The FTSE 100 slipped on Tuesday as Asian-focused banks and housebuilders weighed on the index following soft UK house price data and concerns about US-China trade relations.

“Asia-focused financials were lower after the Hang Seng index dropped sharply. The sell-off was linked to news the US is putting several Chinese firms in its crosshairs including Tencent,” said AJ Bell investment director Russ Mould.

There was also a sense of caution ahead of key economic data that has the potential to set the tone for central bank action in early 2025.

The move lower in London came despite a strong session for US indices that look set to leave the FTSE 100 in the dust in terms of performance again in 2025. Chipmaker shares, including Nvidia Micron Technology and Super Micro, led the market higher on the news Microsoft planned to spend big on AI in 2025.

“After a sluggish December, US stocks have kicked off the year in style, with tech and semiconductors stealing the spotlight, buoyed by Nvidia buzz, chatter about Microsoft’s $80bn capex plans, and tariff optimism despite mixed signals from Trump,’ said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“Nvidia climbed higher on the assumption that a significant portion of Microsoft’s increased infrastructure spending will flow its way, while CEO Jensen Huang delivered a keynote speech at the Consumer Electronics Show, unveiling new gaming cards, autonomous vehicle partnerships, and more. AMD joined the rally with a new chip deal with Dell, while broader markets wrestled with déjà vu over China trade relations and investors remained laser-focused on AI capex and deregulation in the banking sector.”

in the UK, Next was firmly higher after increasing guidance for the year on the back of a very positive festive trading period update.

“As if a billion-pound profit for the year wasn’t enough, Next has gone and nudged the dial again, increasing full year profit outlook for the fourth time in the space of half a year,” said Adam Vettese, market analyst at investment platform eToro.

‘Sales were up 6% for the period leading up to and just after Christmas, significantly higher than the projected 3.5% increase, which has been the same story throughout the year much to the delight of investors.”

“Next is often used as a barometer of the UK retail sector and so far so good with many others due to report this week.”

JD Sports was again among the risers as it rallied in sympathy with Next’s encouraging results. JD Sports shares were ravaged by a series of profit warnings towards the end of last year, which set the stock up for a strong start to 2025. 

Banks were a significant drag on London’s markets, with HSBC, NatWest, and Standard Chartered down around 1%-2% due to China concerns.

Taylor Wimpey was the top faller after Halifax said UK house prices fell for the first time since March.

Next shares rose on Tuesday after reporting stronger-than-expected Christmas trading, with full-price sales rising 6.0% in the nine weeks to December 28th, prompting the bellwether retailer to raise its profit guidance for the year.

The British retail giant revealed that its performance was particularly driven by robust online growth, especially from its international operations. Online sales overseas surged by 31.4% during the festive period, while the company’s UK online business, comprising both Next’s own brand and third-party Label brands, grew by 6.1%.

“Next has enjoyed a strong Christmas with its online business seeing an acceleration in sales growth in the fourth quarter, both in the UK and overseas. The year ahead is forecast to be more challenging, but Next still expects to grow sales and profit. It is a classic example of a strong business getting stronger,” said Charlie Huggins, fund manager at Wealth Club.

“Next has pulled another rabbit out of the hat this Christmas, beating its sales forecasts once again. More important for investors is the guidance for the coming year.”

However, the picture was less rosy for Next’s physical stores, where sales declined by 2.1% during the Christmas trading period. This contrast highlights the continuing shift in consumer shopping habits towards digital channels, a trend that has been consistent throughout the year.

The strong overall performance has led Next to increase its profit forecast for the year ending January 2025. The retailer now expects full-year profit before tax to reach £1,010 million, up £5 million from its previous guidance. This would represent a 10.0% increase compared to the previous year.

Next also noted that its end-of-season sale stock was up 13% compared to last year, though the company stated this represents a return to more normal levels after particularly low surplus stock in the previous year. The retailer confirmed that clearance rates are meeting expectations.

