- FTSE 100 falls 21 points to 9,645
- Defence companies support index amid geopolitical tension
- Magnum Ice Cream Co spins off from Unilever
5.02pm: FTSE slips
The FTSE 100 finished Monday’s session 21 points lower at 9,645.
Across the Atlantic, Netflix shares remained under pressure as Paramount announced a hostile all-cash bid challenging the streaming giant’s deal for Warner Bros. Discovery.
“Netflix stock had been invincible from late 2022 until the summer of this year, surging almost 800% in that time. Looking at it through that lens, the 28% drop from the June highs is simply an overdue correction,” IG’s Chris Beauchamp said.
“Six months ago the shares were at 45 times earnings, and now trade around 20 times, which is bound to pique the interest of more than a few bargain hunters.”
4.16pm: FTSE loses lead over S&P 500 for 2025
Today was a similar story for the FTSE 100 to Friday, flat for most of the session, then a late collapse when US wakes up.
Unilver is a big drag, down 6.6% for the fourth-largest company on the index.
Housebuilders are also weighing, with Barratt Redrow and Persimmon both down over 3%, and Berkeley Group down 2.8%.
Retailers too. JD Sports and Marks & Spencer have both given up either side of 3%.
Entain, Diageo, Land Secs, Burberry and Whitbread all among the fallers as consumer-facing names bear the brunt.
The FTSE has now given up its year-to-date lead over the S&P 500, points out Chris Beauchamp at IG.
“It had all been going so well," he says, with the London index leading its New York rival in percentage returns for the year in price terms, but today’s weakness has meant that its lead has disappeared.
"When priced in the same currency the lead remains firmly intact, but even so it is a shame to see the FTSE 100 fall almost at the final hurdle."
3.20pm: Anglo coal bidding to restart soon
Potential bidders are starting to line up for Anglo American PLC's (LSE:AAL) metallurgical coal arm as the group prepares to relaunch the sale of its five Queensland mines.
The mines, which produce around 15 million tonnes a year, were previously the subject of a $3.8 billion agreement with Peabody Energy, before the US group walked away in August, citing a “material adverse change” linked to a March incident at Moranbah North.
Panmure Liberum analyst Duncan Hay highlights a handful of likely suitors, with Glencore PLC (LSE:GLEN) at the top of the list.
Even after spending $7 billion on Teck’s Elk Valley Resources coal operations last year, he flags that Glencore has approval from its board to remain an active consolidator in coal and could consider Anglo’s mines if the price is right.
2.54pm: Paramount barges into Warner Bros-Netflix party
Warner Bros Discovery shares have jumped another 6% higher after Paramount gatecrashed the $72 billion deal agreed with Netflix, with a massive $108 billion rival bid.
Despite these animal spirits, it's a mixed start on Wall Street.
The Dow Jones is down 0.1%, the S&P 500 is just below flat, while the Nasdaq is up almost 0.2%.
Back in London, the FTSE is off its worst, having been down 30 points a short while ago, now 17 points lower than where it finished last week.
1.52pm: FTSE slips
The FTSE is around its lowest of the day so far.
Unilever is leading the decline, down 6.3% now, after its Magnum Ice Cream arm was demerged.
Also among the index heavyweights, Shell and BP are both in the red as Brent crude is down 1% at $63.1 a barrel. US gas prices are down 5% too.
The fall in crude is despite news coming in on the wires that Iraq has shut down its entire West Qurna 2 production of around 460,000 barrels per day "due to an export pipeline leak", with two Iraqi energy officials being cited.
Top risers on the index are defence companies, with Babcock up 2.2%, Rolls up 2.1% and BAE up 1.2%.
1.28pm: S&N gets sceptical reaction from City analysts
Smith & Nephew PLC (LSE:SN) shares are up 0.8% after the replacement knee and hip company showed off its new financial outlook, backed by a new strategy it is calling RISE.
But analysts are pouring some dollops of scepticism all over it.
Graham Doyle at UBS says caution over the new targets is warranted as the company has achieved growth of over 6% only six times in the past 20 years, "and only two times in the past 15 years (one of which was 2021 COVID recovery)".
