London Open: FTSE Nudges Up as Investors Digest Jobs Data

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Summary:

London stocks inched higher as investors assessed UK jobs data, with wage growth accelerating and unemployment steady at 4.4%. Miners gained, while BT Group and Airtel Africa fell on downgrades.

London stocks were a smidgen higher in early trade on Tuesday as investors mulled the latest UK jobs data.

At 0835 GMT, the FTSE 100 was up 0.1% at 8,772.00.

Figures released earlier by the Office for National Statistics showed that pay growth accelerated in the three months to December, while the unemployment rate was steady.

The unemployment rate was unchanged at 4.4%, versus expectations for it tick up to 4.5%.

Average earnings including bonuses rose by 6% on the year, up from 5.5% in November. Excluding bonuses, wages grew 5.9% - the fastest rate in eight months - up from 5.6%.

Liz McKeown, director of economic statistics at the ONS said, said: "Growth in pay, excluding bonuses, rose for a third consecutive time, with increases in both the private and public sector."

The figures also revealed an estimated 819,000 vacancies in November 2024 to January 2025, down by 9,000 from August to October 2024.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "Today’s UK wage data came in mixed - December’s growth was slightly stronger than the economists had expected but fell short of the Bank of England's forecast.

"There’ll be debate about whether this is a signal to worry about inflation again, but reading between the lines, this shouldn’t hinder the Bank of England’s plans for a gradual reduction in rates over 2025, with markets still anticipating a couple of cuts by year-end."

In equity markets, Antofagasta gained as the copper miner reported an 11% jump in full-year earnings before interest, tax, depreciation and amortisation and said demand for copper remained strong.

Glencore rose as Morgan Stanley upgraded shares of the miner to ‘overweight’ from ‘equalweight’ and said it was its new "top pick".

On the downside, BT Group slid after a downgrade to ‘sell’ from ‘buy’ at Citi, which cut its price target to 112p from 200p as it noted that Openreach was facing a revenue decline. Airtel Africa also lost ground after a downgrade to ‘neutral’ from ‘buy’ by the same outfit.

InterContinental Hotels was in the red despite posting a rise in full-year profits, lifting its dividend, and announcing a $900m share buyback programme and the acquisition of the Ruby brand for $116m.

BHP was trading down as it slashed its dividend and reported a sharp fall in half-year profits as lower iron ore prices caused by weaker demand from China offset higher copper earnings.

Plus500 slumped even as it announced a $110m share buyback and hailed strong full-year results.

Source: Sharecast

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Justin

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The BSE Sensex fell 360 points, or 0.5%, to 75,626 in early trading on Tuesday, touching its lowest level in three weeks after edging up in the previous session.

Weak Q3 earnings results and ongoing foreign fund outflows continued to dampen sentiment.

Caution also built amid global trade uncertainty and a widening trade deficit in January, while the US stock market was closed on Monday for a holiday.

However, traders were anticipating the release of China's monthly key lending rate fixes, the FOMC minutes, and speeches from several Fed officials to guide the central bank's policy path.

Almost all sectors traded in the red, with consumer durables, metals, and autos seeing the biggest losses.

The Nifty 50 fell 0.6% to below 22,900, with notable losses from Mahindra & Mahindra (-1.8%), IndusInd Bank (-1.7%), Adani Ports (-1.7%), Tata Motors (-1.5%), and Tata Steel (-1.5%)

Source:Trading Economics

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Owen Li

Economic

The dollar firmed on Tuesday as traders weighed tariff worries and the path to U.S. rate cuts, while the Australian dollar held steady near two-month highs after the Reserve Bank of Australia delivered an expected rate cut but cautioned on further easing.

The RBA cut its cash rate by 25 basis points to 4.10% on Tuesday in its first easing since the 2020 pandemic, but was cautious about prospects of further policy easing.

That left the Australian dollar steady at $0.6351 after an initial burst of choppiness following the decision. The Aussie touched a two-month high of $0.6374 on Monday and is up 2.4% in February on easing trade war worries.

Prashant Newnaha, a senior Asia-Pacific rates strategist at TD Securities, said the RBA's statement struck the right balance without boxing in the central bank to delivering a follow-up cut. "That said we retain our forecast for cuts in May and August."

Swaps imply just a 20% probability for a follow-up cut in April, although a move in May is still almost fully priced in. (0#AUDIRPR)

Speaking at a media conference, Australia's top central banker Michele Bullock said market pricing for two more quarter-point cuts this year was ambitious and policy makers were more cautious about the outlook.

