- FTSE 100 down 3 points at 10,044
- Wall Street mixed
- Primark warning sends ABF 9% lower
- Tesco performance disappoints
- M&S puts in resilient performance
4.58pm: FTSE little changed
It was a muted finish for London stocks, with the FTSE 100 down 3 points at 10,044.
“The FTSE 100 has lingered in the red following today’s update, with the outlook compounded by the realisation that non-US oil firms are likely to miss out from any Venezuela bonanza,” IG chief market analyst Chris Beauchamp said in a statement.
“Energy stocks are already widely disliked, but when Chevron, Exxon and others are poised to benefit from the midnight raid on Caracas, why bother with anyone else? Elsewhere Tesco’s slump has also detracted from the index, which remains in the red even with BAE and Rolls poised to benefit from a US defence splurge next year.”
3.55pm: In the green for the first time
Wall Street's benign open appears to have settled nerves in London, with stocks creeping into positive territory. But will it hold?
2.52pm: US stocks mixed at the open
US stocks opened mixed as investors weighed up the latest geopolitical risks and fresh labor market data. The Dow Jones added 0.1% at 49,034, while the Nasdaq fell 0.6% at 23,443 points and the S&P 500 was down 0.1% at 6,913 points.
US nonfarm labor productivity rose sharply in the third quarter of 2025, the Bureau of Labor Statistics reported, as businesses increasingly adopted technology such as artificial intelligence.
Nonfarm business sector labor productivity, the measure of output per hour worked, climbed 4.9% annualized, the fastest pace since Q3 2023, following a revised 4.1% increase in the second quarter. Economists had forecast a more modest 3.0% growth. Output in the nonfarm sector expanded 5.4%, while hours worked rose 0.5%, contributing to the strong productivity gain. Compared with the same quarter a year earlier, productivity increased 1.9%.
The surge in productivity coincided with a decline in unit labor costs, which fell 1.9% in Q3 after a 2.9% decline in Q2. Hourly compensation rose 2.9%, but productivity gains outpaced wage growth, keeping labor costs per unit of output in check. Over the past four quarters, unit labor costs increased 1.2%, while real hourly compensation, adjusted for inflation, was essentially flat, down 0.2% for the quarter and up 0.3% year-over-year.
1.45pm: More of the same for investment companies
The investment trust sector is heading into the new year with a familiar sense of urgency, according to the Association of Investment Companies, as shareholders are once again being urged to vote in the face of activist pressure.
This January, the focus is on Edinburgh Worldwide Investment Trust, where Saba Capital has requisitioned a general meeting and is seeking to replace the entire board with three new directors. While similar attempts by Saba were defeated across seven trusts last year, the AIC warns there is no guarantee of a repeat outcome and is stressing the importance of shareholder participation, with some voting deadlines approaching quickly.
Alongside the governance backdrop, the sector is marking a significant milestone. In 2025, investment trust share buybacks exceeded £10 billion for the first time, reflecting boards’ efforts to tackle wide discounts. Buybacks have risen every year since 2023 and helped narrow the average discount from 15% to 12.5% over the past year.
Even so, discounts have remained in double digits for 43 months, matching the length of the dotcom-era downturn. While historically long, the AIC argues this period may ultimately be remembered as an attractive buying opportunity, supported by rising corporate activity and continued buybacks.
12.21pm: Wall Street set for subdued start
US stock futures edged lower on Thursday after a choppy session that brought an end to multi-day rallies on Wall Street, leaving investors cautious as several political and economic catalysts loom.
Futures on the Dow Jones Industrial Average were down 0.35%, while the S&P 500 and Nasdaq 100 futures slipped 0.2%, extending earlier losses.
On Wednesday, both the Dow and the S&P 500 finished in the red despite touching fresh intraday highs, while the Nasdaq Composite managed a modest gain.
Markets have so far absorbed a steady stream of geopolitical tensions, but the mood is becoming more fragile.
Oil prices continued to fall after President Trump said Venezuela would ship up to 50 million barrels of crude to the US, with Washington signalling it will exert long-term control over the country’s oil output.