Seb Jantet at Panmure Liberum was also slightly incredulous, looking forward to more detail at the planned capital markets day, "which will set out the 'how' but absent a bold change in strategy (which doesn’t appear forthcoming) we remain sceptical about why SN is suddenly going to be able to achieve market growth in Ortho when it has failed to do so for many years."
12.41pm: FTSE flat, Europe mixed, US stocks seen inching higher
The FTSE 100 has had a pan-flat start to the week.
European markets are mixed, with the DAX up slightly, CAC and others in the red slightly.
US futures are modestly positive still.
Market analyst Kenny Polcari at Slatestone in Florida draws attention to Friday's consumer sentiment survey that showed a modest uptick but was still "deep in psychological recessionary territory".
Readings since 2021 have been at levels typically associated with recessionary territory, but there has been no recession.
"That’s now more than four years of Americans feeling persistently cautious despite solid macro data – think inflation falling from its post-pandemic peak (+9.4% to the current 2.8%), unemployment at 4.4% suggesting full employment, GDP at 2+% and likely to stay there, firm services PMIs, strong factory and durable goods orders, and interest rates down 175 bps from their highs.
"So, what gives? It’s the disconnect between the hard data and the consumer’s day-to-day reality.
"Prices remain far above pre-COVID levels, housing is still unaffordable, credit costs are biting, and the political noise only amplifies the unease. The macro says, 'resilient expansion,' but the consumer still feels squeezed – and sentiment measures feelings, not spreadsheets."
Indeed, prices for just about everything on both sides of the Atlantic remain high after the inflation surge from 2022 to 2024, and Polcari says the uncomfortable truth is that "the only real way for prices to meaningfully come down is through a recession".
Casting back to the recession of 1980-82 – "ugly, painful, and disruptive" – saw prices collapse as demand collapsed because the economy collapsed.
"So be careful what you wish for... disinflation without pain is the dream, but history reminds us that real price relief usually comes with a cost."
"The flip side of this rate-cutting cycle, however, is the risk of rekindling inflation, and that’s a dangerous place to be as well."
The entire situation stems from keeping rates at zero for nearly 15 years since the global financial crisis.
Polcari says "the party for 2025 is about over", and after Wednesday's mini rollercoaster does not expect markets to move much in either direction.
"I don’t think we get a meaningful selloff, but I also think we might get a 2% rally from here. And for perspective, and I say that because, a 2% move takes the S&P to 7000 — a new millennium marker for 2025 and a big, fat, round number that will get everyone excited… at least for a moment."
11.59am: Fed in focus
This week’s Fed meeting is the core question for most market commentators.
More precisely, with a rate cut widely expected, what the market is waiting for is the updated Summary of Economic Projections, aka 'dot plot'.
"Probably not," says Daniela Hathorn at Capital.com, following a "patchy run" of official data that has left "both markets and policymakers short on fresh insight", while private surveys have "hinted at resilience with soft spots in manufacturing and services PMIs, consistent with a slow-cooling economy rather than a decisive turn".
The market setup makes Wednesday's meeting outcome a "delicate" one, she adds, with implied equity volatility fading in past weeks, leaving stocks close to highs and "vulnerable to any hawkish surprise".
"A cut paired with cautious guidance may support risk initially while capping follow-through—hardly the textbook “Santa rally” set-up."
A reminder also from me that the Bank of England and European Central Bank both have rate decisions next week on the 18th.
11.45am: London IPO for bitcoin-backed lender Greengage
Some IPO news – this for the Aquis exchange rather than LSE, though. London-based fintech Greengage has outlined plans to list with an unusually ambitious twist.
Alongside the flotation, the company intends to raise fresh capital to buy bitcoin and use it to build a revenue-generating reserve that would sit at the heart of its business model.
Greengage, which is led by founder and CEO Sean Kiernan, ex of Swiss private banks Clariden Leu and Falcon, pitches itself as a relationship-driven platform for institutions, family offices and professional clients who need help navigating both fiat banking and the rapidly evolving crypto economy.