Kerry Craig, global market strategist at J.P. Morgan Asset Management said the RBA's move looks more like an "insurance" cut, which keeps it in step with global central banks, rather than the start of an aggressive easing cycle.

"This easing cycle will certainly not be a sprint to the end, but rather a slow walk on the path towards lower rates and further cuts ahead."

Investor focus this week will be on Wednesday's release of minutes of the Federal Reserve's meeting in January to gauge how policymakers have sought to weigh the risk of a broader tariff war in the wake of President Donald Trump's trade policies.

Data last week showed U.S. consumer prices increased at the fastest pace in nearly 18 months in January, reinforcing the Fed's message that it was in no rush to resume cutting rates amid growing economic worries.

"Trade policy uncertainty is at a record high ... and given that the labour market is solid, there is no compelling case to cut rates imminently," ANZ strategists said in a note.

"An extended pause during the first half of this year looks justified and will give the Fed time to assess the impact of trade measures on inflation."

ANZ now expects rate cuts to resume in the second half of 2025, with a further 75 bps of easing anticipated. Markets though are not as optimistic, with traders pricing in 40 bps of cuts for this year.

In Asia, the yen was on the back foot after its recent gains as strong growth data bolstered odds of the Bank of Japan raising interest rates again this year, with July seen as a live meeting.

The yen was last at 152.165 to the dollar, down 0.4% on the day. Japan's solid October-December GDP data on Monday, coupled with recent inflation numbers, have helped lift the yen. It is up nearly 4% against the dollar so far in 2025.

The dollar index , which measures the greenback against six other major currencies, was 0.27% higher at 107.01, still not far from the two-month low of 106.56 it touched on Friday.

The euro was 0.27% lower at $1.045475, while sterling eased 0.2% at $1.2593 as traders braced for talks in Saudi Arabia later on Tuesday aimed at ending the Ukraine war.

The New Zealand dollar fell 0.55% to $0.57195 ahead of the Reserve Bank of New Zealand meeting on Wednesday, where the central bank is widely expected to cut rates by 50 bps.

Source:Reuters

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Acting President Choi Sang-mok presides over a Cabinet meeting at the Government Complex Seoul, Tuesday.

Securities firms required to prevent naked short selling, or face penalties

Authorities have mandated measures to prevent naked short selling for corporations and securities firms ahead of the resumption of short selling next month, according to the Financial Services Commission (FSC) on Tuesday.

The country’s financial regulator said violations would result in penalties and fines of up to 100 million won ($69,000).

In addition, short-selling conditions will be standardized to ensure that retail investors are not disadvantaged compared to institutional and corporate investors.

These regulatory improvements are included in the revised enforcement decree of the Capital Markets Act, which was approved at a Cabinet meeting earlier in the day and will take effect on March 31 when short selling is scheduled to fully resume.

Korea imposed a ban on short selling in November 2023 after uncovering a series of naked short selling violations involving several global investment banks. The ban was originally set to expire at the end of June 2024 but was pushed back to March 31 this year.

Under the revised rules, corporations intending to short sell listed stocks must establish internal control standards to prevent naked short selling, which involves selling shares before securing a borrow.

Corporations that meet the disclosure threshold — holding short positions of at least 0.01 percent of outstanding shares or 1 billion won — along with market makers and liquidity providers must manage short positions on a per-stock basis and establish an electronic system to prevent naked short selling.

Additionally, these institutions are required to submit daily stock-by-stock short position data to the Korea Exchange’s central monitoring system within two business days.

Even if naked short selling does not occur, corporations and securities firms that fail to comply with preventive measures will be subject to fines of up to 100 million won. For securities firms and other financial investment companies, sanctions may also be imposed on the institution and its employees.

Short-selling orders executed on the alternative trading system (ATS), set to launch in March, will be subject to the same short-sale marking requirements as those on the stock exchange.

Korea’s first ATS, Nextrade, is scheduled to launch on March 4.

“We will ensure thorough implementation of the short-selling reform measures as we prepare for the resumption of short selling,” an FSC official said.

Source: Koreatimes

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Warren Takunda

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Shares in Asia were mostly up Tuesday, with Chinese technology stocks surging after Chinese President Xi Jinping met with entrepreneurs this week in what is seen as a show of support to the technology industry.

Hong Kong’s Hang Seng rose 1.64% to 22,986.88, while the Shanghai Composite added 0.15% to 3,360.95. Japan’s Nikkei 225 was up 0.39% to 39,296.11 after Japan’s economic growth for the fourth quarter beat forecasts. In other regional markets, Australia’s S&P/ASX 200 slipped 0.53% to 8,491.70. while South Korea’s Kospi was up 0.43% to 2,621.73.

