- FTSE 100 ends 56 points higher at 7,620.43
- US stocks rise after data, as banks worry eases
- UK government unveils green strategy and EV investment
4.45pm: Second day of gains
The FTSE 100 enjoyed another day of strong gains, closing 0.7% higher at 7,620.
Risk-on moves dominated for another day, as hopes of weaker inflation in Europe prompted more upside in stocks, commented IG's Chris Beauchamp.
“Fresh from their triumph yesterday, stocks have barrelled into a second day of gains, with the catalyst being the much weaker Spanish inflation reading this morning," Beauchamp said. "Tech has led the way in the US, providing an indication of how strong risk appetite appears to be at present. A few more days of this and we could see investors really start to pile back into equities.”
By the London close, US stocks were off their earlier highs but still positive. The tech-heavy Nasdaq Composite was 0.7% stronger at 12,013, but the Dow Jones Industrial Average was just 0.1% higher at 32,762, the S&P 500 was 0.5% firmer at 4,047.
3.45pm: Morrison's sees growth
Supermarket group Morrisons returned to underlying sales growth in its latest quarter, Reuters has reported, as it benefitted from a push to improve its price competitiveness.
The group, owned since 2021 by US private equity firm Clayton, Dubilier & Rice, reported a 0.1% rise in like-for-like sales, excluding fuel and VAT sales tax, in the 13 weeks to January 29, 2023, with total revenue in its fiscal first quarter up 3.4% to £4.71bn.
In the results statement, the company's CEO David Potts commented: "Our market share has stabilised, our inflation rate is below our peers, and Morrisons' traditional competitiveness, colour and dynamism is steadily returning to every part of the business."
He said the group was targeting £700mln worth of cost savings over the next three years, enabling it to further invest in its loyalty programme, grow its convenience store business and mitigate the cost headwinds it faces, Reuters noted.
3.35pm: Crank it up to 11
UK-based music giant Marshall Amplification is being bought by a Swedish company in a deal that the two businesses say will create the "most exciting audio tech powerhouse", Sky News has reported.
Marshall Amplification was founded by Jim Marshall and his son Terry in 1962 and, since then, the Milton-Keynes-based business has been boosting the sound of some of the world's most famous musicians including Jimi Hendrix, Eric Clapton, The Who, and Oasis.
Under the agreement, all Marshall brands and subsidiaries will be acquired by Zound Industries and will become part of the newly-formed Marshall Group. The Marshall family will own 24% of the group, making them the largest shareholders, Sky News said.
In a statement, Jeremy de Maillard, chief executive of Zound Industries, and of the new Marshall Group, said: "Combining our strengths and unique positioning as the Marshall Group will fuel our ambition to create premium, innovative, products and experiences for musicians and music lovers around the world.
"Zound has proven itself as a global, fast-growing, and progressive company. With the Marshall Group, we are set to accelerate our profitable growth in a $100bn market."
Terry Marshall said: "Since my father and I created the original Marshall amp back in 1962, we have always looked for ways to deliver the pioneering Marshall sound to music lovers of all backgrounds and music tastes across the world - and I'm confident that the Marshall Group will elevate this mission and spur the love for the Marshall brand."
3.20pm: Pain eases in Spain
There was other good news inflation from the eurozone today as well.
Having seen a drop in Germany inflation, Spanish inflation also cooled in March, according to data from statistics office INE. Headline inflation in Spain stood at 3.3% year-on-year this month, down from 6% in February.
The decline in headline inflation was mainly due to the fall in gas and electricity prices this month, after the sharp rise in the same month last year.
The HICP rate came in at 3.1% year-on-year, down from 6% in February. Also encouraging was that core inflation fell slightly to 7.5% from 7.6% in February, the first drop in 23 months.
Economists at ING said: “This shows that despite the sharp fall in headline inflation, inflationary pressures in the economy remain very high, but it is also a sign that the pass-through of higher energy prices into higher consumer prices is starting to lose strength. Moreover, pressures on global supply chains have further eased in recent months to pre-pandemic levels, which is also dampening inflation.”
