FTSE 100 tumbles on inflation jitters; Glencore slumps, eyes LSE exit

• FTSE 100 sheds 54 points
• UK inflation climbs to 3%
• Glencore eyes listing elsewhere

3.59pm: Glencore leads drop as FTSE 100 heads for decline

The FTSE 100 entered late trading lower, led by Glencore PLC as the miner shed 5.0% after flagging a drop in profit for last year and a potential listing switch from London.

Overall, the index was down 54 points at 8,712 as Wednesday’s close approached.

easyJet was also among fallers, alongside British Airways owner IAG, after peer Jet2 PLC highlighted growing costs pressures and warned margins could be squeezed ahead.

Housebuilders dropped too, weighed down by dashed hopes for an interest rate cut by the Bank of England next month on figures showing headline inflation rose to 3% in January.

SSE PLC and Antofagasta PLC led the risers in the meantime on a muted day in London, with the latter up 1.3% following a double upgrade by JPMorgan analysts.

The FTSE 350 also headed lower, falling 31 points to 4,771, while the AIM all-share fell four points to 720.

Helium One was among small-caps in the green, after confirming drilling had got underway at Jackson-31, part of its Galactica helium project in Colorado… Read more

3.30pm: Declines on Wall Street

Wall Street faced a negative start on Wednesday as traders awaited Federal Open Market Committee minutes later in the day and weighed further tariffs under Donald Trump.

The S&P 500, having closed out Tuesday’s session at a record, fell 0.2% after the opening bell, while the Nasdaq and Dow Jones eached moved 0.3% lower.

FOMC minutes later on Wednesday, after the central bank held interest in January, have drawn attention as investors gauge the direction of monetary policy ahead.

A string of tariffs since Trump took office have threatened to cloud sentiment, with the latest measures emerging on Tuesday, targeting autos, chips, and pharmaceuticals.

These would be “in the neighborhood of 25%,” the president said, applying to all foreign automakers and starting as soon as April 2.

“Trump’s latest remarks only added to an already jittery market atmosphere this week,” City Index analyst Fawad Razaqzada said, as preliminary talks between the US and Russia over the Ukraine war took place, but without the latter.

2.48pm: Man U posts loss as Champions League absence hits

Manchester United PLC has unveiled a loss for the second quarter as its absence from the top flight of European football hampered revenue.

A £27.7 million loss was recorded for the three months to December 31, the club reported Wednesday, against a £24.4 million profit a year earlier.

Revenue slipped 12% in the meantime to sit at £198.7 million, driven by a 42.1% slump in broadcasting turnover after the men’s team failed to make this season’s Champions League.

Losses, which sat at £26.3 million for the half year, come despite a string of cost-cutting measures under minority owner Jim Ratcliffe, which has included over 200 layoffs.

Guidance for £650 million to £670 million in revenue was reiterated, while adjusted earnings were said to be on course to hit the high end of the £145 million to £160 million range.

Shares dropped 1.9% to US$15.23.

1.40pm: Antofagasta heads risers on double JPM upgrade

Antofagasta PLC headed Wednesday's FTSE 100 risers after bagging a double upgrade from JPMorgan analysts.

Granting an ‘overweight’ rating, JPMorgan laid out expectations for fiscal stimulus measures at China’s March National People’s Congress meeting.

These should buoy copper demand as inventories sit at a five-year low, analysts said, with Antofagasta offering higher output growth than peers at 30% against 2024 come 2028.

Copper prices were seen rising from around US$4.60 a pound to US$5.20 by the second quarter of 2026 as a result.

“With fewer operational and macro risks in our view over 2025, we see Antofagasta standing out given its leading copper volumes growth.”

Shares were up 2.4% at 1,879.50p on Wednesday to place Antofagasta top among the FTSE 100 risers.

Overall, the index had shed 57 points to sit at 8,709 come the afternoon.