China’s technology stocks rallied Tuesday. E-commerce firm Alibaba and smartphone maker Xiaomi both saw their stock price surge over 4%, while video games firm Tencent and online services company Meituan also gained.

Chinese President Xi Jinping’s meeting with entrepreneurs on Monday, including Alibaba founder Jack Ma, is a signal of assurance and stability after a crackdown on the technology industry in recent years.

“The optics of Xi’s rare sit-down with tech executives are impossible to ignore. This isn’t just another policy meeting — it’s a calculated move, reflecting Beijing’s growing concerns over economic momentum and China’s position in the global tech race,” said Stephen Innes, managing partner of SPI Asset Management in a note.

“For investors, the takeaway is clear: China’s leadership is throwing its weight behind tech once again. Whether this translates into long-term policy shifts or is just a short-term confidence play remains to be seen,” he said.

Eyes are on whether China and Hong Kong’s stock markets will continue on a bull run, with Chinese stocks outperforming Japan, U.S. and India markets so far this year.

According to a report by BofA Securities, key drivers for the Chinese stock market include a better than expected U.S.-China relationship, with Trump only imposing 10% additional tariffs so far, as well as the emergence of DeepSeek as a rival to leading U.S. artificial intelligence models.

Meanwhile, markets around the world are nervously watching what upward pressure may come from tariffs that Trump has announced recently. But analysts now think Trump may ultimately avoid triggering a punishing global trade war.

His most recent tariff announcement will not take full effect for at least several weeks, raising hopes that there is still time for countries to negotiate with Washington.

In energy trading, benchmark U.S. crude added 54 cents to $71.25 a barrel. Brent crude, the international standard, rose two cents to $75.24 a barrel.

In currency trading, the U.S. dollar strengthened to 151.91 Japanese yen from 151.51 yen. The euro cost $1.0465, down from $1.0484.

Source: AP

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Owen Li

Economic

Facing an unpredictable 2025, Australia is striving to meet economic challenges through two strategies, committing to domestic industry incentives under the Future Made in Australia Act and promoting open trade and global investment reflected in the Trading Nation report. The fusion of these strategies aims to foster the domestic workforce and support renewable energy and technological advancement while maintaining an open global trading system to counter economic coercion and ensure continued national prosperity.

After a positive 2024 in which Australia successfully encouraged China to reverse remaining trade restrictions, everyone expects 2025 to be a difficult year for Australia’s economy. Leading economists have predicted that the most likely impacts of US President Donald Trump’s second administration on Australia will be negative, including slower progress to net zero emissions, higher US inflation and weaker Chinese economic growth.

How is Australia positioned to cope with what 2025 might throw at it?

The current state of Australia’s economic statecraft is illustrated by two developments at the end of 2024. The Australian Parliament passed the ‘Future Made in Australia’ Act, setting out industry policy to build competitive new industries for the clean energy economy. At the same time, Australia’s Department of Foreign Affairs and Trade also launched the ‘Trading Nation’ report on how open trade and investment contribute to Australians’ prosperity.

These developments show a country trying to walk a fine line between intervention and openness.

For Australia, more active government involvement in markets through the Future Made in Australia plan is a significant ideological departure from the recent past. With a global retreat from open economics and a reemergence of nationalist approaches to trade, countries like Australia have had to adapt. As Australian Treasurer Jim Chalmers noted, ‘it would be preposterously self-defeating to leave our policies unchanged in the face of all this industry policy taking shape and taking hold around us’.

Australia is responding to these geostrategic forces by competing with industry incentives offered by other countries, including the United States, Japan, South Korea, Canada and the European Union to nurture the development of new industries. A Future Made in Australia is investing AU$22.7 billion (US$14.3 billion) into Australia’s workforce, renewable energy, supporting investment in Australia, technological and industrial renovation and utilisation of natural resources and critical minerals. It aims to produce more goods domestically, creating more job opportunities for Australians.

In contrast, the Trading Nation report emphasises the role of free and open trade in Australia’s prosperity. Around 31 per cent of Australian economic output is supported by trade activity and one in every four jobs are linked to trade.