They added: “We expect headline inflation to cool further in the coming months, mainly thanks to a reduced contribution from the energy component. Energy inflation has been negative since the beginning of the year and will continue to put downward pressure on inflation rates.”
3.10pm: UK Green Taxonomy needed
Following the UK government's launch of its Green Finance Strategy today, Gill Lofts, Global Sustainable Finance Leader at EY, commented: “The Government’s Green Finance Strategy, published today, will be broadly welcomed by the financial services industry, but firms are still waiting for the all-important UK Green Taxonomy consultation, which is now set for the Autumn.
"The taxonomy outlined today is needed to support firms’ sustainable investment strategies and should bring consistency and transparency for both firms and investors, which is needed for real progress to happen. International interoperability of the UK's taxonomy is key to facilitating efficient cross-border financing and to maintaining the requisite levels of transparency, and it’s reassuring to see this remains a focus.
"We're still a long way from implementation, but firms will need to continue to manage short-term challenges, as well as thinking about the processes they will need to put in place, so they’re ready to act swiftly when the time comes.”
2.45pm: Positive start in New York
The FTSE 100 index remains higher as US stocks rose at the open on Thursday as investors digested the latest US economic data while fears over the health of the banking sector faded.
Around 15 minutes after the New York open, the Dow Jones Industrials Average had gained 150 points, or 0.5%, at 32,867, the Nasdaq Composite had added 0.8%, and the S&P 500 was up 0.7%.
On the data front, US fourth-quarter gross domestic product (GDP) was revised down to a 2.6% increase. This was a 0.1% decrease from the 2.7% figure reported in February, with analysts expecting 4Q GDP would be unrevised.
BRI Wealth Management portfolio manager Tom Hopkins noted that, despite the downgrade, 4Q GDP was still a solid showing amid rising interest rates and elevated inflation.
“However, in comparison to the quarter before, 4Q 2022 did show signs that the US economy was losing momentum with business spending slowing and consumer spending posting the lowest growth since 1Q 2022,” Hopkins said.
Meanwhile, the number of Americans filing for unemployment benefits rose modestly last week, demonstrating the continued strength of the labor market despite tightening credit conditions. Claims increased from 191,000 to 198,000, slightly above the consensus expectation of 196,000.
Pantheon Macroeconomics chief economist Ian Shepherdson said the seasonal patterns pointed to a dip in claims but the shift in the weather - the past two weeks have been colder than usual, the first back-to-back chilly spell since late November - was always likely to exert a bit of upward pressure.
“The level of claims remains extremely low, but the cycle bottom probably is now in the past, and looking ahead, the lagged impact of the surge in layoff announcements ought to drive claims substantially higher during the second quarter,” he said.
2.25pm: Do mention inflation
The headline year-on-year inflation rate in Germany dropped to 7.4% in March, down from 8.7% in February and the lowest level since last summer, however, there are still no signs of any broader disinflationary trend outside energy and commodity prices
Economists at ING commented: "Today’s sharp drop in headline inflation will support all those who have always been advocating that the inflation surge in the entire eurozone is mainly a long but transitory energy price shock. If you believe this argument, today’s drop in headline inflation is the start of a longer disinflationary trend.
"As much as we sympathised with this view one or two years ago, inflation has, in the meantime, also become a demand-side issue, which has spread across the entire economy. The pass-through of higher input prices, though cooling in recent months, is still in full swing. Widening profit margins and wage increases are also fueling underlying inflationary pressure, not only in Germany but in the entire eurozone."
They added: "Available German regional components suggest that core inflation remains high. While energy price inflation continued to come down and was even negative for heating oil and fuel, food price inflation continued to increase. Inflation in most other components remained broadly unchanged. Given that energy consumption is more sensitive to price changes than food consumption, it currently makes more sense for the European Central Bank to only look at headline inflation that excludes energy but includes food prices when assessing underlying inflationary pressure.
"All this means is that just looking at the headline number is currently misleading; there are still few if any signs of any disinflationary process outside of energy and commodity prices."
2.10pm: US inflation still needs taming
The FTSE 100 index held firm as US stock futures remained positive following the release of US Q4 GDP data and the latest weekly initial jobless claims.