Its bread-and-butter work involves introducing clients to payment-services providers, e-money accounts and sources of credit for small and mid-sized firms. It says more than 40 clients are active and the pipeline extends to over 60 prospective accounts.
10.53am: Magnum p/e
Shares in The Magnum Ice Cream Company (EURONEXT:MICC, LSE:MICC, NYSE:MICC) are up 1.6% on its first day of trading in Amsterdam and London.
The shares started at €12.20, implying a market capitalisation of about €7.5 billion, below the €12.80 reference price set by Euronext on Friday and "starkly lower" than earlier estimates of around €15 billion, says Diana Radu, analyst at Morningstar.
This values the company at approximately 8 times its expected 2025 adjusted earnings. Magnum P/E, if you will (one for Tom Selleck fans maybe).
She adds: "Magnum is headquarted in the Netherlands and has its primary listing on Euronext Amsterdam, so unlike Unilever, it does not qualify for inclusion in the FTSE UK index series.
"As a result, UK index-tracking funds that receive Magnum shares in the spin-off but benchmark against FTSE UK indices are required to sell, which creates some short-term downward pressure on the share price after listing."
Still, she says she remains "optimistic on the longer-term outlook" as the standalone company "gains a refreshed management team and a more focused, category-specific strategy".
10.06am: Trump comments cast more doubt on Netflix-WBD deal
Donald Trump has thrown fresh uncertainty over Netflix's $72 billion takeover of Warner Bros Discovery, warning that the combined group’s enlarged market share “could be a problem”.
His off-the-cuff remarks, made last night, were enough to rattle both prediction markets and early trading, with bets on the deal closing by 2026 dropping sharply.
The acquisition would fuse the world’s largest subscription streamer with HBO Max and a major Hollywood studio, a combination almost certain to trigger a lengthy antitrust review.
Netflix is reportedly preparing a robust defence, insisting the market is far broader than subscription video.
Politics adds further intrigue. Warner Bros. spurned Paramount Skydance, a studio with longstanding Trump connections, to pursue Netflix, a choice that may colour the debate in Washington.
9.20am: Pru up on new of Indian JV's IPO
Prudential PLC (LSE:PRU) is up 3.3% now, following confirmation over the weekend that it filed papers ahead of a potential public listing of its Indian asset management joint venture.
The initial public offer of ICIC Prudential Asset Management Company Ltd, which had been signposted previously, sees Prudential proposing to sell a 9.91% stake out of its 45% shareholding.
In addition to the potential IPO, Pru also continues to consider a private sale of 2% of the JV to partner ICICI Bank.
UBS has estimated the Indian business could be worth up to $10.4 billion in total, implying a net cash value to Prudential of around $4.5 billion.
Panmure Liberum analyst Abid Hussain says the proceeds are likely to contribute to additional share buybacks.
"If the market will not assign fair value to the stock, it pays to list/sell/divest component parts of the business that are trading on materially higher multiples than the group," he says.
8.40am: Tensions over Taiwan
The FTSE is now up 9 points at 9,676, with wider European markets not moving much either.
Germany's DAX, Spain's IBEX and Italy's MIB are also flat, while France's CAC is down 0.3%.
Market analyst Derren Nathan at Hargreaves Lansdown says the London index is "holding its head above water this morning after a weak session on Friday".
He notes that this follows a mixed start to the week for Asian stocks as traders digested the ratcheting up of tensions between China and Japan.
"Tokyo accused the Chinese military of locking radar onto its military jets. This latest escalation comes amidst increased Chinese military activity in the waters between Taiwan and Japan," he says.
Japanese authorities have been swift in advising calm.
Nathan notes that this comes after Japan’s newly-elected Prime Minister Sanae Takaichi’s stated her willingness to help defend Taiwan should China attack the island, whose sovereignty it continues to deny.
"The territory’s pivotal role in the global semiconductor industry, at a time where technology is proving to be the backbone of global growth, means that the stakes here are far more than just regional," he says.
