London midday: Stocks off highs but defence firms, gold miners rally

(Sharecast News) - London stocks were off earlier highs but still in the black by midday on Monday, with defence firms and gold miners pacing the gains following the US capture over the weekend of Venezuelan leader Nicolas Maduro.

The FTSE 100 was up 0.1% at 9,961.49.

Neil Wilson, UK investor strategist at Saxo Markets, said: "Oil prices fell but gold and defence shares rose as markets had their first real stab at reacting to the US snatch-and-grab raid in Venezuela and its ongoing fallout. Markets are never very good at pricing geopolitical risk or events. Usually, as an investor, it's best to keep calm and carry on - fundamentals win out in the end.

"But for now there is a considerable degree of headline risk around Venezuela that traders should be mindful of. President Trump has threatened military action against Colombia, warning it could be next if it fails to combat illicit drug trafficking. He's also warning against Mexico and Greenland.

"Why are oil prices down? The chief headline channel if you like for a market reaction to Venezuela is probably oil but it's only 1% of global supply, so it's not a big surprise that we have seen little to no impact, and prices are indeed lower this morning after OPEC+ agreed over the weekend to keep output steady amid a rift among members of the cartel. The market is probably more focused on the overhang of 2025 oversupply than near-term geopolitical risks."

Looking ahead to the rest of the week, retailers will be in focus, with Next due to release a fourth-quarter trading statement on Tuesday, while Marks & Spencer will update on Christmas trading on Thursday and Sainsbury's releases a third-quarter trading statement on Friday.

"Together, these updates will help to paint a picture of consumer spending and whether retailers kept the tills ringing over Christmas," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

On the macro front, the Bank of England's latest monthly Money and Credit report showed that mortgage approvals for house purchases fell to 64,530 from 65,010 in October. Net borrowing of mortgage debt rose to �4.5bn in November, following a decrease of �1bn to �4.2bn in October.

The 'effective' interest rate - the actual interest paid - on newly drawn mortgages increased for the first time since February 2025 to 4.20% in November from 4.17% the month before. The rate on the outstanding stock of mortgages was 3.90%, up from 3.89%.

The report also showed that net borrowing of consumer credit by individuals rose to �2.1bn in November from �1.7bn in October. Within that, net borrowing through credit cards was �1bn, up from �0.7bn in October.

Net borrowing through other forms of consumer credit, such as car dealership finance and personal loans, nudged up to �1.1bn from �1bn.

Matt Swannell, chief economic advisor to the EY ITEM Club, pointed out that despite the dip in mortgage approvals, market activity continues to run above post-pandemic norms.

"Firm levels of activity reflect the improvement in mortgage affordability over the past couple of years, but the big gains are now behind us. Pay growth slowed in 2025 and is expected to cool further this year," he said. "In addition, mortgage rates have fallen considerably in recent years, and though the Monetary Policy Committee (MPC) has emphasised that further rate cuts are likely, its recent guidance has been cautious.

"This suggests the scope for swap rates and mortgage rates to fall this year is limited. With further mortgage affordability gains likely to be modest, demand is expected to plateau over the next couple of years, although tight supply points to a gradual rise in house prices."

In equity markets, defence firms BAE Systems, Babcock and Rolls-Royce were among the top performers, as investors also considered Trump's potential plans for Greenland, Cuba and Colombia.

Precious metals miner Fresnillo and gold miners Hochschild and Endeavour racked up strong gains as gold and silver prices were boosted by a flight to safety.

Emerging markets asset manager Ashmore jumped due to its exposure to Venezuelan debt. In the November 2025 update on its SICAV Emerging Markets Sovereign Debt Fund, Ashmore cited Venezuela as its biggest country exposure, at 7.1% of the fund.

Bonds in Venezuela's state-owned oil company, Petroleos De Venezuela, were cited at the top of its top 10 holding exposure, at 3.4% of the fund.

Johnson Matthey shot higher after an upgrade to 'buy' from 'hold' at Berenberg, which highlighted the potential for consensus earnings upgrades and the stock's correlation with precious metal proxies.

Outside the FTSE 350, Auction Technology surged after the online auction operator said it has rejected 11 unsolicited buyout proposals from its largest shareholder FitzWalter Capital.

Market Movers

FTSE 100 (UKX) 9,961.49 0.10%

FTSE 250 (MCX) 22,380.76 -0.13%

techMARK (TASX) 5,630.30 0.34%

FTSE 100 - Risers

Babcock International Group (BAB) 1,333.00p 4.71%

BAE Systems (BA.) 1,835.00p 4.62%

Fresnillo (FRES) 3,502.00p 4.47%

Antofagasta (ANTO) 3,367.00p 3.41%

Anglo American (AAL) 3,128.00p 2.89%

Rolls-Royce Holdings (RR.) 1,230.00p 2.76%

Glencore (GLEN) 416.05p 1.77%

Rio Tinto (RIO) 6,082.00p 1.60%

Smiths Group (SMIN) 2,408.00p 1.52%

Melrose Industries (MRO) 618.40p 1.38%

FTSE 100 - Fallers

Imperial Brands (IMB) 3,039.00p -2.75%

Burberry Group (BRBY) 1,281.50p -2.66%

Beazley (BEZ) 795.50p -2.63%

Bunzl (BNZL) 2,014.00p -2.42%

JD Sports Fashion (JD.) 83.72p -2.33%

Admiral Group (ADM) 3,076.00p -2.29%

BT Group (BT.A) 179.80p -2.15%

Unilever (ULVR) 4,723.50p -2.05%

DCC (CDI) (DCC) 4,456.00p -1.94%

Metlen Energy & Metals (MTLN) 45.10p -1.64%

FTSE 250 - Risers

Ceres Power Holdings (CWR) 232.00p 8.11%

Johnson Matthey (JMAT) 2,300.00p 5.31%

Hochschild Mining (HOC) 512.50p 4.68%

Endeavour Mining (EDV) 3,820.00p 4.66%

Ashmore Group (ASHM) 181.80p 3.89%

Chemring Group (CHG) 487.00p 2.96%

Princes Group (PRN) 462.25p 2.72%

QinetiQ Group (QQ.) 455.00p 2.39%

Trustpilot Group (TRST) 161.20p 2.35%

BlackRock World Mining Trust (BRWM) 853.00p 2.16%

FTSE 250 - Fallers

Raspberry PI Holdings (RPI) 280.20p -6.16%

AEP Plantations (AEP) 1,355.00p -3.56%

Ibstock (IBST) 136.00p -3.55%

Aston Martin Lagonda Global Holdings (AML) 62.65p -2.94%

Ocado Group (OCDO) 228.50p -2.89%

B&M European Value Retail S.A. (DI) (BME) 160.55p -2.67%

Genuit Group (GEN) 319.00p -2.45%

THG (THG) 45.12p -2.42%

Playtech (PTEC) 266.00p -2.39%

WH Smith (SMWH) 624.00p -2.35%