- FTSE 100 ends 11 points higher at 7,631.74
- US stocks hold firm after PCE data eases
- UK Q4 GDP revised upwards, house prices fall
4.55pm: Just what the doctor ordered
The FTSE 100 ended the first quarter of 2023 on the front foot after a volatile month, closing 0.2% higher at 7,632.
Stocks were helped on the home straight after the US Federal Reserve’s preferred measure of inflation, the personal consumption expenditures (PCE) price index, rose less than expected last month, fueling hopes that the central bank’s aggressive rate hikes over recent months have helped ease price pressures.
“The lower PCE figure in the US was just what the doctor ordered, and provided investors with reason to take a sunnier view of the outlook as they peer into Q2," commented IG's Chris Beauchamp. "Having escaped without any more bank failures this week, hopes will rise that the crisis of March is now behind us.”
“Price tends to lead sentiment, so we should see more flows back into stocks in Q2, reversing March’s sharp outflow," he added. "Uncertainty about the Fed’s next move will prevent sentiment from becoming too bullish, but it looks like the upside surprise in stocks could be the story of 2023.”
By the London close, US stocks were also set for a positive end to the quarter. The tech-heavy Nasdaq Composite was 1% stronger at 12,299, while the Dow Jones Industrial Average was 0.7% up at 33,092 and the S&P 500 was 0.8% firmer at 4,082.
3.55pm: Roller-coaster quarter
The FTSE 100 is heading into the final half hour of the last session of the first quarter of 2022 in the blue, albeit after a volatile few months to start the year, with a new all-time high hit above 8,000 in February before a run back this month due to banking jitters.
Michael Hewson, chief market analyst at CMC Markets UK noted: “There’s a saying that March comes in like a lion and goes out like a lamb, and the last few weeks have certainly felt like that for investors who have had to endure a month of whiplash-inducing volatility.
“The bulls got a huge bite taken out of them in the early part of the month, and to some extent, are still licking their wounds now. The last few days have seen a lot of those losses slowly chipped away at, as the month bows out like a lamb, and with slightly less fanfare and optimism than when it started it.”
He pointed out that the UK blue chip index has underperformed its European peers over the past three months, having given back a good proportion of its quarterly gains in March, largely due to weakness in the banking sector which has seen the likes of Barclays underperform, finishing the month down over 14%, while Standard Chartered has lost over 20%.
Combined with weakness in basic resources and commercial real estate, Hewson said the FTSE 100 looks set to finish the quarter, just over 2.5% higher. The German DAX on the other hand looks set to finish the quarter over 11.5% higher, as it looks to eke out a monthly gain after headline inflation in the EU fell by more than expected in March.
3.40pm: Vanquis confident
Vanquis Banking shares ticked 2.4% higher in late trading to 238p after the FTSE 250-listed firm reported a solid performance in its full-year 2022 results.
The lender benefited as its net interest margin increased by 0.5 basis points to 21.0%, reflecting a higher asset yield. Asset quality across the group's loan books remained high, Vanquis said, while delinquency trends were stable, reflecting its focus on lower-risk customers.
Group statutory profit before tax from continuing operations were £110.1mln, down from £142.2mln, which reflected an increase in central costs.
At the end of December 2022, the firm's capital and liquidity positions remained robust, with regulatory capital of £679mln, down from £707mln year-on-year, equating to a CET1 ratio of 26.4%, down from 29.1%, and a total capital ratio of 37.5%, down from 40.6%.
Vanquis proposed a final dividend for 2022 of 10.3p per share, reflecting its strong capital position and the board's confidence in the group's outlook. That makes a total dividend payable of 15.3p per share for the year, and a pay-out ratio of adjusted continuing earnings of 40%.
3.25pm: Viva Espana
It's not all bad news for British Airways owner International Consolidated Airlines Group PLC (IAG), as Iberia, the FTSE 100-listed firm's Spanish airline, plans to hire a total of 2,145 staff in the first half of the year to be able to handle the Easter travel rush and the summer season, according to a Reuters report.
The airline, which operates from a hub in Madrid and mainly services Europe and Latin America, will hire 100 new pilots and 442 flight attendants, a spokesperson for the airline told Reuters, with the balance hired to be ground staff.
The airline had around 17,000 employees as of the end of 2022.
