(Alliance News) – Stock prices in London were slightly higher at midday on Monday, supported by a surge in gold prices that lifted miners, while currency markets remained volatile amid dollar weakness.
The FTSE 100 index opened up 5.60 points, 0.1%, at 10,149.15. The FTSE 250 was down 7.09 points, marginally lower, at 23,310.66, and the AIM all-share was up 4.06 points, 0.5%, at 826.81.
The Cboe UK 100 was up 0.2% at 1,015.41, the Cboe UK 250 was up 0.1% at 20,541.33, and the Cboe small companies was up 0.6% at 18,240.31.
In European equities on Monday, the CAC 40 in Paris was down 0.3%, while the DAX 40 in Frankfurt was down 0.2%.
Sterling climbed to its strongest level since September against a broadly weaker US dollar, which has come under renewed pressure amid unpredictable policymaking from the Trump administration.
Sterling was quoted at USD1.3670 at midday on Monday in London, higher than USD1.3567 at the London equities close on Friday. The euro traded at USD1.1855, up from USD1.1758 late Friday.
Against the yen, the dollar was quoted at JPY153.73, sharply lower than JPY157.99 on Friday.
The Japanese yen ended Friday’s session as the strongest currency among the G10 and continued to appreciate on Monday, driven by speculation that the Bank of Japan was preparing to intervene in the foreign exchange market to support the currency.
Stocks in New York were called lower. The Dow Jones Industrial Average was called marginally lower, the S&P 500 index down 0.2%, and the Nasdaq Composite down 0.3%.
Markets are bracing for what is expected to be the main theme of the week, with Big Tech earnings from four of the so-called Magnificent Seven. Microsoft, Meta Platforms and Tesla report earnings on Wednesday, followed by Apple on Thursday.
The yield on the US 10-year Treasury was quoted at 4.21%, narrowing from 4.27%. The yield on the US 30-year Treasury was quoted at 4.80%, narrowing from 4.87%.
US Treasury yields fell as investors looked ahead to the Federal Reserve’s interest rate decision on Wednesday, with policymakers widely expected to leave rates unchanged.
Developments in Japan have also influenced US bonds.
Around midday on Friday, US authorities conducted what markets described as a ‘rate check’, when Treasury Secretary Scott Bessent sought to stabilise the yen, which had weakened sharply against the dollar, and push back down long-term US Treasury yields that had surged amid turmoil in Japanese bond markets.
Acting as fiscal agent for the US Treasury, the New York Federal Reserve asked its primary dealers what exchange rate they would receive if it began buying yen through them. The move was widely interpreted as a signal that the US government may be prepared to intervene in currency markets to support the yen.
Earlier, Bessent had blamed the surge in long-term US Treasury yields on Japan’s bond-market turmoil, which was triggered by Prime Minister Sanae Takaichi’s call for increased government spending alongside tax cuts.
On the trade front, the US will impose 100% tariffs on Canadian imports if Ottawa finalises a new trade deal with China, Treasury Secretary Bessent said.
“We can’t let Canada become an opening that the Chinese pour their cheap goods into the US,” Bessent said on ABC’s “This Week.”
During a visit to Beijing on January 16, Canadian Prime Minister Mark Carney announced a thaw in relations with China, saying the two countries had struck a “new strategic partnership” and a preliminary trade deal. Under the agreement, China is expected to reduce tariffs on Canadian canola imports to around 15% by March 1, from about 84%.
Commodity markets rallied amid a flight to safe-haven assets, most notably gold, which pushed beyond the USD5,000 level.
“There may not be any big geopolitical news to rival last week’s Greenland drama, but internal tensions in the US are helping to keep precious metals prices elevated,” said AJ Bell investment director Russ Mould.
Gold was quoted at USD5,092.10 an ounce at midday on Monday, higher than USD4,984.07 on Friday, having struck another record high at the end of last week.
Silver, which had already surged beyond the USD100 mark on Friday, continued to extend gains and was quoted at USD109.14.
Brent oil was trading at USD66.05 a barrel early Monday, higher than USD65.76 late Friday.
Back in London, miners led the FTSE 100, supported by rising metals prices. Fresnillo, Antofagasta, Anglo American and Endeavour Mining were the top performers, up 4.1%, 3.5%, 3.1% and 3.0% respectively.
At the bottom of the blue-chip index, 3i Group fell 3.9% after Barclays cut its price target to 4,740 pence from 4,835 pence, while maintaining an ‘overweight’ rating.
On the FTSE 250, Spire Healthcare jumped 19% after the London-based private healthcare group confirmed it is in early-stage discussions regarding a potential takeover.
The company named Bridgepoint Advisers and Triton as two suitors it has engaged with so far. Under the Takeover Code, Bridgepoint and Triton have until February 21, unless extended, to announce a firm intention to make an offer.
Among smaller caps, Georgina Energy surged 56% after saying funding arrangements are being progressed to support drilling of the Hussar-2 well, following confirmation from Harlequin Energy Ltd of its intention to proceed with the proposed financing.
Proteome Sciences slid 32% after launching a retail offer of up to 3.4 million shares at 1.75 pence each to raise up to GBP60,000, following a GBP840,000 fundraising completed earlier in January.
The London-based life sciences company said proceeds will fund the conclusion of a DXT licence, expansion of mass spectrometry capacity and staffing at its San Diego facility, as well as further product development. It added the funding supports rising demand after securing new biopharma contracts in Europe and the US, and will also be used to introduce new isotopic tagging products and chemoproteomic workflows.
In Germany, business sentiment remained weak in January, data from the Ifo Institute showed on Monday.
The Ifo business climate index was unchanged at 87.6 points in January, below the FXStreet-cited consensus forecast for a rise to 88.1. The current assessment index edged up to 85.7 from 85.6 in December, while the expectations index slipped to 89.5 from 89.7.
In manufacturing, the business climate index improved to minus 12.2 points in January from minus 14.6 in December. However, sentiment in the services sector deteriorated, with the index falling to minus 2.6 points from minus 2.1.
Still to come on Monday’s economic calendar are US durable goods orders.
By Eva Castanedo, Alliance News reporter
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