Business
Stocks rally as Trump calms Greenland rhetoric
The FTSE 100 shrugged off a weak start to close slightly higher on Wednesday after US president Donald Trump said he would not use force to take control of Greenland, but insisted America must still have “ownership” of it.
Kathleen Brooks, research director at XTB, said Mr Trump’s speech at Davos, in Switzerland, had two key takeaways for markets.
“Firstly, Trump will not take Greenland by force and second, Trump wants the economy to run hot to send US stocks flying north,” she said.
The FTSE 100 index closed up 11.31 points, 0.1%, at 10,138.09.
The FTSE 250 ended 113.42 points higher, 0.5%, at 23,071.29, and the AIM All-Share closed up 7.45 points, 0.9%, at 808.59.
In a wide-ranging, often rambling speech at the World Economic Forum, Mr Trump said: “We probably won’t get anything unless I decide to use excessive strength and force where we would be, frankly, unstoppable, but I won’t do that.”
But he demanded “immediate” talks on Washington’s acquisition of Greenland, renewing his push to seize control of the autonomous territory from Nato ally Denmark.
“It’s the US alone that can protect this giant mass of land, this giant piece of ice, develop it and improve it,” Mr Trump told world leaders.
“That’s the reason I’m seeking immediate negotiations to once again discuss the acquisition of Greenland by the US.”
Prime Minister Sir Keir Starmer earlier told Parliament he would not give in to pressure from Mr Trump over the future of Greenland.
“I will not yield, Britain will not yield on our principles and values about the future of Greenland under threats of tariffs, and that is my clear position,” he told MPs, adding that he would host Danish counterpart Mette Frederiksen in London on Thursday.
Mr Trump has threatened to slap tariffs on Britain and other European countries for opposing his claims on Greenland.
“Greenland could still be an issue for financial markets, since Trump has said that he wants to gain control of Greenland and will start immediate negotiations to do so. However, today’s speech suggests that Nato is not under immediate threat, for now,” Ms Brooks said.
In European equities on Wednesday, markets were mixed. The CAC 40 in Paris closed up 0.1%, while the DAX 40 in Frankfurt ended 0.6% lower.
In New York, financial markets were higher at the time of the London equity market close.
The Dow Jones Industrial Average was up 0.9%, as was the S&P 500, while the Nasdaq Composite climbed 1.0%.
Bond markets were calmer after Tuesday’s sharp moves. The yield on the US 10-year Treasury was quoted at 4.27%, trimmed from 4.28% on Tuesday. The yield on the US 30-year Treasury was quoted at 4.89%, narrowed from 4.91%.
Back in London, analysts played down a surprise spike in UK inflation, calling it a “blip”.
“It was always likely that the December figures would post a rebound on account of the rise in tobacco duty rates showing up in the December data rather than November (as it did in 2024) due to the later timing of last year’s budget,” analysts at Lloyds Bank said.
“Some unwinding of the ‘early’ Black Friday discounting seen in the November data also looks to have been behind the upward move, as well as base effects associated with a sharp rise in airfares last month relative to a more subdued increase in December 2024,” the bank added.
Headline consumer prices index (CPI) inflation accelerated in December, with CPI rising by 3.4% year-on-year, up from 3.2% in November, according to data published on Wednesday by the Office for National Statistics (ONS). It was ahead of the FXStreet-cited consensus of 3.3%.
It was the first time headline inflation has risen since July, when the annual rate rose to 3.8% from 3.6% in June. Figures for October at 3.6% and November at 3.2% were lower than the consensus forecast at the time.
The ONS said alcohol, tobacco and transport made the largest upward contributions to the monthly change.
Core CPI, which excludes energy, food, alcohol and tobacco, was unchanged at 3.2%, better than the 3.3% consensus.
The CPI goods annual rate rose to 2.2% from 2.1%, while the CPI services annual rate rose to 4.5% from 4.4%, but below the 4.6% consensus.
RBC Capital Markets expects the December “blip” to fall away sharply in the first half of 2026.