Traffic at Spanish airports surpassed pre-pandemic levels in January, faster than in most in the region, Reuters noted, as ACI Europe, the body representing European airports, pushed back the full recovery in airline passenger volumes to 2025 from its previous forecast of 2024.
3.10pm: No Fly Zone
More than 1,400 security officers in the Unite union, who work for Heathrow Airport, have begun 10 days of industrial action after eleventh-hour talks on Thursday broke down without a resolution, the BBC News website reported.
The strike, which threatens to disrupt the UK's largest airport at the start of the Easter school holidays, involves security guards at Terminal 5, which is only used by British Airways, and those who check cargo. Unite has accused the airport of a real-terms wage cut.
Heathrow said it had offered a 10% pay increase back-dated to 1 January, plus a lump sum payment of more than £1,000.
The airport said contingency plans were keeping the airport operating as usual, but British Airways cancelled about 70 flights for Friday, the report said.
This includes flights already removed from the schedule due to the strikes, and cancellations for other reasons, such as bad weather and an air traffic control strike in France.
Picket lines were mounted outside the airport and Unite told the BBC the strike was being "well supported."
2.50pm: PCE provides lift
US stocks kicked off the last day of the first quarter in positive territory, buoyed by cooler-than-expected personal-consumption expenditures (PCE) price index data, which is the Federal Reserve's preferred measure of inflation.
Around 20 minutes after the New York market open, the Dow Jones Industrials Average had added 173 points, or 0.5% at 33,217, while the S&P 500 was also up 0.5%, and the Nasdaq Composite added 0.4%.
FOREX.com market analyst Fiona Cincotta noted that the latest PCE data unexpectedly cooling was fueling optimism that peak interest rates could be near.
“Things are moving in the right direction for the Fed but at a painstakingly slow pace,” she said. “The data comes after the markets had scaled back rate hike bets as the banking crisis unfolded and priced in a pause by the Fed in the May meeting and two rate cuts by the end of the year.”
Cincotta said in line with less hawkish Fed bets, stocks were rising and the US$ had eased.
“US indices are set to book strong gains across the week with the S&P 500 on course for its best week since January,” she added.
2.30pm: Lower Marks
Marks and Spencer Group PLC's plans to shut 67 of its larger ‘full line’ stores are set to pick up pace this month, according to a newspaper report.
The retailer revealed last year it intended to close the locations to shake up its business, with stores in Middlesborough and Castleford set to get the chop this month, according to the Mirror.
However, M&S did say it will open 104 smaller, Simply Food shops over the next five years, with many of them expected to be situated in the same area or location as the planned closures.
Over same period, M&S said it wants to reduce its full-line stores while increasing its food-only sites.
2.15pm: Fed's preferred inflation rate eases
The FTSE 100 index held firm with Wall Street indices continuing to point higher as US consumer spending increased a seasonally adjusted 0.2% in February, from January’s revised 2% increase, which was the largest one-month gain in nearly two years, according to data from the Commerce Department.
When adjusted for rising prices, spending fell 0.1% in February from the prior month, after rising a revised 1.5% in January.
The core personal-consumption expenditures (PCE) price index - one of the Federal Reserve’s preferred gauges of inflation - was up 4.6% in February from a year earlier, an easing from 4.7% the prior month. The overall PCE-price index rose 5% in February from a year earlier, down from a revised 5.3% in January.
Price increases moderated on a month-to-month basis. The overall PCE-price index increased 0.3% in February from the prior month, compared with 0.6% in January. Core prices rose 0.3%, in February from the prior month, compared with January’s revised 0.5% gain.
1.30pm: A quick look at some fallers in London
Pensana - down 41% to 32.9p: Shares plunged after the rare earth exploration and processing company published interim results that revealed a pressing need for more funding, with a current cash balance of US$0.2mln of cash and US$9.1m of outstanding creditors. The group, which raised US$4mln from M&G’s investment arm in January, said it needs to secure more funding to settle its outstanding obligations in the immediate term and is dependent upon the continuing cooperation and forbearance of its suppliers until such funding is secured.
Shearwater - down 39% to 50p: The cybersecurity company said is bracing for reduced profits in its full financial year after a weak fourth quarter. Full-year revenue is set to come in at £27mln, lower than the £35.9mln in sales in 2022 and a current consensus of £37.7mln, the company said. Shearwater will now just break even in the 2023 financial year. compared to £4.4mln in underlying earnings last year.
