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The UK's FTSE 100 rose on Friday, starting December on a positive note. Shares in industrial metal miners led the early gains, buoyed by higher metal prices and positive data from China. The FTSE 100 is an index that includes the 100 largest companies listed on the London Stock Exchange, and its performance is often influenced by various factors, including commodity prices, economic data, and global market trends. In this case, the early lead in industrial metal miners suggests that positive developments in the metal markets, possibly driven by increased demand or other factors, contributed to the FTSE 100's rise. Additionally, upbeat economic data from China, a major consumer of industrial metals, could have boosted investor confidence and had a positive impact on commodity-related stocks, this saw the FTSE gain 0 .85%.

On the negative side of the ledger J.P. Morgan has expressed a bearish outlook for the European food retail sector in 2024/25. The investment bank anticipates that disinflation will continue to impact the sales and margins of the sector during this period. J.P. Morgan notes that there has been no structural improvement in food retail from 2020 to 2023, and some companies in the sector may now be over earning. As part of its cautious stance on the sector, J.P. Morgan downgraded Tesco from "neutral" to "underweight." This contributes to a total of six sector stocks rated as "underweight," with only Colruyt receiving an "overweight" rating. The rationale behind the bearish outlook includes the belief that U.S. grocers have missed expectations, and food producer prices entering "negative territory" emphasise deflationary risks. J.P. Morgan acknowledges that the sector has outperformed in relative terms but suggests it still looks far from cheap. Regarding specific companies, J.P. Morgan deems Metro's revenue growth and outlook as disappointing, justifying a price target with a 16% downside potential. The downgrade of Tesco is based on the expectation that the company may struggle to sustain its previous outperformance, which was linked to temporary executed self-help measures and macro tailwinds.

On the positive side of the ledger, Anglo American and Antofagasta experienced a rally on Friday following an upgrade to a "buy" rating by UBS. Anglo American shares surged by 7%, with UBS changing its rating from "neutral" to "buy" while maintaining the price target. The analysts at UBS believe that the risk/reward profile for Anglo American is now attractive, citing potential benefits from improving copper prices in 2024/25, resilient iron ore and met-coal prices, as well as recovering prices for platinum group metals and rough diamonds. Antofagasta sharesrose by 5% as UBS upgraded the miner to "buy" from "neutral." The analysts at UBS, led by Daniel Major, anticipate superior earnings growth for Antofagasta compared to most of its peers. They attribute this growth to a combination of organic volume growth and unit cost improvement. The price target for Antofagasta was also increased to £17 per share from £16.

FTSE Bias: Bullish Above Bearish below 7400

• Below 7350 opens 7210
• Primary support at 7200
• Primary objective 7550
• 20 Day VWAP bullish, 5 Day VWAP bullish

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