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“Markets got off to a cautious start on the first trading day of 2024, perhaps setting the tone for what could be a volatile year jam packed with political jostling ahead of crunch elections,” says Russ Mould, Investment Director at AJ Bell.
“While the main European indices pushed ahead, Asian markets were in the red despite better-than-expected economic data from China. The Caixin Manufacturing PMI data grew to 50.8 in December 2023 versus 50.7 in November. Analysts had expected the December figure to be 50.4.
“China is a tricky one for investors. A year ago, money piled into Chinese equities with the hope of companies benefiting from looser Covid restrictions and a reopening of the economy, yet the results were disappointing. Sentiment has waned and investors in general are reluctant to take advantage of share price weakness in the country and load up on Chinese stocks.
“The FTSE 100 moved 0.2% higher, led by a mixture of retail and natural resources stocks. B&M and Marks & Spencer were the market’s top two risers, suggesting investors were parking their money with companies making strategic progress. B&M is one of the few Covid winners not to have suffered a major slump in demand as the pandemic faded away, while Marks & Spencer has finally found the right ingredients to drive its turnaround efforts.
“Aldi and Lidl reported record Christmas sales. While neither of these discount grocery companies has its shares listed on a stock market, the festive sales news has a direct read-across to peers that do have publicly traded stock. This included Tesco which advanced 0.8% versus a mere 0.2% gain from Sainsbury’s – the share price reaction being the market’s way of saying which one it thinks will have had a better Christmas at the tills.
“Oil prices were on the move again as Brent Crude advanced 1.5% to $78.19 per barrel, giving a lift to shares in BP and Shell on the London market. Tensions in the Red Sea, one of the world’s most important shipping routes, have pushed up the price of oil on fears about supply disruptions.
“FTSE 250 member PureTech Health extended its pre-Christmas rally, rising a further 4% after benefiting from the $14 billion sale of US-listed biotech firm Karuna Therapeutics to Bristol Myers Squibb, announced on 22 December 2023. PureTech owns 892,852 shares in Karuna and will receive royalties on its KarXT drug upon commercialisation.”
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