London midday: FTSE in the red as miners retreat; US inflation eyed

(Sharecast News) - London stocks were still in the red by midday on Monday amid weakness in the mining sector, as investors eyed the release of the latest US inflation reading this week. The FTSE 100 was down 0.3% at 7,667.08.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 dipped on Monday as weak commodity prices hit the big resources stocks which populate the index.

"In general, the momentum which stocks built up in the latter part of 2023 seems to have been lost for now as some of the excitement over interest rates has dissipated and doubt has crept in about a soft landing for the economy.

"US inflation figures scheduled for Thursday could either help get markets out of their mild New Year funk or put shares under renewed pressure, so this release will be closely monitored. Disruption to shipping routes in the Red Sea are hinting at renewed inflationary pressures coming down the pipe."

Investors were also looking ahead to the start of the US fourth-quarter earnings season, which kicks off on Friday with big bank results.

On home shores, a survey out earlier from Make UK and PwC showed that manufacturers are more bullish about the sector's prospects than they were 12 months ago.

The survey, which featured responses from over 200 senior manufacturing executives, found that 44.4% of companies see a moderate to significant improvement in industry conditions in 2024, compared with just 20.5% that expect conditions to worsen.

However, executives weren't so rosy about economic conditions at home and abroad: 41% expect UK conditions to deteriorate, while 38% foresee a worsening of the landscape overseas.

Nevertheless, 53% said they see opportunities in new products in 2024, while 27% are expanding into new markets.

Manufacturers are also confident about the impact that digital technologies will have on productivity and operational efficiency, with 23% of leaders citing opportunities in net zero, digital tech, cloud and artificial intelligence.

"The last few years have been a rollercoaster of emotions for manufacturers, yet they have more than demonstrated their resilience time after time. We are now seeing some hope that conditions may be improving, amid a more supportive and stable policy environment, but this must be cemented within a long term industrial strategy," said Stephen Phipson, chief executive of Make UK.

"While undoubted challenges remain, the accelerating use of digital technologies, our strength in innovation and expansion into new markets sets the scene for manufacturing to be at the heart of efforts to boost growth."

In equity markets, miners were under the cosh, with Anglo American, Glencore and Antofagasta all down.

Energy giant Shell fell as it flagged fourth-quarter impairments of up to $4.5bn, primarily in its chemicals and products division. The oil major, updating on fourth-quarter trading, said non-cash post-tax impairments were expected to be between $2.5bn and $4.5bn.

On the upside, Melrose was the standout gainer on the FTSE 100 as JPMorgan put the shares on 'positive catalyst watch' ahead of 2023 results in March.

Drax surged following a report the UK government is set approve a multibillion-pound CO2 capture scheme.

According to The Telegraph, Energy Secretary Claire Coutinho is expected to approve a scheme to bolt two massive carbon capture plants onto Drax's four generating units, potentially stripping out almost all their CO2 emissions.

Drax claims the scheme will allow it to remove more CO2 from the atmosphere than it produces - making it the world's first carbon negative thermal power station.

Plus500 rallied as it said that for the year ended 31 December 2023, it generated revenue of about $725m and EBITDA of $340m, both of which are "significantly" ahead of current market expectations.

Online trading platform CMC Markets surged after it lifted its full-year net operating income guidance as it hailed a strong performance in the third quarter. The company now expects FY24 net operating income of between £290m and £310m, up from previous guidance of £250m to £280m.

In broker note action, housebuilders were in focus as Barclays lifted Bellway to 'overweight, but cut Barratt Developments and Berkeley to 'equalweight'.

Legal & General gained after an upgrade to 'buy' from 'hold' at Berenberg, while Ashtead fell after a downgrade to 'hold' at HSBC.

Market Movers

FTSE 100 (UKX) 7,667.08 -0.29% FTSE 250 (MCX) 19,157.58 -0.27% techMARK (TASX) 4,257.42 -0.23%

FTSE 100 - Risers

Melrose Industries (MRO) 576.00p 3.34% Legal & General Group (LGEN) 248.10p 1.76% Rolls-Royce Holdings (RR.) 301.20p 1.55% Smith & Nephew (SN.) 1,055.00p 1.25% Centrica (CNA) 153.50p 1.19% Rightmove (RMV) 557.20p 1.16% HSBC Holdings (HSBA) 641.30p 1.10% B&M European Value Retail S.A. (DI) (BME) 550.20p 1.03% Auto Trader Group (AUTO) 698.80p 1.01% Beazley (BEZ) 549.50p 1.01%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 116.55p -2.96% Anglo American (AAL) 1,822.80p -2.57% Glencore (GLEN) 453.00p -2.16% Shell (SHEL) 2,527.50p -1.69% Ashtead Group (AHT) 5,012.00p -1.69% WPP (WPP) 759.40p -1.40% United Utilities Group (UU.) 1,043.00p -1.37% BP (BP.) 467.40p -1.36% Antofagasta (ANTO) 1,594.50p -1.36% Vodafone Group (VOD) 69.45p -1.35%

FTSE 250 - Risers

Drax Group (DRX) 524.80p 7.17% Plus500 Ltd (DI) (PLUS) 1,745.00p 5.12% Vistry Group (VTY) 937.00p 3.65% Bellway (BWY) 2,666.00p 2.22% Crest Nicholson Holdings (CRST) 220.60p 2.13% Bytes Technology Group (BYIT) 579.50p 2.02% IG Group Holdings (IGG) 764.50p 1.73% Hargreaves Lansdown (HL.) 734.60p 1.72% Wizz Air Holdings (WIZZ) 2,171.00p 1.59% Games Workshop Group (GAW) 9,580.00p 1.59%

FTSE 250 - Fallers

Senior (SNR) 167.60p -4.77% Auction Technology Group (ATG) 469.50p -4.48% Diversified Energy Company (DEC) 1,127.50p -4.29% Future (FUTR) 745.50p -4.18% Trustpilot Group (TRST) 133.80p -3.88% Tullow Oil (TLW) 35.24p -3.45% Coats Group (COA) 70.40p -2.90% Energean (ENOG) 973.00p -2.70% Fidelity China Special Situations (FCSS) 199.20p -2.59% Dr. Martens (DOCS) 82.20p -2.55%