FTSE 100 hits new record as Next and GSK lead rally

​​​Next surges on profit upgrade

​Next shares jumped more than 7% after the retailer raised its full-year pre-tax profit forecast to £1.14 billion. The upgrade follows 10.5% sales growth in the third quarter (Q3), demonstrating the group's ability to navigate challenging consumer conditions.

​The move higher confirms Next's reputation as the UK retail sector's standout performer. A double-digit rise in full-price sales shows the group's mix of disciplined inventory control and digital marketing continues to pay off.

​Overseas growth was particularly striking, with online sales up nearly 40%. This suggests Next's platform strategy has real international traction beyond its mature UK home market.

​The only caution is a softening UK trend as the domestic consumer cools. But even this looks well managed given Next's track record of navigating downturns whilst maintaining margins.

​GSK lifts guidance on drug sales

GlaxoSmithKline (GSK) shares rose after the drugmaker lifted its 2025 earnings forecast. Double-digit growth in oncology, HIV and respiratory drugs drove the upgrade, highlighting the strength of the group's portfolio.

​The pharmaceutical giant has been reshaping its business in recent years. The focus on specialist medicines rather than consumer healthcare appears to be delivering results, with the drug pipeline generating meaningful revenue growth.

​Investor sentiment towards GSK has improved markedly. After years of underperformance, the shares have found support as the market recognises the progress made in streamlining operations and commercialising new treatments.

​Healthcare stocks remain attractive for investors seeking defensive exposure. Companies like GSK offer relatively stable earnings that aren't highly sensitive to economic cycles.

​Glencore rallies on production update

Glencore shares climbed 6% as the miner maintained full-year targets and said marketing profits would hit the midpoint of its guidance range. The update reassured investors worried about operational challenges.

​The mining and trading giant has faced headwinds from weaker commodity prices. However, its diversified business model helps smooth returns across different market conditions.

​Marketing profits remain a key differentiator for Glencore. The trading division's ability to capitalise on market dislocations provides earnings stability that pure miners lack.

​Production targets were maintained despite operational challenges at some sites. This discipline in managing expectations has helped rebuild credibility with investors after previous disappointments.

​Copper miners surge on record prices

​Antofagasta, Anglo American and Rio Tinto gained as copper prices hit record highs. Trade optimism and tight global supply drove the red metal to fresh peaks, supporting mining stocks.

​The rally in copper reflects growing confidence about demand from China. Recent stimulus measures and improved economic data suggest Chinese industrial activity may be stabilising after months of weakness.

​Supply constraints are also supporting prices. New mine development has struggled to keep pace with demand from electrification and renewable energy infrastructure, creating a structural deficit.

​Commodity trading opportunities exist across the metals complex. Copper's role in the energy transition makes it particularly sensitive to policy developments and infrastructure spending plans.

​Aston Martin warns on profits

Aston Martin shares fell after the carmaker warned profit would be at the lower end of its range. Tariffs and weak Chinese demand forced the company to cut spending plans.

​The luxury carmaker continues to struggle with execution. Despite several restructuring attempts, the business hasn't achieved the stability investors hoped for when it listed in 2018.

​Chinese weakness represents a particular challenge. The world's largest luxury car market has slowed sharply, leaving premium manufacturers exposed to reduced demand from wealthy buyers.

​Tariff concerns add another layer of uncertainty. Trade tensions create planning difficulties for manufacturers with global supply chains and could force costly operational changes.

​Pound hits multi-month low

​Sterling hit its lowest level since May 2023 against the euro as investors priced in deeper Bank of England (BoE) rate cuts. The move reflects growing expectations that UK monetary policy will need to ease more aggressively.

​Economic data has disappointed in recent months. Weaker growth and signs of labour market softening suggest the BoE has room to cut rates further without reigniting inflation.

​Forex markets are pricing in a divergence between UK and eurozone monetary policy. This gap in rate expectations drives currency moves as traders position for relative interest rate changes.

​The weak pound has mixed implications for UK companies. Exporters benefit from improved competitiveness, whilst importers face higher input costs that squeeze margins.

​Gilts rise on easing expectations

​UK government bond yields fell across the curve as traders anticipated more monetary easing next year. The move in gilts reflects growing confidence that inflation is under control and the BoE can focus on supporting growth.

​Two-year yields are particularly sensitive to near-term rate expectations. The decline suggests markets see cuts coming sooner and potentially deeper than previously thought.

​Longer-dated bonds also rallied, indicating investors expect a sustained period of lower rates. This shift in the yield curve signals changing perceptions about the UK's economic trajectory.

​Bond market moves influence other assets. Lower yields make equities relatively more attractive and reduce borrowing costs for companies and consumers.

​AI optimism fuels global markets

​Wall Street closed at record highs, with Nvidia and Microsoft leading gains ahead of big tech earnings and the Federal Reserve (Fed) decision. The rally reflects continued confidence in artificial intelligence (AI) as a driver of corporate profits.

​Tech stocks have dominated market performance this year. The so-called "Magnificent Seven" technology giants continue to justify elevated valuations through strong earnings growth and expanding margins.

​Nvidia remains the poster child for AI investment. The chip designer's products underpin much of the infrastructure powering AI applications, creating massive demand for its hardware.

​Microsoft's integration of AI across its product suite demonstrates how established tech companies are monetising the technology. Cloud services and productivity tools enhanced by AI are driving meaningful revenue growth.

​Commodities show mixed picture

​Oil eased on speculation of an OPEC+ output rise. The cartel's willingness to increase production suggests concerns about demand weakness outweigh fears of oversupply in current market conditions.

​Oil trading remains volatile as geopolitical and supply factors compete for influence. Any shift in OPEC+ policy can create sharp price moves that generate trading opportunities.

​Gold steadied just below $4,000.00 an ounce as investors awaited key central bank signals. The precious metal has retreated from recent highs but remains well supported by structural demand from central banks.

​Gold's near-term direction depends heavily on interest rate expectations. Lower rates reduce the opportunity cost of holding non-yielding assets like gold, whilst higher rates create headwinds.

​Market outlook remains constructive

​The divergence between UK and international markets continues. Whilst London benefits from individual stock strength, broader European weakness and currency moves create a complex picture for investors.

​Domestic-focused UK companies face challenges from slowing consumer spending. However, internationally exposed stocks with US dollar earnings benefit from sterling weakness, creating opportunities for selective positioning.

​Corporate earnings remain the key driver. Strong updates from Next and GSK demonstrate that well-managed companies can still deliver growth despite economic headwinds.