The FTSE Finish Line: January 15 - 2025
FTSE Gains As Homebuilders Are Bid On Softer Inflation, BoE Cut Bets Surge
The FTSE 100 has increased by over 1%, while the FTSE 250, which earns a larger share of its revenue from domestic sources, has risen by 1.4%, on course for its largest daily increase since July. The anticipation of lower interest rates following the inflation report is driving a rise in shares of UK homebuilders. A collection of these stocks is climbing by 3.8%, with Vistry Group leading the way with a 7.8% increase, despite indicating a challenging outlook. The UK homebuilder is also outperforming the broader STOXX 600, and a European group of real estate stocks has risen by 1.2%, making it the top-performing sector today. Conversely, luxury stocks have fallen by 0.7%, making them the worst-performing sector.
Single Stock Stories:
The index of UK housebuilders climbed 3.4% following data showing an unexpected slowdown in British inflation in December. Headline inflation eased to 2.5% from 2.6% in November, while core inflation fell to 3.2% from 3.5%, aligning with the Bank of England's (BoE) forecast for December.FTSE 100 home builders including Barratt, Redrow, Berkeley, Persimmon, Taylor Wimpey, and Vistry gained between 3% and 5.3%, while midcap builders Bellway and Crest Nicholson rose 4.4% and 3.2%, respectively.
Shares of British restaurant and pub operator Mitchells & Butlers rose 5%, ranking among the top gainers on London's FTSE 250 index. The company reported a 3.9% year-on-year increase in like-for-like (LFL) sales during the 15-week period ending January 11, driven by strong demand during the Christmas season, including record sales on festive days. Analysts at Jefferies noted that "M&B is well-positioned to gain market share in a cost-pressured sector." However, in 2024, Mitchells & Butlers shares have seen a ~3.5% drop.
Shares of British electrical retailer Currys surged 11.5% after the company announced an expected fiscal year 2025 adjusted profit before tax of £145 million–£155 million ($177.35–$189.58 million), surpassing analysts’ consensus of £140 million. Currys also reported a 2% year-on-year rise in Group like-for-like sales during the 10-week Christmas trading period ending January 4. Additionally, the board anticipates paying a year-end dividend. Notably, the stock has risen 87.9% in 2024.
Broker Updates:
Diploma shares rose 2.8% to 4,197p after the technical products and services provider reported 7% organic revenue growth in Q1, surpassing Jefferies' forecast of 6%. The company described its Q1 performance as "strong" and in line with expectations, noting that underlying sector trends remained broadly consistent with the prior year. Diploma reaffirmed its full-year guidance and highlighted that its strong operating margin met expectations. The stock has gained approximately 23.2% in 2024.
Technical & Trade View
FTSE Bias: Bullish Above Bearish below 8225
Primary support 8000
Below 8000 opens 7855
Primary objective 8600
Daily VWAP Bullish
Weekly VWAP Bullish
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!