- FTSE 100 5 points higher at 7,699
- BT names Telia's Allison Kirkby as new chief executive
- Government confirms raft of new oil and gas licences to be granted
4.50pm: FTSE 100 closes higher; US stocks up midday
The FTSE 100 finished the day on a high note, rising 5 points to 7699 as cooling domestic inflation boosted risk appetite even as Heineken cut its 2023 profit growth forecast.
"While investors broadly expected a cut to (Heineken’s) its guidance, a flat to mid-single digit organic EBIT growth is disappointing," analysts at UBS said.
Other notable movers included shares of Dr Martens PLC (LSE:DOCS), which climbed more than 5% after media reports that activist investor Sparta Capital has accumulated tens of millions of pounds of the British bootmaker’s stock.
4pm: Oil prices start week off on front foot
Brent crude was up 0.6% to US$85.51 per barrel this afternoon, while West Texas Intermediate (WTI) added 1.3% to US$82.57.
This puts the commodity on track for the best monthly performance this year, thanks largely to dollar weakness.
“Fears that Saudi Arabia will go further and extend their production cuts into September is seeing demand return at the same time as the US economy looks to be faring better than expected,” stated Michael Hewson at CMC Markets UK.
Similarly, gold looks set to reverse June losses, with monthly gains of 2.5%, though spot prices still remain below the US$2,000 resistance point at US$1,968.
3.37pm: FTSE 250’s stellar July
Briefly moving away from the top-tier stocks, it is worth pointing out that the FTSE 250 mid-cap index is on track for its best monthly performance of the year, or at least roughly on par with January’s performance.
With one hour left of the trading month, the mid-cap index looks like it was close 3.7% higher at 19,182.
In comparison, the FTSE 100 index looks set to close around 2.4% higher, despite hitting an eight-month low within the first week.
Top monthly movers in the 250 set include defence company Babcock adding 33% despite mixed trading results, Domino’s Pizza up 28% on the back of an Uber partnership and Dr. Martens up 26%, having recovered since last month’s profit tumble.
3.18pm: Looking back at the top movers in July
With July drawing to a close, let’s have a look at the best performers in the FTSE 100 across the month.
Taking top spot is Ocado, which surged 68% higher after posting a rare profit in the first six months of 2023.
Rolls-Royce Group comes in second, adding 23.5% after crushing first-half forecasts.
Packaging group Smurfit Kappa, Sports Direct parent Frasers Group and housebuilder Persimmon round out the top five.
The FTSE 100 index as a whole looks set to close around 2.4% higher, despite hitting an eight-month low within the first week.
Glimpses of a fallback in UK inflation helped to push the index higher since this low point.
2.48pm: FTSE 100 hits intraday high
FTSE 100 has added close to 20 points since US markets commenced, bringing the blue-chip index to an intraday high of 7,714.
Both Nasdaq and the wide S&P 500 indexes in New York opened higher than expected at 0.3% and 0.2% respectively, feeding through to higher prices on London-listed equities.
Top FTSE 100 movers include Centrica, British Airways parent IAG, Rightmove and Frasers Group.
Mining heavy hitters Glencore and Angofagasta are also surging thanks to a good showing on the copper spot market.
2.27pm: Bitcoin stuck in a rut
Bitcoin (BTC) has added around 0.6% in today’s trades, with the benchmark cryptocurrency currently swapping for US$29,453.
The world’s largest cryptocurrency has failed to knock above the US$30,000 price point for seven days now, after trending above this price point for most of July.
Without any significant catalysing events in recent weeks, bitcoin appears to be stuck in a rut, with outflows from major bitcoin investment funds starting to pile up.
The global cryptocurrency market capitalisation is currently valued at US$1.19tn, with slightly under 50% attributed to bitcoin’s circulating supply.
Back to footsie, the London blue-chip index is at an intraday high of 7,711, or 0.23% higher day on day.
2.08pm: Surge in copper prices sends miners higher
Copper on the London Metal Exchange has reached a five-week high of US$8,670 (£6,745) per metric ton, the metal’s best spot price since June 22.
The surge in copper prices is likely due optimistic expectations of additional stimulus measures from China, likely to boost the demand for essential resources.
Consequently, copper is set to achieve its most outstanding monthly performance since January.