12.44pm: BAE eyeing double-edged sword as talks swirls of defence spending hike

An anticipated increase in European defence spending should well benefit BAE Systems PLC, though challenges loom, analysts have said.

Following results on Wednesday, Shore Capital repeated a ‘hold’ rating and 1,337p share price target, noting results largely matched expectations but that guidance was modest.

BAE had reported a 14% 4% jump in underlying pre-tax earnings to £3.0 billion on a 15% uptick in sales to £28.3 billion for the year to December 31.

According to Shore Cap, sales had come in as anticipated, while profit and an £88 million drop in free cash flow to £2.5 billion slightly beat forecasts.

Guidance for a 7% to 9% increase in sales and 8% to 10% rise in profit through 2025 was dubbed “modest” by analysts though, after talk of hiked defence spending in Europe sent shares across the sector rallying earlier in the week.

“Whilst BAE is a beneficiary of higher defence spending, its size and exposure to long-term contracts, restrict its ability to rapidly grow the topline.”

Speculation hiked defence spending on the continent had been sparked as European leaders held crisis talks in response to US efforts to end the war in Ukraine on Monday.

Shares gained 1.7% to sit at 1,359.19p on Wednesday.

11.53am: S&P 500 to fall from record in negative start on Wall Street

Wall Street was on course for a negative start as Wednesday’s session approached, leaving the S&P 500 set to fall from its closing record.

Futures showed the S&P 500 down 0.1% ahead of the opening bell, after the index had finished out Tuesday’s session at an all-time high of 6,129.

The Nasdaq and Dow Jones were seen dropping 0.1% and 0.2% respectively in the meantime after posting slight gains the day before.

Attention on Wednesday turned to Federal Open Market Committee minutes from its January meeting and any insight on the path of interest rates ahead.

“While traders will undoubtedly pick through the comments with a fine tooth comb, the huge uncertainty faced by the FOMC under a Trump presidency means that they are likely to remain highly data dependent,” Scope Markets analyst Joshua Mahony said.

Having held interest rates in the 4.25% to 4.50% range last month, Mahony added the central bank would likely signal a sit and wait approach as the impact of Trump’s policies emerged.

11.01am: March rate cut hopes dissipate on inflation jump

Already slim expectations of a March interest rate cut by the Bank of England have been dialled back even further after figures on Wednesday showed inflation jumped in January.

Money markets were pricing in less than a 7% chance of a cut next month come Wednesday, against 12.5% a day earlier.

The ONS had reported headline inflation climbed by 3.0% in the year to January earlier in the day, compared to 2.5% in December.

This meant prices had climbed at the fastest pace in ten months and ahead of analysts’ expectations.

Barclays analysts noted the rise left the next cut likely to take place in May after “one-off” factors drove inflation in January but underlying services inflation measures moved sideways.

10.11am: FTSE 100 off lows but airlines and housebuilders weigh

London’s blue chips moved off the day’s lows come late morning but remained below the mark at 8,759 and seven points down.

Glencore PLC continued to lead the fall, dropping 4.7% after news of a drop in profit last year was followed by commentary that it could ditch its primary London listing.

Airlines and housebuilders were also among those weighing on the index.

British Airways owner International Consolidated Airlines SA and easyJet PLC shed 2.0% and 4.2% respectively after peer Jet2 PLC flagged mounting cost pressures in an update.

Barratt Redrow PLC, Persimmon PLC, Taylor Wimpey PLC and Berkeley Group Holdings PLC fell in the meantime after figures showing an uptick in inflation to 3.0% last month.

Both London’s mid and small-caps also dropped, with the FTSE 350 off three points at 4,799 and AIM all-share down two at 721.