NCC - down 36% to 98.1p: Another cybersecurity firm NCC shed over a third of its share price after issuing a profit warning. Full-year underlying profits are expected to reach between £28mln and £32mln, against £47mln originally forecast, a trading update revealed. The Manchester-based firm claimed that strong headwinds mainly from the US and partially from the UK were the cause of the downgrade.
1.00pm: US markets await PCE data
Wall Street looks set to end the first quarter of 2023 on a mixed note ahead of the pre-market release of the Personal Consumption Expenditures (PCE) index, the Federal Reserve's preferred measure of inflation.
Futures for the Dow Jones Industrial Average (DJIA) rose 0.2% in Friday pre-market trading while those for the broader S&P 500 index gained 0.1%. But contracts for the Nasdaq-100 shed 0.1%.
US stocks closed higher on Thursday after fourth-quarter 2022 growth data was revised downward, sparking investor hopes the Fed will pause its rate-hiking moves.
The Nasdaq Composite added 0.7% to 12,013, while the DJIA closed 0.4% higher at 32,859 and the S&P 500 rose 0.6% to 4,051.
“Tech once again lead the bullish charge, with the Nasdaq teetering on the edge of bull market territory,” commented TickMill Group market analyst Patrick Munnelly.
Markets are increasingly pricing rate cuts into the year's end leading investors to allocate to growth stocks, Munnelly noted.
“February data for the Federal Reserve’s preferred inflation gauge, the consumer expenditure deflator is believed to demonstrate a modest retreat in overall inflation to 5.2% from 5.4% in January, the core metric may print a minor uptick to 4.8% from 4.7% prior, once again leaving Fed officials focused on the inflation fight,” he added.
Ahead of the data and the restart in the US and London's blue chips are ticking along in a tight range, up 19 points at 7,639.
12.37pm: ChatGPT switched off in Italy
Italy's privacy watchdog has blocked the controversial robot ChatGPT, saying the artificial intelligence app did not respect user data and could not verify users' age.
The decision "with immediate effect" will result in "the temporary limitation of the processing of Italian user data vis-a-vis OpenAI", said the Italian Data Protection Authority.
The Italian agency alleged "the absence of any legal basis that justifies the massive collection and storage of personal data in order to 'train' the algorithms underlying the operation of the platform".
12.00pm: Capita hit by IT issues
Shares in Capita PLC (LSE:CPI) have fallen after reports the outsourcing group is experiencing a major IT incident.
The Times initially noted the issues and the Guardian has also reported the issues which it said have triggered fears that the company that is in charge of crucial operations for the NHS and the military could be under cyber-attack.
Capita staff have been advised that the company is "urgently investigating" and asked "not to attempt access via VPN or submit password recovery requests"
— Katie Prescott (@kprescott) March 31, 2023
Capita staff have been unsuccessfully trying to access their systems since before 7am, I'm hearing. The UK's biggest outsourcer - which handles major NHS contracts - is investigating an IT incident this morning.
— Katie Prescott (@kprescott) March 31, 2023
The Guardian said staff are understood to have been unable to access IT systems at the outsourcing company since Friday morning, with an early investigation yet to establish the cause.
A spokesperson for Capita, who was unable to access their own email, said in a statement dictated over the phone to the paper: “We are aware of a technical issue with our systems, which we are investigating.”
Shares in Capita are trading 2.2% lower at 37.80p Friday lunchtime.
11.32am: British Gas owner loses court battle over Bulb
British Gas owner, Centrica PLC (LSE:CNA), and two other major energy suppliers have lost their High Court challenge over the UK government's handling of the sale of collapsed energy firm Bulb.
Scottish Power, E.ON and Centrica claimed an "unfair sale process" led to decisions "to commit billions of pounds of taxpayer money to facilitate the acquisition of a failed business" by rival firm Octopus Energy.
The three businesses brought legal action against the government, alleging its decision-making process was "flawed and unlawful".
But in a ruling on Friday, Lord Justice Singh and Justice Foxton rejected the legal challenge.
The judges concluded: "In circumstances in which the Octopus transaction was the only bid to emerge from a lengthy merger & acquisition process which the Secretary of State was entitled to conclude was open, transparent and competitive, that was an assessment lawfully open to the Secretary of State."
They added: "It was open to the Secretary of State on the material before him to conclude that the other options were inferior to proceeding with the Octopus bid, involving significant execution risks and higher forecast costs."