Major copper miners have responded well. BHP Group Ltd (LSE:BHP, ASX:BHP) has added 0.6% and Rio Tinto PLC (LSE:RIO) 0.4%, while Glencore PLC (LSE:GLEN) has steered 1.7% higher to 474.45p.
The wider FTSE 100 index is currently sitting 0.1% higher at 7,702.
1.35pm: Here’s a quick recap of the top risers and fallers on the junior market today
Metals One PLC (AIM:MET1) made a solid stock market debut, with shares rising to a 5% premium to the issue price in the first hour of trading on AIM.
The company, which has raised £2.2mln as part of its IPO, is advancing battery metal projects at brownfield sites in Finland and Norway.
Harland & Wolff Group Holdings PLC (AIM:HARL), the shipbuilding company, jumped over 17% after it won a vessel refurbishment contract worth up to £70mln.
Executing a “complex mid-life upgrade” at its drydock in Belfast, the biggest in the UK, the company will commence work on the contract for five months in early 2024, a statement revealed.
Aptamer Group PLC (AIM:APTA) shares plummeted by 49% following the company's announcement of a £3.6mln fundraising plan which means the business is no longer for sale.
New shares are being bought for 1p each, a 79% discount to Friday's closing price, giving new investors over 84% of the company, a specialist in Optimer binders used by the life sciences industry.
Jadestone Energy PLC (AIM:JSE) tumbled 34% as more technical problems saw its Montara field, offshore Australia, shut down again.
A gas alarm was triggered in a water ballast tank over the weekend, Jadestone said, indicating a possible seepage into adjacent tanks on the floating production vessel at the site.
Flowtech Fluidpower (AIM:FLO), the hydraulic and pneumatic component engineer, slumped nearly 20% after issuing a full-year profit warning in a first-half trading update.
Revenues for the Flowtech division, the arm aimed at selling fluid power products across all industry markets, dropped by 5.7% year-on-year to reach £26.6mln in the first half of the 2023 financial year.
1.00pm: US futures point to modest gains on Wall Street
US blue chips are expected to push higher on Monday, the final session for July, aiming to consolidate the month's strong gains.
In pre-market trading, futures for the Dow Jones Industrial Average (DJIA) were 0.1% higher, while those for the S&P 500 also rose 0.1%, and contracts for the Nasdaq 100 futures were up 0.06%.
The blue-chip DJIA is up 3.1% so far in July and last week posted a 13-day advance that matched the index’s longest streak of gains going back to 1987.
The broader S&P 500 is up 3,0% for the month, on track for its fifth positive month in a row for the first time since its seven-month streak ending August 2021. The tech-heavy Nasdaq Composite has gained 3.8% month to date, also on track for its fifth straight winning month.
Investor attention this week will be on the July payrolls report, due on Friday, with forecasters expecting the US economy to have added 200,000 jobs for the month. Non-farm payrolls increased by 209,000 in June.
Last week, the Federal Reserve hiked rates to their highest level in more than 22 years with a much-anticipated quarter-point hike to snuff out the spectre of inflation, after a pause in the hiking cycle at its previous meeting.
In a statement after the latest policy decision, Fed chair Jerome Powell said the central bank will make now data-driven decisions on a “meeting-by-meeting” basis.
The corporate earnings river also continues to flow. Joshua Mahony, chief market analyst at Scope Markets commented: "Earnings remain a key driver of markets as we move through the second quarter, with big hitters Apple and Amazon maintaining the tech theme this week.
Today sees few major earnings releases of note, as tomorrow will see more prominent names such as Merck, Pfizer, AMD, Caterpillar, and Starbucks report.
"With 51% of the S&P 500 having reported, this marks the halfway point for Q2 earnings season. It has been notable that those initial reports have seen the blended earnings growth rate for Q2 drop to -7.3% (vs 7% expected), despite seeing 80% of the companies outperform estimates."
12.35pm: Prime Minister backs petrol and diesel ban by 2030
The ban on the sale of new petrol and diesel cars from 2030 remains government policy, the prime minister said today.
Rishi Sunak has been under increasing pressure from a rump of Tory MPs who have called for the deadline to be pushed back.
But, the PM said it remained part of his agenda and reiterated his commitment to transition to net zero in a “proportionate and pragmatic way”.