Investors are also bracing for potential legal and economic flashpoints. Attention is building ahead of a Supreme Court opinion on the legality of Trump-era tariffs, due as soon as Friday, which could mark the first serious legal challenge to the levies.
The December jobs report, also due Friday, is expected to be closely watched as one of the most important economic data points in an otherwise light calendar. Meanwhile, CES 2026 is shaping sentiment in tech, with artificial intelligence dominating discussions among executives and lawmakers.
11.11am: BAE Systems jumps on Greenland tensions
Shares in BAE Systems rose more than 6% on Thursday, extending a rally that has lifted the stock by about 20% over the past five trading sessions, as investors piled into defence names amid renewed geopolitical unease.
British and European defence stocks broadly pushed higher after tensions linked to Greenland sharpened the market’s focus on security, sovereignty and military preparedness, reinforcing defence as one of the dominant investment themes at the start of the year.
Alongside defence, companies linked to strategic materials such as rare earths were also in focus.
The rally reflects growing expectations of sustained increases in defence spending across Europe, as governments reassess military capability and supply chain resilience.
Recent political rhetoric around Greenland has underlined the strategic importance of the Arctic and critical infrastructure, adding urgency to those discussions.
The moves also reinforce a broader theme for 2026: defence spending is no longer seen as cyclical or discretionary, but as a structural priority, with large, well-established contractors such as BAE positioned to benefit from longer-term order visibility and rising budgets.
9.33am: Marks defies the retail gloom
Shares in Marks and Spencer rose 3% to 338p on Thursday, as investors took comfort from unchanged full-year guidance and supportive commentary from analysts despite a softer showing in clothing over Christmas.
Research notes from Deutsche Bank and Shore Capital argued that the Christmas update was resilient in the circumstances and that the stock remains undervalued following recent weakness.
Deutsche said Marks and Spencer had “managed to hold its full-year profit guidance expectations”, helped by a stronger-than-expected performance in Food, where higher gross margins offset weaker clothing profits.
Shore struck a similar tone, describing the update as “good news” and leaving its forecasts unchanged.
It expects Marks and Spencer to deliver profit before tax of £655 million in the current year, broadly in line with consensus, and said there was no reason to adjust its longer-term estimates.
8.27am: Pulback continues; ABF and Tesco fall
And we're off. The FTSE 100 has opened in the red, though the decline wasn't quite as sharp as predicted, with the blue-chip index falling 17 points to 10,031.
It was a generally dour day for the retailers, with Primark owner Associated British Foods falling 9% after a warning that its retail operation is struggling in a difficult market, particularly outside the UK.
Tesco, down 4%, saw some froth come off the share price as it failed to deliver an expected upgrade to forecasts. Instead, it told investors profits would be at the upper end of forecasts.
Marks & Spencer, meanwhile, served up a fairly bog-standard Christmas update, with no surprises and was rewarded with a 2% mark-up to the stock price.
Ahead of the open
The FTSE 100 is expected to open around 40 points lower on Thursday, according to spread betting firms, extending its pullback from Tuesday’s record high but keeping the index above the 10,000 mark.
After a strong start to the year, the early momentum is easing as investors pause ahead of key US economic data.
Asian markets were mixed overnight, reflecting a broader loss of urgency after Wall Street stepped back from record levels.
Both the Dow Jones Industrial Average and the S&P 500 finished lower, offering little direction as traders looked ahead to US job openings and unemployment claims later today, followed by Friday’s closely watched non-farm payrolls report.
Geopolitics also remained in focus. Investors continued to digest developments in Venezuela and rising tensions in Asia, particularly between China and Japan, which weighed on sentiment in Tokyo.
South Korean stocks bucked the trend, although Samsung Electronics edged lower despite forecasting record quarterly profits.
Oil prices stabilised after recent sharp falls, while markets are also braced for a US Supreme Court ruling on Donald Trump’s tariff powers, a decision that could have wide-ranging implications for global trade and risk appetite.