Ryan Brandham, head of Global Capital Markets, North America at Validus Risk Management, noted: “US Initial Jobless Claims came in at 198,000, slightly above consensus estimates of 195,000, and up from last week’s reading of 191,000. US GDP came in as expected, at 3.9%.
"These numbers are fairly in line with expectations, and the Fed will likely breathe a small sigh of relief on the uptick in claims from the last few weeks.
"At the margin, this will take some pressure off, but the strong GDP growth means inflation still needs to be tamed”.
Futures for the Dow Jones Industrial Average and those for the broader S&P 500 index both gained 0.6% and contracts for the Nasdaq-100 added 0.7%.
Around 2.10pm, the FTSE 100 index was 54 points, or 0.7% higher at 7,618, below the session peak of 7,638.49.
1.40pm: Some of the top risers and fallers on the junior market
Sanderson Design Group PLC (AIM:SDG) saw its shares surge 8.3% higher to 130.5p after the luxury interior design and furnishings group revealed a “major” licensing agreement with J Sainsbury PLC (LSE:SBRY).
eEnergy PLC (AIM:EAAS) shares continued to soar, adding another 30% to 4.3p following its impressive interim results earlier this week. Revenues were up 58% to £15.1mln for the period, with adjusted EBITDA up 87% to £1.5mln.
Trackwise Designs PLC (AIM:TWD) slumped over 50% after the company warned payments from a recent contract win will be delayed. The financial impact has yet to be quantified but funds from the contract were hoped to secure the group’s funding through to August 2023.
PipeHawk PLC (AIM:PIP) shares fell over 9% after it reported a fall in half-year turnover and profit. The company said turnover in the six months ended 31 December 2022 fell 28% to £2.2mln (December 2021: £3.3mln), resulting in a widened pre-tax loss of £1.8mln (2021: loss of £457,000).
Orcadian Energy PLC (AIM:ORCA) shares fell 11% as the offshore oil junior’s half-year results statement highlighted a need for new capital.
1.00pm: Wall Street to open higher
Wall Street is expected to open higher as worries about the banking system continue to recede and investors turn their attention to inflation data, due out Friday, for further direction.
Futures for the Dow Jones Industrial Average (DJIA) rose 0.5% on Thursday pre-market trading while those for the broader S&P 500 index also gained 0.5% and contracts for the Nasdaq-100 added 0.3%.
Big tech shares led gains on Wednesday, pushing the Nasdaq Composite 1.8% higher to 11,926. The DJIA closed 1% up at 32,718 and the S&P 500 rose 1.4% to 4,028.
Amazon.com shares rose more than 3%, while Meta and Netflix each added more than 2%. Semiconductors also shone, with Micron stock rising more than 7% after the chipmaker reported its fiscal second-quarter figures, despite a $1.4 billion inventory write-down. Following the report, Nvidia climbed 2%, and AMD added 1.6%.
“Another day without any unwelcome banking surprises lifted markets as investors headed back towards a risk-on approach,” commented Richard Hunter, head of markets at interactive investor. “Technology shares were a particular area of buying interest and have seen gains in anticipation of hopes that the interest rate hiking cycle may be nearing its end."
With today’s second GDP reading expected to confirm the US economy expanded by 2.7% in the fourth quarter of 2022, the next economic test comes on Friday, as the Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures index is released, Hunter noted.
“The general expectation is for the number to have moderated further, although still remaining at levels which will suggest that the Fed’s aim of taming inflation has not quite yet been achieved," he added.
"That being said, if the recent banking turmoil has resulted in tighter lending conditions from banks, this effect of further crimping growth could play to the Fed’s advantage in bringing the end of the hiking cycle in plain sight.”
12.45pm: FTSE 100 Rolls-Royce welcomes 'Green Day'
Rolls-Royce believes it stands to benefit from the government’s ‘Green Day’ announcement.
“Rolls-Royce SMR welcomes the Government’s commitment to investing in an energy revolution,” the FTSE 100-listed firm told Proactive.
“As the UK’s sovereign nuclear technology, we are well placed to support the Government’s energy security and net zero objectives.”