Octopus welcomed the ruling: “The High Court’s findings are clear: Octopus paid a fair price for Bulb in an open and competitive process. The High Court was equally clear that there was no merit at all in the case brought by British Gas and the other legacy companies.”
Centrica said the ruling was "disappointing" and that it would now "consider our options.”
A spokesperson said: "We think state bailouts for energy companies puts a burden on the UK taxpayer and is avoidable. We felt the original bailout of Bulb was unnecessary and the National Audit Office report this week concluded there were risks and uncertainties in recovering these funds from Octopus."
11.18am: Eurozone core inflation still sticky despite fall in headline number - ING
ING Economics pointed out the March decline in Eurozone inflation was widely expected due to the energy price developments, which spiked in March last year meaning the base effect is very favourable.
Energy inflation fell from 13.7% to -0.9% in March, which is the first decline in energy inflation since February 2021.
Therefore the bigger concerns remain around the other components, ING explained.
“This is where a lot more work needs to be done,” economists at ING felt.
Core inflation increased from 5.6% to 5.7% in March with services inflation increasing from 4.8% to 5% while goods inflation fell from 6.8% to 6.6%.
Food inflation – which has been the largest contributor to headline inflation in recent months – increased from 15% to 15.4%. “This indicates that price pressures remain high for the moment, although this should improve in the coming months,” ING said.
ING noted forward-looking data are starting to become less concerning from an inflation perspective though but the main concern seems to be around wage developments.
Wage growth has been rising and with unemployment still at a low of 6.6%, the chances of there being upward pressure on wages remain. “This could result in somewhat stickier inflation, mainly on the services side,” ING felt.
ING thinks core inflation will remain a concern for the ECB and will be the main reason for the ECB to continue to hike in the near term.
“We expect another 25bp hike in May and another in June,” ING said.
“As the inflation outlook is starting to look more benign, and recent banking turmoil serves as an illustration that aggressive hikes are not without cost, we expect a peak to be reached thereafter,” it added.
Meanwhile, the Footsie is having a quiet but positive morning, now up 17 points.
11.00am: BAE signs up to electric aircraft venturre
BAE Systems is stepping back into the world of passenger aircraft manufacturing via a partnership with a Swedish electric transport start-up.
The FTSE 100 aerospace and defence company has joined forces with Heart Aerospace, a Swedish electric airplane maker, in a collaboration to define the battery system for Heart’s ES-30 regional electric airplane.
The battery will be the first-of-its-kind to be integrated into an electric conventional takeoff and landing (eCTOL) regional aircraft, allowing it to efficiently operate with zero emissions and low noise.
“Our industry-leading solution builds on decades of expertise delivering technologies and systems needed to progress sustainable transportation,” said Ehtisham Siddiqui, vice president and general manager of Controls and Avionics Solutions at BAE Systems. “We are delighted to collaborate with Heart Aerospace on the innovative battery system for its electric airplane.”
Work on the programme will be conducted at BAE’s facility in Endicott, New York.
Sofia Graflund, COO at Heart Aerospace, said “We look forward to decarbonizing air travel together.”
The ES-30 airplane will be powered by four electric motors, and has an all-electric range of 200 kilometres, an extended reserve hybrid range of 400 kilometres with 30 passengers and ability to fly up to 800 kilometres with 25 passengers.
Heart Aerospace has a total of 230 orders and 100 options for the ES-30, along with letter of intent for an additional 108 airplanes.
BAE cancelled its civil aerospace programme in 2001 not long after the 9/11 terrorist attacks and quit the civil aircraft manufacturing market in 2006 when Mike Turner, then its chief executive, ordered the sale of BAE’s 20% stake in EADS, the forerunner to Airbus, the world’s largest aircraft manufacturer.
10.17am: Eurozone inflation eases in March, beats forecasts
Eurozone inflation has fallen sharply to its lowest level for a year in March following a decline in energy costs.
Harmonised consumer prices in the euro area rose 6.9% year-on-year, down from 8.5% in February to reach its lowest level since February 2022. The figure was better than forecasts for a dip to 7.1%.