Echoing Sunak, the energy minister Andrew Bowie told Sky News: “We remain committed to ensuring that more people get access to, are able to buy, are able to drive electric and hybrid cars.”
11.55am: BAT rejects call to relist in US - The Times
The new chief executive of British American Tobacco has rejected calls from a top shareholder to move its primary listing from London to New York saying relocating was “not a top priority” and a “very simplistic view”.
Rajiv Jain, founder of GQG Partners, an American-based investment firm, has encouraged the FTSE 100 owner of Lucky Strike and Dunhill cigarettes to shift its main listing from London, which dates to 1912.
However, Tadeu Marroco, who was promoted from group finance director to the top job in May following the abrupt departure of Jack Bowles as BAT’s chief executive, told The Times said it is “very simplistic to attribute the valuation gap to the place where we are listed”.
“I note that there is an overall difference in terms of valuation between S&P 500, for example, and the FTSE 100, but it’s much more related to the sectors that are present in those indices and the weight of those sectors in the first place.”
11.22am: Mobico rises on reports of Eurostar rival
Mobico Group PLC, the bus and rail operator, is one of a group of companies looking at launching a cross-Channel train service to rival Eurostar, according to reports.
Shares jumped 5.5% to 95.80p.
The Financial Times said other parties involved in the discussions include the Spanish Cosmen industrialist family, which is an investor in Mobico, formerly known as National Express, according to two people with knowledge of the plans.
The new rail service, to be named Evolyn, would start running between London and Paris through the Channel Tunnel as early as 2025, they said, although final details have yet to be finalised and could change.
The initiative would represent the first challenge to Eurostar’s monopoly of passenger rail traffic linking London to major cities in Europe including Brussels and Amsterdam as well as Paris.
Analysts at Liberum said: "We would expect any such project to have a lead time of several years."
They pointed out the Channel Tunnel has extremely stringent safety requirements for trains while customised trains would need to be ordered which implies a lead time of at least two years.
"Government co-operation would also be required to facilitate increased customs and border post capacity at all stations used by the potential new services," the broker added.
10.45am: Eurozone inflation falls and sees return to growth
The FTSE 100 is trading little changed now after figures showed Eurozone inflation fell in line with market expectations and that the single currency area returned to growth during the second quarter of 2023.
Inflation fell in line with expectations to 5.3% in July, according to Eurostat, the EU’s statistical office, down from 5.5% in June.
Euro area #inflation at 5.3% in July 2023, down from 5.5% in June. Components: food, alcohol & tobacco +10.8%, services +5.6%, other goods +5.0%, energy -6.1% - flash estimate https://t.co/ZRulqYvik4 pic.twitter.com/sUJi2lTwUX
— EU_Eurostat (@EU_Eurostat) July 31, 2023
But core inflation, which excludes energy and food prices to give a clearer sign of underlying price pressures, was unchanged at 5.5%, a touch above expectations.
Seasonally adjusted gross domestic product increased by 0.3% in the eurozone in the second quarter, compared to the first quarter, ahead of the consensus of 0.2%.
Euro area #GDP +0.3% in Q2 2023, +0.6% compared with Q2 2022: preliminary flash estimate from #Eurostat https://t.co/n5WsMENWRs pic.twitter.com/jAzDwpeQqC
— EU_Eurostat (@EU_Eurostat) July 31, 2023
ING Economics said the better-than-expected figure was boosted by very strong Irish activity.
"Without Ireland, growth would have been halved," it said, adding that "looking through the most volatile components, we argue that the economy has remained broadly stagnant."
10.17am: Lending picks up in June despite rising rates - Bank of England
UK lenders approved many more mortgages than expected in June and net unsecured lending to consumers leapt by the most in over five years, figures from the Bank of England showed today.
Banks and building societies approved 54,662 mortgages in June, the most since October 2022, and higher than from 51,100 in May, while approvals for remortgaging rose to 39,100 from 34,100 during the same period.