Shares bounced on the news, with the plane engine manufacturer gaining 1.2% to 149p.
Today’s green announcement and its fallout have some clear winners and losers, with Drax’s shares falling around 10% after the government rejected its new carbon capture programme, although it has recovered from early losses.
The stock is down 1.48% to 566p.
SSE, which said it would invest £100mln in a new pumped-hydro storage plant in Scotland, also put pressure on the government to specify how it would facilitate such projects.
Shares in the company gained 3% to 1,797p after it raised its earnings guidance by 10p per share.
12.35pm: London IPO
A rare sight in 2023, but a welcomed one nonetheless, a flotation in London!
Seaweed farming business Ocean Harvest Technology announced that it will list on the AIM with an IPO that would value the business at £20.1 million.
The business is set to float on 4 April. It will place 37.5mln shares, at 16p per share, raising £6 million, which it expects to use to grow its marketing and sales teams.
So far this year, four companies, including Ocean Harvest, have confirmed their intention to float this year in London.
12.19pm: Lithium continues to slide
Lithium prices continued to slide in the year to date, down 55%.
The metal, a key component in batteries used in electric vehicles (EV), was trading at 260,000 CYN per tonne in March, the lowest level in 15 months.
Robust output and a pullback in demand were attributed to the price slip.
The continued slide in price could have some material impact on the government’s green strategy, which had some focus on EVs.
Specifically, it said it would be investing £381mln in the Local Electric Vehicle Infrastructure fund to install “tens of thousands of new chargers across the country.”
Aside from investing in charging infrastructure, the government said it will be consulting ways to provide certainty to the EV sector and boost the second-hand market.
Shares in global lithium miner, Rio Tinto, seemed unphased by the fall in prices, up 1.78% to 5,489p.
The wider FTSE 100 market was up by 71 points, or 0.94%, to 7,635.
11.59am: Activist investor offers THG advice
A company which is never too far from the spotlight, THG and its boss Matthew Moulding were offered four pieces of advice by activist investor Kelso Group.
Share price movement suggests the advice is one THG should take on board, with the stock bouncing 5% to 66.9p.
The £900mln company was told to speed up its proposed move from the LSE’s standard list to a premium listing and provide “appropriate detailed segmental analysis” within its results and accounts.
Kelso, which upped its stake in the online retailer to 7.4mln shares, also said the THG should consider a buyback and “reinvigorate” its relationship with the investment community.
11.37am: Government going the wrong way on 'Green Day'
More on the news making the headlines today, and the government’s Green Growth and Net Zero strategy, which it claims will be achieved through deregulation and competition rather than taxpayer cash “does not live up to the rhetoric.”
Andy Mayer, an energy analyst at think tank The Institute of Economic Affairs believes the government has only stated intentions rather than presenting the “radical” changes to the rules that he believes are necessary.
Shares in Drax, which missed out on the ‘Powering up Britain’ have recovered from earlier lows, with the stock now down 0.9% to 569p compared to the 10% it shed on the open.
Petrofac on the other hand continues to rally, with shares up 69%, after it secured a €13bn offshore wind contract.
FTSE 100 continues to motor along, up 62 points to 7,626.
11.18am: FTSE continues to make gains
London’s blue-chip index continued to make gains, with the FTSE 100 up 57 points to 7,621, with Ocado, JD Sports and SSE leading the charge as the largest risers.
10.46am: Retail footfall welcome boost for JD, Frasers
Data from retail analytics firm Springboard said weekly retail footfall in the week to 26 March 2023 was 97% of the previous week and 80% of the equivalent week of 2019.
According to @Springboard_ weekly retail footfall in the week to 26 March 2023 was:
????️ 97% of the previous week
????️ 80% of the equivalent week of 2019 pic.twitter.com/G9EmYsIAiR
— Office for National Statistics (ONS) (@ONS) March 30, 2023
Shares in FTSE 100 companies JD Sports were up 4% to 175p, while Frasers Group gained 2% to 781p.
FTSE 100 was up 44 points, or 0.59%, to 7,610.