Euro area #inflation at 6.9% in March 2023, down from 8.5% in February. Components: food, alcohol & tobacco +15.4%, other goods +6.6%, services +5.0%, energy -0.9% - flash estimate https://t.co/JanK9NcMzB pic.twitter.com/WzYZfXCEeM
— EU_Eurostat (@EU_Eurostat) March 31, 2023
The decline was driven by a 0.9% fall in energy prices
10.01am: EMIS tumbles as CMA launches further probe into United Health deal
Shares in EMIS Group plc (AIM:EMIS) plunged after the UK's competition watchdog referred its planned acquisition by UnitedHealth Group for an in-depth investigation.
The Competition and Markets Authority said on the basis of information currently available this merger may be expected to result in a substantial lessening of competition within a market or markets in the UK.
Therefore it has launched a phase 2 investigation into the deal.
In a statement Emis, a Leeds-based healthcare software producer said UnitedHealth's had proposed a remedy to the CMA of selling Optum UK's Medicines Optimisation and Population Health businesses in the UK.
But the CMA rejected this idea noting that it would not "achieve as comprehensive a solution as is reasonable".
In June last year, Emis had said it had agreed to a £1.24bn takeover offer by Optum Health Solutions UK, which is a subsidiary of Minnesota-based healthcare and insurance firm UnitedHealth.
Emis shares fell 22% in London on Friday morning following the announcement.
9.48am: British Airways owner lifted by Deutsche, Barclays upgrade
Deutsche Bank has upgraded a number of European airlines including British Airways owner, International Consolidated Airlines Group SA.
The German bank thinks the outlook for the sector has materially improved and as a result has raised IAG, Air France-KLM (OTC:AFLYY) and Deutsche Lufthansa to buy from hold.
The broker lifted its price target for IAG to 200p from 180p, for Air France to €2.3 from €1.75 and for Deutsche Lufthansa to €14 from €10.5.
Analyst Jamie Rowbotham said despite exercising prudence on yields, on non-fuel unit costs and on oil itself "we nonetheless see the potential for operating profits in 2023 to now be >20% higher than we previously envisaged, and ~18% above current Bloomberg consensus estimates on average."
Analysts at Barclays have also taken a more positive view of the IAG upgrading to overweight from neutral. Barclays made a similar move on easyJet as well. EasyJet shares rallied 4.2%.
Shares in IAG rose 1.9%, Air-France jumped 3.2% and Deutsche Lufthansa firmed 2%.
9.28am: Business confidence at 10-month high
Business confidence has risen to its highest level in ten months as companies become increasingly optimistic about filling staff shortages, according to the latest Lloyds Bank business barometer.
An easing of wage demands from last year’s highs boosted optimism among business leaders that they will be able to recruit staff, according to the survey which covers 1,200 companies with an annual turnover of more than £250,000.
Optimism about the economy improved by 11 points to 23% while trading prospects rose 4 points to 52%. The net balance for the latter rose by its biggest margin in two years.
Wage expectations rose in March, with 26% of businesses expecting to hike pay by 3% or more, up from 23% the previous month. The share of businesses that expect pay growth of 2% or more rose for the second month in a row to 45%.
However, there are signs that the rate of wage growth is slowing down. Anticipated staffing levels rose for a fourth consecutive month, while the share of businesses planning to increase their prices further fell to a six-month low.
Sophie Lund-Yates at Hargreaves Lansdown noted: "There’s a growing belief that businesses are able to recruit staff, which helps keep a ceiling on the wages that need to be offered to fill vacancies. That said, wages are still expected to climb, it’s simply that the rate of growth is anticipated to come off the boil."
FTSE 100 still hovering around opening levels, up 5 points.
9.05am: Citi upgrades US equities, lowers Europe
Citi has upgraded its weighting on US equities to overweight in its latest quarterly review but expects global equities to remain range-bound for the rest of the year.
The bank noted stress in the banking sector has reminded the market of the consequences of monetary tightening.
As a result, Citi thinks investor attention will increasingly shift from risks of higher rates to risks of recession which should catalyse a change in market leadership, with defensives and high-quality sectors/regions continuing to outperform.
"We thus upgrade the US to overweight along with the global Tech sector," the broker said.
Citi is less keen on Europe and global financials, both downgraded to neutral, given their cyclical nature.
The broker reckons further downgrades to consensus EPS forecasts remain likely. "Top-down, we expect a 5% EPS contraction," it said.
"Global equities should remain range-bound to year-end, with volatility set to continue in the near term before an eventual rebound in the back half of this year," Citi added.