Wizz Air Holdings PLC and Jet2 PLC were among the losers, while Trainline PLC was another to drop, falling 8%... Read more

In the small-cap space, Caledonia Mining Corporation PLC ticked up after naming a new chief financial officer… Read more

Helium One Global Ltd also gained on news drilling had begun at the Jackson-31 well, part of the Galactica helium project in Colorado… Read more

9.35am: Glencore mulls departure from London Stock Exchange

Glencore PLC has signalled it is considering ditching the London Stock Exchange in favour of a primary listing elsewhere.

Following results on Wednesday, chief executive Gary Nagle flagged the miner could potentially move overseas in search of a higher valuation.

“Ultimately, what we want to ensure is that our securities are traded on the right exchange where we can get the right and optimal valuation for our stock,” he told journalists.

“There have been questions raised previously around whether London is the right exchange.

“If there’s a better one, and those include the likes of the New York stock exchange, we have to consider that.”

Figures earlier in the day had shown a 16% drop in adjusted earnings to $14.36 billion on weaker commodity prices.

Glencore also unveiled a new US$1 billion buyback, though efforts to win over investors appeared to underwhelm as the stock fell 6.0% to 332.45p.

Were the Anglo-Swiss miner to head elsewhere, it would join a string of big names in ditching the London Stock Exchange in recent years.

8.54am: Inflation surge unlikely to worry BoE - analyst

January’s jump in inflation will unlikely be too much of a worry for the Bank of England after a string of one-off factors fueled price rises, EY ITEM Club analysts have said.

The rise in the consumer price index from 2.5% to 3.0% in the year to January was largely driven by higher services inflation, analysts said, which had been “widely anticipated”.

“It's unlikely the MPC will have seen much in today's release to concern them,” EY added.

Analysts forecast inflation to dip over the coming months before a renewed uptick in April, fuelled by increasing energy prices and passed-on costs from higher employer national insurance and wages.

“We expect the Monetary Policy Committee will continue with its 'cut-hold' approach to loosening policy for now, with the next rate cut likely to come at its May meeting,” EY said.

8.38am: Jet2 tumbles as challenges cloud stronger profit

Jet2 PLC fell over 9% on Wednesday as the airline signalled profit would be higher for the year but flagged growing cost pressures.

Profit before currency movements and tax was expected to sit between £560 million and £570 million in the year to March 31, marking an increase of 8% to 10%.

Pricing for the most recent winter period had remained competitive, the airline said, though its average booked load factor was down 2.2 percentage points.

A string of cost pressures were also highlighted, including due to delayed delivery of new A321neo aircraft ahead of the peak summer period.

Higher costs around hotel accommodation, aircraft maintenance and general airport charges were also flagged, alongside looming national insurance and wage increases.

A mandated increase in the use of sustainable aviation fuel to make up 2% of loads was set to add £20 million to costs too, Jet2 said.

Shares dropped 9.4% to 1,418p.

8.13am: FTSE 100 heads lower early on

London’s blue chips headed lower as Wednesday’s session got underway, with the FTSE 100 dropping three points to sit at 8,763.

Antofagasta PLC led the early risers, climbing 2.5%, while Glencore PLC dropped 3.1% to head the fallers after underwhelming earnings.

Pre-tax earnings slipped 16% to US$14.4 billion last year, the miner reported, as weaker commodity prices hit, while a US$1.0 billion buyback was unveiled... Read more

HSBC Holdings PLC, which also announced a US$2 billion buyback on full-year profit of US$32.3 billion, climbed by 0.6%.

Revenue was flat over the year, HSBC’s figures showed, with chief executive Georges Elhedery flagging plans for around US$300 million of cost reductions in 2025… Read more

Fellow reporter BAE Systems PLC sat just above the mark in the meantime.

7.59am: BAE grows profit as order book hits record

BAE Systems PLC has unveiled stronger profit and said its order book hit a record last year.

Some £33.7 billion worth of orders were penned in the year to December 31, BAE said on Wednesday, leaving its backlog at a record £77.8 billion.