Looking ahead to the next financial year, Next has adopted a more cautious stance, forecasting sales growth of 3.5%. The company cited concerns about the impact of employer tax increases on the broader economy, particularly their potential effects on prices and employment levels.

“Calendar year 2025 is likely to be a bloodbath for the UK retail sector,” Huggins said.

“The Autumn Budget means retailers will face a significant increase in employee costs and many will not be able to offset this. Next stands apart for its ability to do so, with its high margins, strong overseas growth and efficiency initiatives all helping it to preserve profitability.”

Although the FTSE 100’s losses were marginal, there was a clear disparity between the performance of London’s flagship index and the broader European equity space on Monday as a raft of broker downgrades weighed on the index.

The FTSE 100 was trading up 0.1% at the time of writing, while the EuroStoxx 50 index gained 0.8%.

“The FTSE 100 started the week on the back foot, dragged down by consumer non-cyclicals, basic materials and industrials,” said Russ Mould, investment director at AJ Bell.

“Share price weakness in big brand companies including Unilever, Reckitt and Haleon is often a signal that investors are worried about consumer spending and growing inflationary pressures. Renewed cost pressures may prompt companies to hike prices and this could see shoppers switch to cheaper supermarket own-brand items. It’s a major risk for investors in big brand stocks to consider.

“Driving down the shares in the sector this time was negative broker comment as RBC downgraded Unilever to ‘underperform’, which hurt the Marmite maker and took its big brand peers down at the same time.”

News that Aldi had a bumper festive trading period led by its own brand products added to the pessimism around retailers, with Marks & Spencer and Tesco falling on Monday.

Rolls Royce was the biggest loser after a broker downgrade served as a reality check for the engine maker as a multi-year rally.

The company’s rally since the beginning of 2023 has been nothing short of spectacular, but the meteoric rise leaves the stock vulnerable to any suggestion of negativity. The stock fell 3% in early trading as investors booked profits.

“Stock market darling Rolls-Royce saw its engines splutter after Citigroup downgraded its rating on the stock to ‘neutral’ from ‘buy’ on valuation grounds. Even though Citigroup raised its price target for the stock, investors appear to have taken the rating downgrade as a signal to lock in some profit,” Russ Mould said.

“Rolls-Royce has been a runaway success for investors in recent years as its recovery story gained traction. The turnaround opportunity is now looking like old news and investors increasingly want to hear about the next phase of the company’s growth, not simply what it is doing to get back on track as that looks to have already happened.” 

JD Sports, one of the UK Investor Magazine’s Top 20 Stocks Picks for 2025, was 2.1% higher, helping offset losses elsewhere. Intermediate Capital was the top gainer, rising 2.8%, bouncing off technical support around 2,000p.

Genflow Biosciences, the biotechnology company focused on developing therapies to promote longevity, has released a round-up for 2024 detailing advancement in its research programmes throughout the year and ambitious plans for the year ahead.

The company’s work on the SIRT6 gene, central to its anti-ageing research, has progressed significantly, bolstered by collaborations with leading researchers and vital support from the Belgian Government. A key development has been the partnership with Exothera SA for GMP manufacturing of their MASH (GF-1002) treatment, positioning the company to begin its first proof-of-concept study.

In their Werner Syndrome programme (GF-1003), Genflow has successfully developed a proprietary liver organoid using human cells from patients with the condition, representing a significant step forward in personalised disease modelling. This approach offers more accurate insights than traditional animal testing methods.

The company’s veterinary research has also advanced, with plans underway for a six-month life extension clinical trial for ageing dogs, conducted in partnership with Syngene. Investors are awaiting results from this study, which are expected by the end of 2025, potentially opening doors for partnerships with veterinary pharmaceutical companies.

Progress continues in their sarcopenia research (GF-1005), where collaboration with the Université libre de Bruxelles is focusing on addressing mitochondrial dysfunction through innovative cell-loading techniques.

Looking ahead to 2025, Genflow aims to build upon these achievements, with the company’s focus remaining on ‘tackling ageing’.