London close: FTSE maintains gains on China stimulus hopes

(Sharecast News) - London's stock markets closed with a mixed performance on Monday, as optimism over potential economic stimulus in China provided a boost to mining stocks.

The FTSE 100 index climbed 0.52% to close at 8,352.08 points, while the FTSE 250 edged down by 0.05% to end at 21,049.27 points.

In currency markets, sterling was last up 0.27% on the dollar to trade at $1.2779, while it advanced 0.26% against the euro, changing hands at €1.2091.

"It's been a while since investors were treated to some China stimulus headlines, but the apparent change in policy stance following overnight inflation data has given markets hope of more concrete measures," said IG chief market analyst Chris Beauchamp.

"The news has certainly put new life into the FTSE 100, which had been in search of a fresh driver following its late November recovery.

"China demand hopes and Middle East turmoil also bolstered oil prices, which have rebounded once more."

Beauchamp noted that Monday started with US indices shedding some ground after the record highs of last week.

"The mid-December lull seems poised to descend, and a combination of fading volume, this week's CPI print and next week's Fed decision means that a further trimming of gains over the next week or so is highly likely."

UK labour market slows, investor confidence in eurozone reaches 13-month low

In economic news, the latest KPMG and REC 'Report on Jobs' indicated a further slowdown in the labour market in the UK during November.

Permanent job placements fell sharply, declining at the steepest pace since August, with the index dropping from -5.9 in October to -9.3.

Temporary billings, however, saw a modest recovery, rising to 2.7 from -3.2.

Employers have reportedly paused hiring plans, citing concerns about the late-October budget's potential impact.

Permanent salary growth remained subdued, while demand for staff declined at its fastest rate since August 2020.

Regional data showed the largest drop in permanent placements in southern England, while temporary hiring contracted broadly except in the Midlands, which saw notable growth.

"Businesses are having to weigh up the prospect of increasing employee costs following the Budget, which has led to an accelerated slowdown in hiring activity across the board," said KPMG's Jon Holt.

"While the data was already heading in that direction, permanent placements saw their steepest reductions in over a year last month, and temporary roles also saw a fifth consecutive decline.

"This slowdown, alongside a growing availability of candidates in the market could put more downward pressure on wage inflation, which remained largely unchanged on last month's 44-month low."

On the continent, investor confidence in the eurozone reached a 13-month low, according to the Sentix economic index.

The overall index fell to -17.5 in December, from -12.8 in November, driven by weak economic data from Germany and political instability in France.

The current assessment index dropped to -28.5, its lowest level since November 2022, raising fears of an impending recession.

Expectations for the next six months also declined, underscoring continued pessimism about the bloc's economic outlook.

"The weakness of the German economy continues to be a burden and now the government crisis in France is adding another major economic problem for the eurozone. The two largest countries in the eurozone are dragging down the EU economy," the survey said.

Elsewhere, China's economic struggles persisted, with inflation hitting a five-month low in November.

Consumer prices rose just 0.2% year-on-year, missing expectations of a 0.5% increase, while prices fell 0.6% on a monthly basis.

The decline was partly attributed to falling food prices due to favorable weather conditions.

Core inflation, excluding volatile food and energy prices, edged up slightly to 0.3%.

China's leadership meanwhile signalled further economic support, pledging more proactive fiscal policies and moderately looser monetary measures for 2025.

Following a key politburo meeting led by President Xi Jinping, the government emphasised stabilising the property and stock markets while addressing challenges such as weak consumer spending and trade tensions with the US.

Broader economic priorities were set to be outlined at the upcoming Central Economic Work Conference.

Mining stocks in the green, Frasers sinks ahead of Boohoo meeting

On London's equity markets, heavily-weighted mining stocks surged, driven by optimism surrounding the potential stimulus measures in China.

Antofagasta led the sector with a 5.58% rise, followed by Glencore at 4.58%, Anglo American at 4.44%, and Rio Tinto at 3.84%.

Burberry Group, a luxury fashion brand with significant exposure to China, also gained 4.32% on the same sentiment.

