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U.K. shares are hovering around the flatline Tuesday as investors digest the latest corporate earnings reports and look forward to monetary policy updates from the Federal Reserve and the European Central Bank for further direction. The utilities sector notably boosted the benchmark index by surging 2.2%. While the pound declined after a three-session climb, benefiting British equities, investor confidence waned on Monday due to the emergence of a cost-effective Chinese artificial intelligence model. This development raised uncertainties about the dominance of AI frontrunners and their suppliers that previously propelled the stock prices of technology and semiconductor firms. A significant amount of focus is directed at the earnings reports of four out of the seven major companies set to be released later this week. The Federal Reserve's initial interest-rate decision of the year, anticipated to maintain its lending rate, is also in the spotlight on Wednesday. Furthermore, the December figures for personal consumption expenditures are due on Friday.

Single Stock Stories:

• Rentokil Initial, the pest control company, is leading the FTSE 100 as its shares have surged by 3.8% to 401.6 pence. This positions it as the top gainer on the FTSE 100 index, which is showing a marginal increase of 0.02%. Rentokil Initial reported strong 3% organic revenue growth in the fourth quarter, with accelerated growth in North America. The company announced the departure of North America boss Brad Paulsen, who will be temporarily succeeded by Alain Moffroid from within the organisation. Despite these developments, the stock had faced a 7.3% decline in 2024.

• British engineering firm Smiths Group is facing a setback as its shares are down 1.3% at 1,859p, placing it at the bottom of the FTSE 100 index. The company disclosed that it is handling a cyber security incident involving unauthorised access to its systems. Despite this development, Smiths Group had experienced a notable 14% increase in its stock value over the past 12 months.

• Computacenter Plc's shares have seen a significant uptick, rising by up to 4.9% to 2,216p and positioning the stock among the top percentage gainers on the FTSE 250 index, which has experienced a 0.9% increase. The technology and services provider reported that the second half of the fiscal year 2024 was its most profitable half-year in history, culminating in a record number of customers generating over 1 million pounds ($1.25 million) of gross profit per annum. Computacenter anticipates strong growth prospects in the North American market, with solid performances noted in the Germany and North America markets throughout the fiscal year 2024. The company expects the adjusted profit before tax for fiscal year 2024 to align with the lower end of analysts' forecast range of £253.6 million to £266.5 million. Notably, despite these positive developments, the stock had recorded a 24% decline in 2024.

• SSP Group's shares have surged by as much as 6.5% to 182.6p, making it the leading percentage gainer on the FTSE 250 index, which has risen by 0.4%. The company, known for operating food outlets at airports and train stations worldwide, posted a notable 14% increase in sales for the first quarter, buoyed by robust travel demand. SSP Group has decided to maintain its forecast for the fiscal year 2025 unchanged. Sales in its Asia-Pacific and Eastern Europe-Middle East markets experienced significant 41% growth, attributed to strong passenger volumes and strategic acquisitions. Despite these positive developments, the stock had seen a dip of around 23% in 2024.

Broker Updates:

• British retailer Halfords, specialising in bicycle and car products, has seen a remarkable surge of 20% to 152p. The company, denoted as HFD, anticipates exceeding annual profit expectations above analysts' projections as the positive sales momentum in its stores extends into the holiday quarter. Halfords forecasts an underlying pre-tax profit range of £32 million to £37 million ($39.8 million-$46 million) for fiscal 2025, surpassing the average analyst forecast of £28.3 million, as per a company-compiled consensus. Analysts at Peel Hunt express confidence, stating, "There are still some headwinds, but management has the business correctly configured to take advantage of better trading conditions." Despite a decline of approximately 34% in 2024, Halfords is positioned for a strong performance based on its current outlook and market momentum.

Technical & Trade View

FTSE Bias: Bullish Above Bearish below 8400

• Primary support 8400
• Below 8400 opens 8225
• Primary objective 8600
• Daily VWAP Bearish
• Weekly VWAP Bullish

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