10.10am: Vodafone little changed despite job cuts
Shares in Vodafone were little changed, down 0.3%, despite news that it is planning to axe 1,300 full-time jobs in Germany, roughly 6.3% of its workforce in the country.
Chief executive of its German arm, Philippe Rogge, told the newspaper Handeslblatt of the job cuts.
The telecoms giants reported weakness in Germany last month, with service revenue down 1.1% in the third quarter, which interim chief executive Margherita Della Valle said was “simply not good enough.”
Vodafone also announced in March that it would be slashing 1,000 roles in Italy while telling the Financial Times at the start of the year it would be letting go of several hundred London-based staff.
In November Vodafone cut its annual profit forecast and announced a £1bn cost-cutting strategy.
The FTSE 100 was up 51 points to 7,615.
9:50am: ‘Green Thursday’ triggers big stock moves
Its all about energy on so-called ‘green Thursday’ with shares in British coal miner Drax down 5%, at 546.5p, whilst offshore engineer Petrofac saw its shares rocket some 60% as it unveiled a wind-farm deal worth up to €13bn and comprising six major projects.
Plans put forward by Drax were rejected under the government’s new carbon capture programme.
In London, the FTSE 100 moved 38 points higher to trade at just over 7,600.
Elsewhere in the morning’s headlines greetings cards eCommerce firm Moonpig said it recorded its largest-ever week of sales ahead of Mother’s Day. The group reconfirmed full-year revenue guidance of £320mln.
Revolution Beauty entered into a new financing agreement with its banks of £32mln, down from the previous £40mln arrangement. The revised deal reflects the group's cash requirements and gives the business sufficient liquidity, it said.
9:38am: FTSE 100 builds gains, up 40 points
Topping the top-100 leaderboard is Ocado Group PLC (LSE:OCDO), continuing its gains after the update from its UK joint venture with M&S earlier in the week.
SSE PLC (LSE:SSE) is also among the top risers after raising its earnings guidance this morning, despite falling behind planned renewable energy production targets by 13% in March due to poor weather conditions.
This comes on the same morning that Downing Street unveiled its new energy strategy, 'Powering up Britain', though this has led to disappointment for some companies, including Drax Group (LSE:DRX).
Even though a big commitment to carbon capture was at the centre of the plans, the government rejected Drax's plans for a new carbon capture programme.
Analysts at RBC said the government's decision not to put Drax into its Track 1 project negotiation list was a surprise, given the company’s importance to energy security.
The government also revealed it would grant £240mln worth of funding for green hydrogen projects, alongside launching public body Great British Nuclear (GBN) to aid the first small modular reactor competition, due to begin in April.
GBN’s first job is to launch a new competition to select the best Small Modular Reactor technologies – of clear interest for Rolls-Royce Holdings PLC (LSE:RR.) – "for development by autumn".
On hydrogen, a shortlist of 20 projects has been announced to take to the next stage in the first electrolytic hydrogen allocation round, with the government’s ambition for the UK to be generating "enough to power all of London for a year by 2030".
One of the 20 was a £0.5mln grant for Inverness Green Hydrogen Project, a development by Getech Group PLC's (AIM:GTC) H2 Green arm.
9.03am: City of London loses lead
London has lost its sole lead as the world’s top global financial centre, according to research by the City of London Corporation, the first year that the UK capital has not been the clear leader.
London and New York have tied for the top spot and the findings from the City’s governing body will add to concerns over the competitiveness of the Square Mile.
The survey showed London received an overall competitiveness score of 60, up from 59 last year, but New York increased its score by two points to equal London. Singapore placed in third, scoring 51, while Frankfurt scored 46, Paris 43, and Tokyo 35.
Chris Hayward, policy chair at the City of London Corporation, said London’s “competitive advantage is at risk”, adding: “A long-term plan to stimulate growth in the financial and professional services sector is needed.”
The City of London Corporation has begun working on its own proposals to ensure the UK financial and professional services sector remains internationally competitive over the next decade.
8.35am: Petrofac surges after penning multi-billion pound contract
Petrofac's shares shot up 60% to 77p after it announced it and Hitachi Energy were awarded a multi-year framework agreement by TenneT worth €13bn.