The FTSE has slipped back to parity now with the Dax in Frankfurt and the Cac 40 in Paris also little changed.
There is a raft of inflation data coming out today in the Eurozone and the US and French inflation numbers have come in first.
Inflation across the channel fell sharply in March due a steep drop in energy costs, despite an acceleration in prices of food, tobacco and manufactured goods.
Harmonised French consumer prices rose year-on-year by 6.6%, down from 7.3% in February, but slightly more than estimated by economists who expected a decline to 6.5%.
The main driver behind the easing was a drop in energy inflation from 14.1% in February to 4.9% in March, according to Insee, the national statistics agency. However, food inflation accelerated to 15.8% and manufactured goods inflation rose to 4.8%.
8.35am: Ocado rises after legal win
Shares in Ocado Group PLC (LSE:OCDO) rose 4% in early exchanges after it said had "comprehensively won" the patent infringement suit brought by AutoStore.
The UK High Court ruled that the Autostore patents were invalid and, in any event, Ocado did not infringe them.
Autostore had originally asserted six patents against Ocado in October 2020. Of these six patents, two were invalidated by the European Patent Office before judgment was handed down, two were withdrawn by Autostore shortly before the hearing started and the remaining two patents were invalidated on Thursday,
The decision follows Ocado's victory over AutoStore in the International Trade Commission in the USA last year. Ocado's claims against AutoStore for infringing Ocado's IP are continuing in Germany and New Hampshire, USA.
8.20am: FTSE continues good run
FTSE 100 pushed higher in early exchanges despite a mixed bag of news on the health of the UK economy.
At 8.15am, London's lead index was at 7,637.87, up 17.44 points, or 0.23% while the FTSE 250 edged higher to 18,927.44, up 19.70 points, or 0.10%.
The differing economic news included UK GDP being revised up marginally, an upbeat business survey from Lloyds Bank but data showing falling house prices from Nationwide.
Quarter four GDP figures showed the UK narrowly avoided recession with economic growth revised upwards slightly to 0.1% from zero before, according to figures from the Office for National Statistics.
But as Gabriella Dickens at Pantheon Macroeconomics noted the UK is still is the only G7 economy in which GDP has not recovered yet to its level in quarter four 2019, before the pandemic struck.
“Indeed, GDP still was 0.6% lower than it was three years ago in the UK, whereas it was 5.1% higher in the US, 2.9% higher in Canada, 0.8% in Japan, 1.2% in France, 1.9% in Italy and just back in line in Germany,” she added.
She reckons the economy likely will continue to flatline in the first half of this year.
But there was gloomier news on house prices which are falling at the fastest annual rate since the aftermath of the financial crisis, according to Nationwide.
Sarah Coles, head of personal finance at Hargreaves Lansdown noted the "house price slip has become a slump, with the biggest annual price drop in 14 years. The pace of descent accelerated, and we're already almost 5% below the peak in August. Unfortunately, the indications for the future aren’t looking terribly promising either."
"Buyers have been broken by rampant inflation, jacked-up mortgage rates, a stagnating economy, and the threat that there could be worse to come. RICS figures for February showed that buyer demand fell again – for the tenth consecutive month. Buyer enthusiasm is likely to have been dampened even further by the fact the gradual fall in mortgage rates stalled in March," she noted.
Shares in Ocado Group PLC (LSE:OCDO) rose 4.4% after another legal win in a patent dispute against AutoStore AS. The UK High Court verdict concerned two patents. Autostore back in October 2020 had claimed online grocer and warehouse technology firm Ocado infringed on six of its patents, though two of those claims were invalidated by the European Patent Office before a judgment was made. Another two were withdrawn by Autostore before a hearing started. The remaining two patents were invalidated by a judge in Thursday's verdict.
News of a new CFO at Rolls-Royce Holdings PLC (LSE:RR.) was welcomed by the market with shares marked 1.3% higher while shares in Spire Healthcare Group Plc (LSE:SPI) firmed 2.8% after Jefferies upgraded the stock to buy with a 250p price target.
But NCC Group PLC (LSE:NCC) tumbled 48% after warning annual profit will be lower than previously expected.
Mike Maddison, Chief Executive commented: "Macro-economic headwinds, market volatility and uncertainty are undermining business confidence, particularly in the technology sector where we are well represented, and as a result we are seeing demand fall in the form of projects being further delayed, reduced or cancelled."
