A.G Payment Solutions (EWG) 96.80p -1.22%

Bluefield Solar Income Fund Limited (BSIF) 66.10p -1.20%

GCP Infrastructure Investments Ltd (GCP) 71.00p -0.98%

Syncona Limited NPV (SYNC) 95.00p -0.94%

Oxford Nanopore Technologies (ONT) 123.80p -0.80%