The deal, the biggest in Petrofac’s history, covers six projects. Each project comprises the engineering, procurement, construction and installation of an offshore HVDC transmission station, onshore converter station and associated infrastructure.
Each project will be executed under a standalone contract valued at over €2bn, split equally between Petrofac and Hitachi Energy.
The agreement includes an initial commitment to deploy six record-breaking renewable integration systems, five of which will connect offshore wind farms to the Dutch grid and the sixth to the German grid. Each of these connection systems has a capacity of 2GW and a voltage level of 525 kilovolt – a world-first for offshore wind.
Petrofac and Hitachi Energy began working together in June 2022, to provide joint grid integration and associated infrastructure solutions to support TenneT’s 2GW Programme.
FTSE 100 is up 30 points to 7,595.
8.10am: FTSE makes marginal gains
FTSE 100 pushed ahead on the open as markets continue to recover from last week’s mini-banking crisis.
London’s blue-chip index, as of 8.10am, gained 11 points, or 0.15%, to 7,575, still some way off the 8,014 points the index peaked at on 20 February.
FTSE 250 started the day stronger, making up 102 points, or 0.55%, to 18,739.
A dearth of economic data in the UK today investor’s eyes are keenly on US GDP figures, with the next few days a key test for the recent stabilisation seen in the market.
“Given how weak consumer spending was in November and December, it is perhaps surprising that the US economy held up as well as it did at the end of last year,” said Michael Hewson, chief market analyst at CMC Markets.
“The fall in personal consumption from 2.3% to 1.4% wasn’t a surprise, if anything it was surprising that it didn’t fall further, however, the rebound in retail sales in January looks set to more than offset that when the first quarter numbers get released in the next few weeks,” Hewson added.
The US is also reporting weekly jobless claims numbers which, despite all the recent reports of job cuts, remain below 200,000 per week.
Hewson expects to see a modest rise from 191,000 to 195,000.
7.40am: Cars manufactured rose in February
Cars built in UK factories last month grew to 69,707, over 8,000 more than the same period in 2022, the Society of Motor Manufacturers and Traders (SMMT) said.
The report by the trade association noted an improvement in the supply of semiconductors which had plagued the global car industry in 2021.
Production for the home market increased by 20% and by 11% overseas, with most exports made the UK’s largest trading partner, the European Union.
Mike Hawes, chief executive of the SMMT, said February’s improvement showed “the industry is on the road to recovery.”
“The fundamentals of the sector are strong; a highly skilled workforce, engineering excellence, a sector that is embracing new electrified vehicle manufacturing and wide-ranging capabilities in the EV supply chain,” Hawes said.
“To take advantage of global opportunities, however, we must scale up at pace and make the UK the most attractive destination for automotive investment by addressing trading and fiscal costs and delivering low carbon, affordable energy.”
7.00am: FTSE expected to make bright start
The FTSE 100 is expected to make a bright start on Thursday following strong gains in the US.
Spread betting companies are calling London’s lead index up by around 22 points.
US stocks strongly advanced on Wednesday as a series of upbeat earnings reports focused minds away from the recent turmoil in the banking sector. Paychex (NASDAQ:PAYX), Micron Technology and Lululemon Athletica (NASDAQ:LULU) all rose strongly after well-received numbers.
The Dow Jones Industrial Average jumped 323.35 points, or 1.0%, at 32,717.60. The S&P 500 gained 56.54 points, or 1.4%, at 4,027.81 and the Nasdaq Composite firmed 210.16 points, 1.8%, to 11,926.24.
In Asia on Thursday, investor sentiment was more mixed. The Nikkei 225 index in Tokyo was down 0.8%. In China, the Shanghai Composite was up 0.1%, while the Hang Seng index in Hong Kong was up 0.1%. The S&P/ASX 200 in Sydney closed up 1.0%.
Back in London and the early focus will be a trading statement from AO World PLC (LSE:AO.) and results from Impellam (AIM:IPEL), Moonpig and Renalytix.
Later today there is a US GDP reading and US weekly jobless claims figures to digest.