7.52am: UK house price fall at fastest rate since 2009 - Nationwide
UK house prices are falling at the fastest annual rate since the aftermath of the financial crisis, new figures from Nationwide showed.
The building society reported that UK house prices fell for the seventh month running in March, as the aftermath from the disastrous mini-budget continued to hammer the housing market.
This month, they fell by 3.1% compared to a year ago, which is the largest annual decline since July 2009. Economists had forecast a 2.2% decline.
Across the UK, prices fell by 0.8% month on month, leaving the average UK house price at £257,122.
All regions of the UK saw a slowing in price growth in Q1, with most seeing small year-on-year falls. West Midlands was the strongest performing region, while Scotland remained the weakest.
Robert Gardner, Nationwide’s chief economist, commented: "March saw a further decline in annual house price growth, with prices down 3.1% compared with the same month last year. March also saw a further monthly price fall (-0.8%) – the seventh in a row – which leaves prices 4.6% below their August peak (after taking account of seasonal effects)."
“The housing market reached a turning point last year as a result of the financial market turbulence which followed the mini-Budget. Since then, activity has remained subdued – the number of mortgages approved for house purchase remained weak at 43,500 cases in February, almost 40% below the level prevailing a year ago."
7.22am: Rolls-Royce names BP exec as new CFO
Rolls-Royce Holdings PLC (LSE:RR.) has rejigged its leadership team as new boss Tufan Erginbilgic continues his transformation of the engineering company.
The headline news is a new CFO with Helen McCabe joining later this year from BP where she is currently senior vice president, Finance for the Customer & Products division running a business with reported EBITDA of US$13.7bn last year.
She also holds accountabilities for BP's global refining portfolio.
Erginbilgic, also a former BP exec, said: "I have experienced her abilities first-hand and her skillset will complement the existing capabilities of the Executive Team."
Panos Kakoullis will remain as CFO until at least 31 August 2023.
The company also appointed Rob Watson as head of its important civil aerospace business with immediate effect, while Adam Riddle becomes the new head of its defence business, and chair and chief executive of Rolls-Royce North America.
7.13am: UK economy grows 0.1% in Q4
The UK economy grew marginally in quarter four according to figures from the Office for National Statistics.
Gross domestic product (GDP) is estimated to have increased by 0.1% between October and December, revised from a first estimate of no growth.
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In output terms, the services sector grew by 0.1% and the construction sector grew by 1.3%, while the production sector growth was flat in Q4 2022.
The level of real GDP in Q4 is now estimated to be 0.6% below where it was pre-coronavirus (COVID-19) at Q4 2019, revised upwards from the previous estimate of 0.8% below.
The GDP implied deflator rose by an upwardly revised 7.3% in the year to Q4 2022, primarily reflecting higher cost pressures faced by households.
The household saving ratio increased to 9.3% in Q4 2022, from 8.9% in the previous quarter.
Real households' disposable income (RHDI) increased by 1.3% this quarter after four consecutive quarters of negative growth.
7.00am: FTSE 100 seen flat
The FTSE 100 is expected to open flat on Friday ahead of a key US inflation report later today.
Michael Hewson at CMC said: “As we bring down the curtain on Q3 we also have the latest US core PCE inflation numbers for February, and here the Federal Reserve will be hoping that there are signs that inflation is cooling here as well after the surprise spike to 4.7% in the January numbers, which prompted a sharp spike in US rate hike expectations just prior to the meltdown that we saw at the beginning of this month.”
“The jump higher in PCE core deflator also happened to coincide with a surge in January personal spending, which rose 1.8%.”
Ahead of that Friday's economic calendar has a eurozone inflation reading, UK GDP data and a house price index reading from mortgage lender Nationwide.
In the US stocks made further progress on Thursday. The Dow Jones Industrial Average jumped 141.43 points, or 0.4%, at 32,859.03. The S&P 500 gained 23.02 points, or 0.6%, at 4,050.83 and the Nasdaq Composite climbed 87.24 points, 0.7%, to 12,013.47.
In Asia on Friday, the Nikkei 225 index in Tokyo was up 1.0%. the Shanghai Composite firmed 0.3% and the Hang Seng index in Hong Kong gained 0.6%.
Back in London and the early focus will be on results from Computacenter, while Mothercare is set to release a trading statement.