Sales climbed by 14% to £28.3 billion in the meantime, aiding a 14% jump in underlying pre-tax earnings to £3.0 billion.

BAE has benefitted from growing demand on the back of heightened geopolitical tensions with the likes of the Ukraine war in recent years.

Earlier this week, shares surged as crisis talks among European leaders in response to US efforts to end the war prompted speculation of hiked defence spending on the continent.

BAE signalled ongoing strong demand across the board, including for the likes of its munitions, electronic systems, intelligence products as well as within emerging areas.

“Based on the exceptional visibility of our record order backlog and sustainability of our value-compounding business model, we remain confident in the positive momentum of our business into the future,” chief executive Charles Woodburn noted.

A 20.6p per share final dividend was recommended, taking the figure to 33p for 2024 and up 10% on a year earlier.

7.28am: Inflation higher than expected

January's uptick in inflation was faster than analysts had been expecting and meant prices climbed at their quickest pace in 10 months.

ONS figures earlier had shown headline inflation hit 3.0% in January, against 2.5% a month earlier, as the core rate climbed from 3.2% to 3.7%.

Analysts had expected the headline rate to have edged up to 2.7% and core inflation of 3.6%.

ONS chief economist Grant Fitzner flagged the jump meant prices had climbed at their highest since March last year.

“The rise was driven by air fares not falling as much as we usually see at this time of year, partly impacted by the timing of flights over Christmas and New Year,” he said.

“After falling this time last year, the cost of food and non-alcoholic drinks increased, particularly meat, bread and cereals.

“Private school fees were another factor, as new VAT rules meant prices rose nearly 13% this month.”

7.14am: FTSE 100 set for muted start as inflation jumps

London’s blue chips were seen little changed ahead of Wednesday’s trading after figures showed inflation picked up last month.

According to the Office for National Statistics, the consumer price index rose to 3.0% in the year to January, against 2.5% in December.

Core inflation, excluding energy and food prices, ticked up from 3.2% to 3.7% in the meantime.

Futures had the FTSE 100 edging upwards on Wednesday, after the index closed Tuesday’s session just off the mark at 8,766.

Elsewhere, Asian markets were mixed overnight, following a positive session on Wall Street.

5am: What to watch out for on Wednesday

HSBC Holdings PLC shares topped the FTSE 100 on the day before its final results are reported, with an uptick in optimism about its key Chinese market giving a helping hand to the worst-performing of the UK's big five over the past 12 months...read more 

Will final results from BAE Systems make a splash? The shares have been listed 12% over the past week by talk of increased European defence spending, but analysts say the results might be more a case of 'steady as she goes'...read more

Glencore PLC was given an upgrade from Morgan Stanley a day ahead of its results, with analysts arguing that the market has overreacted to concerns about weaker coal prices and potential pressure on its trading business...read more

UK macroeconomic news will also be in focus on Wednesday as it is 'prices day' from the Office for National Statistics, with inflation numbers for December having seen the headline consumer price index slowed to 2.5% from 2.6% previously, but expected to rebound to 2.8% for January.

Core CPI, which slowed from 3.5% to 3.2%, is seen bouncing to 3.7%.   

Wednesday 19 February 

Finals: BAE Systems PLC (LSE:BA.), Conduit Holdings Ltd (LSE:CRE), Glencore PLC (LSE:GLEN), HSBC Holdings PLC (LSE:HSBA), Morgan Sindall Group PLC (LSE:MGNS), Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF)

US earnings: Analog Devices Inc (NASDAQ:ADI), Carvana Co. (NYSE:CVNA), Manulife Financial (TSX:MFC), Garmin Ltd (NYSE:GRMN) 

AGMs: JPMorgan Asia Growth and Income 

Economic news: Consumer Price Index (UK), Producer Price Index (UK), Retail Price Index (UK), FOMC Minutes (US), MBA Mortgage Applics (US), Building Permits (US), Housing Starts (US), Oil Inventories (US)