“Not only therefore did the December outturn leave services and headline CPI inflation broadly in line with the BoE’s (Bank of England’s) projections from November but also the main upward contributions to both headline and CPI were concentrated in non-core or more volatile categories,” the broker said.
Deutsche Bank expects inflation will take a big step down in January, pushing to near 3% year-on-year.
And by spring, the bank expects the BoE’s 2% inflation target “to be in sight”.
The pound was quoted lower at 1.3437 US dollars at the time of the London equities close on Wednesday, compared to 1.3462 dollars on Tuesday.
The euro stood at 1.1707 dollars, lower against 1.1733 dollars. Against the yen, the dollar was trading at 158.18 yen, higher from 157.95 yen.
On the FTSE 100, trading statements boosted Burberry but weighed on Experian.
Luxury goods manufacturer Burberry rose 5.0% after announcing an increase in comparable store sales over the festive period, while it expects its annual adjusted operating profit to be in line with analyst consensus estimates.
Comparable sales by region in the third quarter of financial year 2026, which runs until March 28, were up 6% in Greater China and 5% higher in Asia Pacific. They were up 2% in the Americas. Further, comparable sales were flat in Europe, Middle East, India & Africa due to declines in tourist spend.
Miners were in demand with Rio Tinto, up 5.2% after a well-received fourth quarter production update, and Glencore, which Rio is trying to buy, up 3.7%.
Bank of America said it believes “GlenTinto” – should a deal be sealed – offers “compelling value”.
Rio has until February to firm up an approach for Glencore.
Heading south, insurer Admiral, down 4.2%, after Goldman Sachs downgraded to “sell” from “buy”, while Experian slipped 4.9% despite reporting in-line trading.
On the FTSE 250, Currys shares sparked 7.7% higher as the electricals retailer rose profit guidance, while Premier Foods climbed 7.1% after it signalled top-end full-year profits.
But pub chain JD Wetherspoon failed to cheer investors, with shares down 8.1%, as it said higher costs were offsetting growth in sales.
Brent oil traded lower at 64.82 dollars a barrel on Wednesday, down from 64.89 dollars late on Tuesday.
Gold was quoted at 4,833.66 dollars an ounce on Wednesday, after hitting another record high, up from 4,742.56 dollars on Tuesday.
The biggest risers on the FTSE 100 were Rio Tinto, up 327.00 pence at 6,641.00p, Burberry, up 61.00p at 1,280.00p, Bunzl, up 97.00p at 2,086.00p, Anglo American, up 158.00p at 3,401.00p, and JD Sports Fashion, up 3.78p at 82.06p.
The biggest fallers on the FTSE 100 were Experian, down 157.00p at 3,070.00p, Admiral Group, down 128.00p at 2,948.00p, London Stock Exchange, down 198.00p at 8,782.00p, Rolls Royce, down 26.00p at 1,255.00p and Sage Group, down 16.50p at 1,025.00p.
Thursday’s global economic calendar has public sector net borrowing figures, plus GDP data, initial jobless claims and personal consumption expenditures data.
Thursday’s UK corporate calendar has trading statements from discount retail chain B&M European Value Retail and trading platform AJ Bell.
Contributed by Alliance News
The FTSE 100 closed higher on Monday, recouping most of Friday’s hefty falls amid a calmer bond market and as Iran responded to the latest US peace proposal.
The FTSE 100 closed up 128.38 points, 1.3%, at 10,323.75. The FTSE 250 ended up 15.56 points, 0.1%, at 22,611.70, but the AIM All-Share fell 8.72 points, 1.1%, at 800.17.
Iran said it had responded to a new US proposal aimed at ending the war, adding that diplomatic exchanges continue despite Iranian media reports describing Washington’s demands as excessive, AFP reported.
Washington and Tehran have been swapping proposals in an effort to end the conflict, which the US and Israel launched on February 28, but they have held only a single round of talks despite a fragile ceasefire.
“As we announced yesterday, our concerns were conveyed to the American side,” foreign ministry spokesman Esmaeil Baqaei told a news briefing, adding that exchanges were “continuing through the Pakistani mediator”.