UK Mortgage Approvals Jun: 54.7K (exp 49.0K; prevR 51.1K)
- Net Lending Sec. On Dwellings Jun: £0.1B (exp £0.2B; prev -£0.1B)
- Net Consumer Credit Jun: £1.7B (exp £1.3B; prev £1.1B)
- Consumer Credit (Y/Y) Jun: 7.6% (prevR 7.6%)
— LiveSquawk (@LiveSquawk) July 31, 2023
Net mortgage borrowing by individuals was £100 million in June, swinging from net repayments of £100mln in May and record high net repayments of £1.1bn in April.
The effective interest rate on newly drawn mortgages, meaning the actual interest rate paid, increased by a further 7 basis points to 4.63% in June.
“June's marginal uptick on May shows that people have recalibrated to the new rate environment and are getting on with their lives,” Simon Jones, CEO of investing comparison platform, InvestingReviews.co.uk commented.
The BoE also reported a £1.66bn monthly increase in net consumer lending, the largest such increase since April 2018.
Jones said this “shows the growing reliance on credit as people's finances are stretched to breaking point.”
9.52am: Dr Martens on the front foot
A good start for iconic bootmaker Dr Martens PLC (LSE:DOCS) which has risen after reports an activist fund manager has been building a stake in the firm.
Sky News reported that Sparta Capital has quietly accumulated stock the FTSE 250-listed outfit and has been engaging with its board in an attempt to improve its financial and operating performance.
Sparta, which was launched in 2021 by Franck Tuil, a longstanding executive at the prominent investor Elliott Management, is now understood to be a top ten shareholder in the footwear brand.
Dr Martens has seen its valuation slump amid supply chain bottlenecks and a slowdown in US sales leaving shares 40% lower in the last 12 months.
However, it is a brighter picture today and shares are 5.1% to the good at 153.60p.
Meanwhile, the FTSE 100 is steadily eating away atearlier losses, now down 7 points at 7,688.
9.25am: Energy producers higher as PM signals hundreds of new licences
Shares in North Sea energy producers are in the green in early trading in London, after PM, Rishi Sunak confirmed that hundreds of new oil and gas licences will be granted in the UK.
Number 10 said hundreds of new oil and gas licences will be granted off the coast of Scotland to "boost British energy independence" and "reduce reliance on hostile states".
Ministers expect the current 33rd round to award over 100 licences, starting in the autumn. The round was launched in October and in January it was confirmed that 115 bids had been received.
Centrica is up 1.7%, Ithaca Energy is 3.5% higher and Harbour Energy 2.2% to the good.
9.07am: Pearson shares fall back despite backing guidance
Pearson PLC (LSE:PSON) has backed full-year guidance after reporting a 5% jump in half-year sales and a hefty jump in operating profit to £219mln from £148mln.
Assessment & Qualifications sales were up 7% largely driven by a strong performance in Pearson Vue although Virtual Learning sales decreased 15%. Higher Education sales were down 2%, in line with expectations.
Andy Bird, chief executive, said: “Our excellent performance in the first half of 2023 means we are confident of achieving our full year expectations.”
Pearson said it was exploring opportunities in using AI to drive further efficiency and generate additional cost savings.
But shares which initially opened 3% higher fell back and are down down 0.8% at 862.40p.
8.41am: New BT boss the "continuity candidate"
The new chief executive at BT Group PLC (LSE:BT.A), Allison Kirkby, is the "continuity candidate," according to interactive investor's head of investment Victoria Scholar.
Scholar explained "having been a non-executive director of BT since 2019, Kirkby has benefitted from first hand insight into the business at board level and as the boss of Swedish telecoms giant Telia, she offers a wealth of experience in the sector."
"Kirkby is the continuity candidate, with plans to support BT’s existing strategy including cutting costs and its 5G and full fibre roll-out."
Other issues in Kirkby's inbox including dealing with French billionaire Patrick Drahi who has bumping up his stake in the telco.
"Investors will be hoping that Kirkby has steer BT’s shares in a more positive direction, having almost halved under Jansen’s watch since 2019," Scholar said although she noted "the lack of market reaction today from the stock suggests shareholders may need some convincing.”
BT shares were down 0.8% at 123.21p with the FTSE 100 now down 21.62 points at 7,672.65.
8.15am: FTSE lower and Marshalls tumbles after warning
The FTSE 100 edged lower in early exchanges with investors already eyeing Thursday’s interest rate decision in the UK.