Global trade regulation, such as through the World Trade Organization, is described as one of the pillars of Australians’ prosperity, supporting the stability of the trading environment and providing Australian exporters with access to markets. Australia’s 18 bilateral and regional free trade agreements on average boost trade by 13 per cent and covered around 78 per cent of Australia’s two-way goods and services trade as of 2022. New, creative accords like the Singapore–Australia Green Economy Agreement encourage trade, open business opportunities and facilitate investment in industries that promote the net zero transition.

The report also makes the case for foreign investment to facilitate access to more capital and investment, with Australia’s openness to foreign investment contributing to the country’s development, job creation and improvement of living standards. Sectors like banking, energy, infrastructure, resources and agriculture — essential to achieving the goal of net zero — are largely dependent on foreign investment.

Placed side-by-side, the two reports illustrate a country trying to find a balance between different imperatives. This is in line with a report by the Asia-Pacific Development, Diplomacy & Defence Dialogue (AP4D), which argued that it is in Australia’s interests to promote a transparent, predictable and rules-based global trading system alongside industry measures.

This is an important message to keep in focus in 2025 with the likelihood of another US–China trade war and tit-for-tat protectionism in response to US tariffs.

It is worth remembering that an open global trading system is a vital counter to attempted economic coercion, allowing targeted industries to seek out alternative markets. Following China’s 2020 trade restrictions, Australia’s ability to withstand China’s economic coercion by redirecting targeted commodities was a factor in Beijing deciding to reverse remaining trade restrictions.

During the period of attempted economic coercion, there were advocates focused on ‘friendshoring’ — selling more to countries perceived as allies and friends, particularly collaborating on supply chains and foreign investment. But this can be difficult and expensive, working against economic logic. Diversification is better achieved by agnostically increasing the number of markets, reducing the risk of disruption in any one market.

It is also important for Australia to keep sight of the importance of the global economic system and its significant role within it. Australia has actively supported and played a leading role in the creation of global rules that underpin the rise of global trade, even being one of the founding members of the World Trade Organization. Particularly during the second Trump administration, Australia should focus on cooperating with like-minded states to ‘save the furniture’ of the global trading system.

Despite the challenges that 2025 will bring, Australia’s economic statecraft cannot focus only on domestic industry policy — it must also promote open trade and investment.

In an unpredictable global economic environment, Australia’s policy responses need to continue to strike the right balance. This means that in 2025, Australia needs to continue its approach of supporting the global trading system alongside industry measures.

Source：Eastasiaforum

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Justin

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Fundraising through infrastructure bonds is set to become more expensive for Indian lenders that have used them to raise record funds as investors demand higher returns amid increased debt supply.

Domestic lenders have raised a record 892 billion rupees ($10.26 billion) in this financial year, with some, including State Bank of India, likely to tap this route before the fiscal year ends in March.

"Over the last month, demand from long-term investors has been weak, resulting in widening of spreads in the long-term corporate bond segment," said Ketan Parikh, head of fixed income at ICICI Prudential Life Insurance.

Rising debt issuances, especially by banks and other long-term issuers, have also led to spreads widening between corporate and government bond yields, he added.

State-run Bank of Maharashtra, Punjab National Bank and Bank of India have raised a total of 72.52 billion rupees, about 55% of their 130 billion-rupee target, including greenshoe options.

The lenders have also had to pay a higher premium over the corresponding maturity government bond yield compared to their previous debt issuance.

In July, Bank of India sold 10-year infra bonds at a spread of 56 basis points above the 10-year benchmark bond yield, while Bank of Maharashtra raised funds at a spread of 85 bps over the benchmark yield. Both lenders had to pay an additional spread of 15 bps for the sale.

None of the lenders responded to Reuters' emails seeking comment.

"Large institutional investors, having met their minimum regulatory investment requirements, are now demanding higher yields amid expectations of a substantial state debt supply through March," said Venkatakrishnan Srinivasan, founder and managing partner at debt advisory firm Rockfort Fincap.

Indian states are scheduled to borrow 2.25 trillion rupees in the last five weeks of the financial year.

While yields in the secondary market have gone up by 6-8 bps since the central bank's rate cut decision earlier this month, investors are constantly bidding at higher levels for new debt placements.

Along with the lenders, other state-run companies such as REC, PFC, NABARD and IIFCL, closed their issues recently without meeting their targets, signalling overall investor fatigue.

Indian lenders unable to raise planned quantum despite paying higher yields: Indian banks' infra bond funding to turn expensive as investors demand higher returns_1

Indian banks' infra bond funding to turn expensive as investors demand higher returns_1

Source:Reuters

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Source: Sharecast

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Source:Trading Economics

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Source: Koreatimes

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