This explains support for London's defence sector.
Looking back at last week, Richard Hunter at Interactive Investor says US markets "appear to have settled into a rhythm of steady but unspectacular gains, with inspiration limited in the absence of any fresh catalysts".
US inflation data on Friday came in marginally shy of the 2.9% estimate, which did nothing to alter expectations for a 0.25% interest rate cut from the Federal Reserve this week.
"Of rather more interest will be the Fed’s revised outlook for next year, where several further reductions are currently being pencilled in by investors," says Hunter.
More positively for investors, China reported export numbers and a $1 trillion trade surplus, which Hunter says have "clearly seen the benefit of the previously announced tariff truce between itself and the US, especially given its focus on higher value exports such as rare earth materials, electric vehicles and robotics".
8.14am: Unilever drags on FTSE at open
The FTSE 100 has started indecisively, essentially flat, held back by a 3% decline for Unilever PLC (LSE:ULVR) after the demerger of its ice cream wing.
The consumer goods group is the only one of the index's top 10 moving more than 0.7%.
Miners, oilers, banks and other heavyweight sectors are little moved.
Defence stocks are supporting the index, with Babcock up 1.2%, and both BAE Systems and Rolls-Royce up 0.8%. On the FTSE 250, Qinetiq and Avon Technologies are up 1% and 0.5%.
Geopolitical headlines are boosting the sector, most likely.
Topping the blue-chip early risers are Vodafone, up 2% after a Barclays upgrade; and Prudential, up 1.6%. Pru confirmed over the weekend that it filed papers ahead of a potential IPO of the ICIC Prudential Asset Management Company joint venture.
7.58am: Smith & Nephew unveils new strategic plan
Smith & Nephew PLC (LSE:SN) has launched a new corporate strategy designed to give stronger returns for shareholders, alongside issuing medium-term financial targets through to 2028, alongside updated guidance for 2025 and a provisional outlook for accelerating growth in 2026.
The knee and hip replacement maker has named the strategy RISE (as ever it sounds like it has also been a team name in The Apprentice), based on the plan to improve financial and operational performance via four pillars: Reaching more patients, Innovation, Scaling through investment, and efficient Execution.
The strategy builds on progress made under the company’s previous 12-point plan transformation, put in place when chief executive officer Deepak Nath started in 2022.
Says Nath today: "Smith+Nephew's new RISE strategy represents an ambitious but achievable new chapter."
7.39am: Unilever splits from Magnum Ice Cream Company
There will be a new company trading in London today, and Amsterdam and New York, as The Magnum Ice Cream Company (EURONEXT:MICC, LSE:MICC, NYSE:MICC) was spun out of Unilever PLC (LSE:ULVR) at the weekend.
TMICC has issued 612,259,739 ordinary shares, with a nominal value of €3.50 apiece, giving the company a nominal valuation of €2.14 billion.
Chief executive Peter ter Kulve says: “Today is a proud milestone for everyone associated with TMICC. We became the global leader in ice cream as part of the Unilever family. Now, as an independent listed company, we will be more agile, more focused, and more ambitious than ever.”
Unilever will complete a share consolidation after the market closes today, designed to maintain comparability between its share price and metrics like earnings per share and dividends per share. The consolidation ratio should be announced later today.
7.15am: FTSE set for stuttering start
The FTSE 100 is expected to make a faltering start on Monday, ahead of a week of central bank meetings around the globe, against a background of high geopolitical tensions and an underground hum of concern around a potential market bubble.
London's blue-chip index has been called 8 points lower on the futures market, after finishing last week on a weak note, with a fall of 43 points, down 53.5 over the whole five days to end at 9,667.01.
US futures are cautiously positive this morning, up 0.1-0.21%, after closing last week with the S&P 500 and Nasdaq inching higher to extend their recent winning streaks.
The Federal Reserve is the central focus of the week, with an interest cut anticipated but not a unanimous decision.
Elsewhere, there will be policy meetings for the Reserve Bank of Australia, the Bank of Canada and the Swiss National Bank, which are all expected to keep rates unchanged.