Mr Baqaei defended Iran’s demands, including the release of Iranian assets frozen abroad and the lifting of long-standing sanctions.
“The points raised are Iranian demands that have been firmly defended by the Iranian negotiating team in every round of negotiations,” he said.
But with no signs of clear progress, the oil price remained inflated and volatile.
Brent crude for July delivery was trading at 110.80 dollars a barrel on Monday, up compared to 108.83 at the time of the equities close in London on Friday.
After a frantic Friday, the bond markets calmed, while sterling also rebounded as investors weighed the latest political developments.
The yield on UK 10-year gilts traded at 5.14% compared to 5.17% at the same time on Friday.
The pound traded at 1.3397 dollars on Monday afternoon, up from 1.3319 on Friday. Against the euro, sterling firmed to 1.1506 euros from 1.1462 on Friday.
Prime Minister Sir Keir Starmer insisted he would not set out a timetable to leave No 10 as potential leadership challenger Andy Burnham vowed to “change Labour” if he is successful in his effort to return to Parliament.
The Prime Minister said he still wants to lead Labour into the next general election amid calls from within the party to set out a timetable for his exit.
Greater Manchester Mayor Mr Burnham hopes to be Labour’s candidate in the Makerfield by-election, which could provide him with a route back to the Commons to challenge for the party leadership and the keys to Downing Street.
Speaking to broadcasters in London, Sir Keir said he was not going to set out a timetable to stand down if Mr Burnham returns to Westminster.
He added: “I do want to fight the next election. Obviously, I recognise that after the local election results, the elections in Wales and Scotland as well, that the first task is obviously turning things around and making sure that my focus is in the right place.”
Meanwhile, the International Monetary Fund said growth in the UK economy will be stronger this year than previously thought.
The IMF updated its growth projections a month after warning of a sharp slowdown caused by the global energy shock from the US-Iran war.
The influential financial body said it was now predicting UK gross domestic product to rise by 1% in 2026, higher than the 0.8% growth it was forecasting last month.
Responding to the latest report, Chancellor Rachel Reeves said: “The IMF upgrading its growth forecasts and backing our fiscal strategy is yet more proof that this Government has the right economic plan.”
In Europe, equity markets on Monday, the Cac 40 in Paris ended up 0.4%, and the Dax 40 in Frankfurt advanced 1.5%.
In New York, the Dow Jones Industrial Average was down 0.1%, the S&P 500 fell 0.4%, and the Nasdaq Composite was 0.7% lower.
On the FTSE 100, Whitbread closed up 2.3% after Corvex Management urged the Premier Inn owner to put itself up for sale, slamming its recently announced new five-year strategic plan.
In a damning letter to Whitbread management, the New York-based activist hedge fund called the status quo “untenable” and said that the need to pursue “meaningful strategic and structural reform had become unignorable”.
As a result, Corvex, which holds a stake of around 7% in Whitbread, said the only “credible” path to unlocking value at Whitbread is a sale of the company.
Anglo America fell 1.4% as it struck a deal to sell its portfolio of steelmaking coal mines in Australia to Dhilmar for up to 3.88 billion dollars in cash.
The London-based mining house said Dhilmar will pay the FTSE 100-listing 2.3 billion dollars upfront, and the deal has a price-linked earnout of up to 1.58 billion dollars.
Anglo American chief executive officer Duncan Wanblad said: “This agreement represents another major step in the simplification of our portfolio ahead of completing our merger with Teck. Through this transaction, we will complete our exit from steelmaking coal.”
Susannah Streeter, chief investment strategist at Wealth Club, said: “This not only strengthens the balance sheet, ahead of its planned merger with Canada’s Teck Resources, but also keeps it exposed to future strength in coal prices.”
Capita shares rose 8.9% as the London-based outsourcing and business services company said adjusted revenue rose 2.9% on-year in the first four months of 2026, which it said was in line with expectations.
Looking ahead, Capita said it continues to expect a low to mid-single digit revenue climb in Capita Public Service and expects mid-teen revenue growth in its Pension Solutions business.
