Midday market roundup: ‘Calm’ trade as GSK supports FTSE 100

London’s FTSE 100 was slightly higher during a more tranquil day for European equities so far on Wednesday, but markets still lacked inspiration as trade war worries linger.

The FTSE 100 index rose 12.01 points, 0.1%, at 8,582.78. The FTSE 250 declined 30.17 points, 0.2%, at 20,623.09. It traded off session lows, however. The AIM All-Share rose 0.72 of a point, 0.1%, at 713.09.

The Cboe UK 100 was up 0.2% at 859.81, the Cboe UK 250 fell 0.2% at 18,029.39, and the Cboe Small Companies was up slightly at 15,499.38.

In Frankfurt, the DAX 40 was slightly lower, while the CAC 40 lost 0.1%.

There was a ‘sense of calm’ in global markets on Wednesday, AJ Bell analyst Russ Mould commented. It followed supportive trade in New York overnight.

‘The elephant in the room remains China as Donald Trump has not backed down from a trade spat. Retaliation is underway and that’s led to the cancellation of a meeting between the two country leaders. The decision by the US Postal Service to stop accepting parcels from mainland China and Hong Kong shows the severity of the matter. That’s disastrous for big Chinese e-commerce platforms that send goods to the US including Shein and PDD-owned Temu,’ the analyst said.

‘Western retailers might secretly welcome the move as it temporarily removes the type of competition that has undercut them on price.’

US markets are called to open lower on Wednesday after Tuesday’s gains. The Dow Jones Industrial Average is called down 0.1%, the S&P 500 0.5% lower and the Nasdaq Composite down 0.9%.

Alphabet shares were 6.6% lower in pre-market dealings, while AMD is 8.8% lower.

‘As we mentioned on Tuesday, the majority of companies on the S&P 500 that have reported earnings, have beaten estimates, and the market is rewarding stocks who do beat earnings estimates by a higher margin than average. This also means that the opposite is true. Companies are getting punished if their earnings disappoint. This is why Alphabet is expected to open significantly lower on Wednesday, and chip maker AMD could follow suit,’ XTB analyst Kathleen Brooks commented.

Google owner Alphabet said revenue climbed to $96.47 billion in the three months to December 31 from $86.31 billion a year prior, a touch below the $96.58 billion consensus.

Brooks added: ‘While Google builds out AI models, AMD is providing the hardware. It also reported results last night, and like Google it also missed the mark. Even though Q4 revenue topped estimates, data centre revenue was weaker than expected at $3.86 billion, vs. $4.09 billion expected.’

Earnings from GSK were better received in London, with the stock rising 6.4%. It raised its long-term sales guidance and announced a £2 billion share buyback, reflecting optimism about its late-stage drug pipeline.

GSK said pretax profit in 2024 fell 43% to £3.48 billion from £6.06 billion a year prior, though revenue increased 3.5% to £31.38 billion from £30.33 billion, ahead of the £31.05 billion company compiled consensus.

Another healthcare stock on the up was Novo Nordisk over in Copenhagen. It traded 3.6% higher.

The Bagsvaerd, Denmark-based pharmaceuticals firm said net profit surged 21% to kr100.99 billion, or $14.06 billion, from kr83.68 billion in 2023.

Net sales climbed 25% to kr290.40 billion from kr232.26 billion.

Back in London, AIM-listed Gfinity surged 55% as it struck a deal which allows it to continue a foray into ‘sectors which we think are exciting’.

It has struck a licence agreement with 0M Technology Solutions. The exclusive pact will see Gfinity commercialise 0M’s advanced artificial intelligence technology, Connected IQ, an offering targeted at the connected video market.

Gfinity CEO David Halley said: ‘The funding allows us to continue our push into sectors which we think are exciting for the Company, namely Connected TV, Online Video and Artificial Intelligence. In addition, through our commercialisation of CIQ, we will gain an experienced team of Data and AI specialists to support our development.’

Gfinity said it has also raised £245,000 from a subscription.

Fresnillo rose 5.0% and Endeavour Mining climbed 1.3% as gold prices continued to rise.

Gold rose to $2,869.66 an ounce midday Wednesday, from $2,840.78 at the time of the London equities close on Tuesday. Bullion hit a record high of $2,877.02 an ounce on Wednesday morning.

A number of factors, from trade tensions, geopolitics and tepid US data are supporting the precious metal, ActivTrades analyst Ricardo Evangelista noted.

‘Gold prices rose in early Wednesday trading, reaching a fresh all-time high. The precious metal is finding support amid dollar weakness and growing apprehension over the escalating trade war between the US and China and its likely negative impact on global economic growth prospects. The US dollar’s decline, which began after the administration’s last-minute U-turn on imposing additional tariffs on imports from Mexico and Canada, continued Tuesday following the release of disappointing labour and industrial data indicating a slowdown in the world’s largest economy,’ the analyst said.

‘A weaker dollar is supportive of gold prices. At the same time, US tariffs on China and Beijing’s retaliation are ominous for the global economy, increasing the appeal of haven gold. This demand is further reinforced by renewed uncertainty in the Middle East following Donald Trump’s comments about taking over Gaza and displacing the Palestinian population.’

Against the dollar, the pound was up at $1.2533 early Wednesday afternoon, from $1.2481 at the time of the London equities close on Tuesday. The euro rose to $1.0414 from $1.0376. Against the yen, the dollar faded to JP¥152.82 from JP¥154.58.

On the data front, there is the ADP US jobs report coming at 1315 GMT on Wednesday, roughly 48 hours before the official nonfarm payrolls data.

A barrel of Brent fell to $75.29 early Wednesday afternoon from $76.19 at the time of the closing bell in London on Tuesday.

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