The Bank of England is expected to raise interest rates by 25 basis points although a heftier increase of 50 basis point can't be ruled out.
At 8.15am, London’s blue-chip index was down 13.63 points at 7,680.64 while the FTSE 250 was little changed at 19,114.97.
In the FTSE 250, Marshalls PLC (LSE:MSLH) fell 9% to 251.70p after announcing plans to cut 250 jobs after warning performance in the second half will be below its previous expectations.
In a trading update for the six months to June 30, the building materials supplier said this reflected the sustained high levels of inflation, increasing interest rates and weak consumer confidence.
Peel Hunt plans to reduce its 2023 estimates by 24%, and 2024 by 25%. It has cut its price target to 310p from 380p but retained a buy rating.
It thinks “management is taking the right actions on the cost base.”
Back to the FTSE 100 and BT Group PLC (LSE:BT.A) shares were little changed after appointing Telia’s Allion Kirby as chief executive.
Kirby will succeed Philip Jansen who announced earlier this month he was stepping down.
Pearson was a star performer, rising 3.2% to 897.80p after reporting pre-tax profit in the six months ended June 30 rose to £236mln from £185mln a year earlier.
Looking ahead, the company said that it is confident in achieving 2023 expectations.
Chief Executive Andy Bird said: "Our excellent performance in the first half of 2023 means we are confident of achieving our full year expectations.”
“We have continued to execute well operationally and maintained a sharp focus on delivering efficiencies whilst positioning our portfolio for long-term growth."
7.52am: Marshalls axes 250 jobs as warns on profits
Marshalls PLC (LSE:MSLH) plans to cut 250 jobs after warning performance in the second half will be below its previous expectations.
In a trading update for the six months to June 30, the building materials supplier said this reflected the sustained high levels of inflation, increasing interest rates and weak consumer confidence.
Marahalls expects revenue for the six months period of £354mln, up 2% on last year’s £348mln, but down 13% on a like-for-like basis.
Adjusted pre-tax profit is expected to be around £33mln, down from £45mln last year.
The firm said the result have been delivered against the backdrop of challenging market conditions with persistent weakness in new build housing and private housing RMI, which are key end markets for the group.
Marshalls has closed its factory in Carluke, reduced shifts and capacity in other facilities, and a restructuring of its commercial team in efforts aimed at managing cash.
The measures are expected to save £9mln annually with around 40% of this benefit delivered in 2023.
The 250 job cuts are in addition to the 150 announced in the second half of 2022.
7.40am: Banks plan ad blitz to highlight financial support
Britain's biggest mortgage lenders will this week launch a £5mln advertising campaign to highlight support for cash-strapped customers.
The campaign, orchestrated by the industry lobbying group UK Finance, comes weeks after the signing of a mortgage charter by major lenders following talks with the chancellor, Jeremy Hunt.
The adverts will urger customers to ‘reach out’ if they are struggling meeting their monthly repayments.
7.23am: BT moves swiftly to name Allison Kirby as new CEO
News of a change at the top at BT Group PLC (LSE:BT.A) which has moved swiftly in appointing Allison Kirkby as chief executive who is taking over from Philip Jansen who announced he was stepping down last month.
Kirby, who has been president & CEO of Telia, the Swedish digital communications and telecommunications group, since early 2020, will assume the role by the end of January 2024 at the latest.
She moved into the TMT sector in 2010, initially joining Virgin Media, and was most recently president & CEO of TDC, the largest telecommunications company in Denmark.
She has been a non-executive director at BT Group since 2019.
Jansen will support the handover until the end of March 2024.
7.00am: Weak start expected in London
The FTSE 100 is expected to open lower on Monday after data from China showed the manufacturing sector continued to contract.
Spread betting companies are calling London’s lead index down by around 20 points after it closed up 1.51 points to 7,694.27 on Friday.
The official manufacturing purchasing managers' index – a key measure of factory output – came in at 49.3, below the 50-point mark that separates expansion and contraction, according to the National Bureau of Statistics.
But in an effort to boost the world’s second largest economy, Chinese authorities announced fresh measures to boost consumption, providing further support to markets.
In the US on Friday, markets advanced once more after Thursday’s blip as resilient data raised hopes of an economic soft landing.
Back in London, and the early focus will be an update from education publisher Pearson.