The biggest risers on the FTSE 100 were Centrica, up 7.70p at 196.95p, National Grid, up 43.50p at 1,231.50p, Pearson, up 37.00p at 1,136.50p, Relx, up 81.00p at 2,504.00p, and SSE, up 74.00p at 2,345.00p.
The biggest fallers on the FTSE 100 were 3i Group, down 128.00p at 2,082.00p, Airtel Africa, down 15.60p at 312.80p, Mondi, down 16.40p at 734.60p, Polar Capital Technology Trust, down 12.50p at 659.00p and Diploma, down 95.00p at 6,625.00p.
Tuesday’s global economic calendar has UK consumer and wholesale inflation figures, eurozone inflation data and the minutes of the last Federal Open Market Committee meeting.
Tuesday’s local corporate calendar has full-year results from business services group DCC, half-year numbers from supplier of specialised technical products and services, Doploma, and electricals retailer Currys.
Lloyds Banking Group is considering phasing out its Halifax brand, a move that could bring an end to the 173-year-old institution.
The Sun reports that bosses are expected to announce the end of Halifax as a standalone brand this summer.
It is understood that no definitive decisions have yet been made about the brand, which granted its first mortgage in 1853.
Should Halifax be phased out, account numbers would remain unchanged, and customers’ automatic protection under the Financial Services Compensation Scheme (FSCS) would be unaffected.
“We regularly look at the role our brands play in supporting our customers,” a spokesperson for Lloyds said.
“Our banking customers can already use any Lloyds, Halifax or Bank of Scotland branch, and see any of their products and services in any of their apps – there are no changes for our customers today.”
The Sun, citing industry insiders, reported that any transition would begin on 1 July when people will no longer be able to open new Halifax accounts online or through the app.
By October, Halifax will stop taking on new customers entirely and existing account holders will be gradually migrated to Lloyds Bank, the reports say.
Lloyds declined to comment on the potential timings for any plans.
Britain’s biggest mortgage lender made changes in 2025 that meant its three brands, Lloyds, Halifax and Bank of Scotland, could share branches and mobile banking services.
The shake-up meant some customers could access a branch that is closer to their home because they will be able to access face-to-face banking regardless of the brand.
However, the banking giant has also shut hundreds of high street branches over recent years.
It started another round of closures this month, which will see 95 branches shuttered across the three brands by March 2027.
The closures will leave the group with 610 branches in total, of which 306 are Lloyds, 238 Halifax and 66 Bank of Scotland.
Lloyds has said that all employees currently working at the affected branches will be offered alternative roles within the business or at other locations.
Halifax and Lloyds operate in the same market in England and Wales, while Bank of Scotland is the group’s only brand in the country.
The Reserve Bank of India (RBI) on Monday decided against activating the countercyclical capital buffer (CCyB), indicating that current financial and credit conditions do not warrant an additional capital requirement for banks, PTI reported.The central bank said the decision followed a review and empirical assessment of indicators used under the CCyB framework.“Based on review and empirical analysis of CCyB indicators, it has been decided that it is not necessary to activate CCyB at this point in time,” RBI said in a statement.Under the RBI (Commercial Banks – Prudential Norms on Capital Adequacy) Directions, 2025, the CCyB framework is activated when financial conditions indicate rising systemic risks linked to excessive credit growth.The framework primarily relies on the credit-to-GDP gap as a key indicator, along with supplementary metrics.According to the RBI, the CCyB mechanism is intended to serve two broad objectives.Firstly, it requires a bank to build up a buffer of capital in good times, which may be used to maintain the flow of credit to the real sector in difficult times.Secondly, it achieves the broader macro-prudential goal of restricting the banking sector from indiscriminate lending in the periods of excess credit growth that have often been associated with the building up of system-wide risk.The framework was introduced globally after the 2008 financial crisis as part of measures proposed by the Group of Central Bank Governors and Heads of Supervision (GHOS) under the Basel framework to strengthen financial system resilience.
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