BP advanced 4.13% after announcing a partnership with JERA, Japan's largest power generation company, to create a $5.8bn joint venture focused on offshore wind investments by 2030.

Advertising giant WPP climbed 2.77%, buoyed by news that rivals Omnicom and Interpublic were in merger talks valued at $30bn, raising speculation about broader industry consolidation.

"Investors in WPP seemed to shrug off the prospect of two arch-rivals coming together and creating a force to be reckoned with," said Dan Coatsworth, investment analyst at AJ Bell.

"On one hand, a merger of two companies this size would inevitably involve widespread cost cutting as the first course of action.

"That could give WPP a window of opportunity to try and poach some clients while its enlarged rival's management is distracted."

Meanwhile, industrial stocks Spirax Group and Weir Group rose 2.2% and 2.23%, respectively, following upgrades to 'overweight' by Morgan Stanley.

Elsewhere, IP Group added 3.73% after announcing plans to expand its share buyback programme, supported by £15m in proceeds from selling minority stakes in portfolio companies.

On the downside, Domino's Pizza Group fell 3.4% after disclosing that new fiscal measures introduced in October's Budget would add annual costs of £3m.

The company also outlined a new growth framework with franchise partners, which would require an additional £3m to £4m in annual investment starting next year.

Baltic Classifieds Group tumbled 6.45% after Deutsche Bank downgraded the stock to 'hold', while Vodafone Group slid 1.61% following a downgrade to 'neutral' by Goldman Sachs.

Frasers Group dipped 0.94% amid ongoing tensions with Boohoo, where shareholder advisory group ISS recommended rejecting Frasers-backed board appointments ahead of Boohoo's 20 December general meeting.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,352.08 0.52% FTSE 250 (MCX) 21,049.27 -0.05% techMARK (TASX) 4,716.66 0.21%

FTSE 100 - Risers

Vistry Group (VTY) 710.00p 6.05% Antofagasta (ANTO) 1,815.50p 4.91% Fresnillo (FRES) 686.00p 4.65% Glencore (GLEN) 394.85p 4.46% BP (BP.) 393.85p 4.26% Rio Tinto (RIO) 5,113.00p 3.84% GSK (GSK) 1,383.00p 2.90% Prudential (PRU) 681.40p 2.90% WPP (WPP) 891.60p 2.77% Anglo American (AAL) 2,531.00p 2.70%

FTSE 100 - Fallers

CRH (CDI) (CRH) 7,840.00p -3.14% Whitbread (WTB) 2,911.00p -2.58% BAE Systems (BA.) 1,199.00p -2.48% InterContinental Hotels Group (IHG) 9,900.00p -2.41% Auto Trader Group (AUTO) 826.80p -2.15% Next (NXT) 9,796.00p -2.04% Ashtead Group (AHT) 6,272.00p -2.00% Flutter Entertainment (DI) (FLTR) 21,320.00p -1.98% Relx plc (REL) 3,677.00p -1.84% Vodafone Group (VOD) 70.82p -1.80%

FTSE 250 - Risers

Renishaw (RSW) 3,455.00p 8.65% Fidelity China Special Situations (FCSS) 229.50p 6.50% Pagegroup (PAGE) 376.00p 5.15% Energean (ENOG) 986.50p 4.45% PZ Cussons (PZC) 89.40p 4.44% Burberry Group (BRBY) 970.00p 4.32% PureTech Health (PRTC) 172.80p 4.10% Bellevue Healthcare Trust (Red) (BBH) 140.80p 4.00% Indivior (INDV) 896.50p 3.94% IP Group (IPO) 49.95p 3.63%

FTSE 250 - Fallers

Baltic Classifieds Group (BCG) 326.00p -6.46% Babcock International Group (BAB) 501.00p -3.93% Domino's Pizza Group (DOM) 340.00p -3.41% Shaftesbury Capital (SHC) 133.80p -2.90% Carnival (CCL) 1,821.50p -2.85% Workspace Group (WKP) 530.00p -2.76% Future (FUTR) 1,081.00p -2.17% XPS Pensions Group (XPS) 356.00p -1.93% Playtech (PTEC) 731.00p -1.75% Trainline (TRN) 422.20p -1.72%