- FTSE 100 closes 22 points higher
- Rolls Royce around 9% higher; dividend return targeted
- Beazley tops FTSE 100 leaderboard
The FTSE 100 finished up just under 22 points higher at 7,684.49, a gain of 0.29%.
Its mid-cap sibling the FTSE 250 ended up at 144.5 points to the good, up 0.76% at 19,263.50.
16:05pm: FTSE 100 to close 22 points higher, lifted by rallies from Rolls Royce and Beazley
UK's blue chips are set to close around 22 points higher, with Beazley and Rolls Royce having led the charge for much of the day.
Beazley lifted around 9% after its fairly innocuous trading update revealed shareholders would be set to receive an extra £300 million in shareholder returns.
Rolls Royce also rallied around 9% after it reported strong profits after a turnaround year, with investors well positioned to start receiving dividends if all goes well.
Lloyds slowly crept its way up through the risers today, looking to finish the day 6% higher, after the group's results were found to have more positives than first expected.
These included capital returns, where a final dividend of 1.84p per share and a buyback of up to £2 billion meant £3.8 billion of returns have been declared for 2023, equivalent to 14% of the bank's market cap.
However as a motor finance probe by the FCA looms, with the bank having already set aside £450 million in preparation, analysts were aware how it could cause problems in the future.
"Lloyds is thought to have the largest exposure across UK peers and could present a challenge in RoTE targets moving forward," Max Georgiou, analyst at Third Bridge explained.
WPP was the lead faller after its shares dropped more than 5%, as its results failed to instil investors with confidence about the struggling advertising market.
Mark Crouch, market analyst at eToro, said: “Advertising is typically first on the chopping block in times of economic uncertainty and with inflationary pressures hampering businesses across the globe in recent times, this has translated into an underwhelming set of results for WPP."
15:45pm: Rolls Royce to bring back the dividend, analysts reckon
The FTSE 100 is holding steady at around an 22-point increase, but Rolls Royce has shifted back slightly from its afternoon gains with the aerospace company up around 8%.
Nevertheless, boss Tufan Erginbilgic has well and truly delivered on his promise to turn the company around, in the view of analysts at least.
Following the company’s report of better-than-expected £1.6 billion full-year profit, eToro’s Adam Vettese said it may well not be long before the engine maker fires up its dividend payments once more.
“We are seeing no let-up in demand in civil aviation as well as defence spending,” he said, “both areas in which Rolls-Royce has a strong foothold”.
Commenting on Rolls-Royce’s guidance, he added: “If this comes to fruition, then it won't be long before the dividend is back also.”
Meanwhile, UBS analysts reiterated backing for Rolls-Royce following the update.
Noting earnings beat expectations across all of the company’s divisions, the bank repeated a share price target of 400p - up around 20% on the week's average.
15:26pm: Anyone for Pimm's?
Pimm's, the classic English summer drink, has been put up for sale by its owner Diageo, along with two other brands.
The FTSE 100 drinks giant has hired bankers at Rothschild to explore the sale, with Diageo having owned the gin-based fruity liqueur since its inception back in 1997.
Despite the sales process being launched, insiders note that it's still at a preliminary stage and a sale isn't necessarily certain.
Diageo is also considering the sale of Safari, a fruit liqueur, and its rum brand Pampero.
15:13pm: WPP leads FTSE 100 fallers
As the FTSE 100 struggles to rise above the 7,690 mark, 9% gains from Rolls Royce and Beazley are being offset by falls from WPP (-5%), Tesco (-3%) and Endeavour (-2.5%).
WPP, the advertising agency, has lost close to 30% of its market value in the last twelve months as it continues to suffer from a weak market.
Mark Crouch, market analyst at eToro, said: “Advertising is typically first on the chopping block in times of economic uncertainty and with inflationary pressures hampering businesses across the globe in recent times, this has translated into an underwhelming set of results for WPP.
“Shareholders will likely still be reeling from the two profit warnings issued by the company in 2023 and would have been eager to see what the business plans to do in order to turn their fortunes around and pull the advertising agency out of this current rut.
"While the company remains optimistic they can deliver accelerated and increasingly profitable growth over the medium term, it’s fair to assume market conditions will need to improve quickly in order for that to happen.”
Net new business dropped 24% lower year-on-year and reported pre-tax profit fell 70% to $346 million due to accelerated amortisation of previously indefinite life brands and impairment of leases related to a property review.
Underlying operating profit rose 0.5% to £1.8 billion, held back by a 13% increase in IT costs reflecting investment in technology including AI capabilities, linked to the £250 million AI plan announced at its Capital Markets Day in January.
14:43pm: Wall Street rockets as Nvidia trailblazes
Wall Street has rocketed on its opening, with tech-darling Nvidia doing much of the legwork, pushing 13% higher.
The Dow Jones is up over 255 points at around 38,850, while the S&P has flown 60 points higher to around 5,040.
"Nvidia is almost defying the laws of financial markets," said Peter Garnry, the head of equity strategy at Saxo.
"We have never seen anything like this before in the equity market in terms of 265% YoY revenue growth rate for a company expected to report around $100bn in revenue over the next four quarters. It should almost not be possible."
It's not just Nvidia reaping the rewards either, rival chipmakers like Arm and Advanced Micro Device are up 12% and and 7%, respectively.
Top fallers in the US on Wednesday include Etsy, down 8%, after it missed its quarterly earnings guidance and warned the start of 2024 would be slow.
14:26pm: FTSE 250 soars as Invidior mulls ditching London
While the FTSE 100 lingers around the 7,680 mark on Thursday, its little brother, the FTSE 250 has been soaring, up around 180 points.
Much of the gains are coming from Invidior (+17%), the drug maker, after it revealed plans to shift its primary listing over to the US.
Known for its opioid use disorder and schizophrenia treatments, the Virginia-based group said the listing shift could occur in the summer of 2024, pending shareholder approval.
Indivior, which generates most of its sales from the US, was spun out from Reckitt Benckiser back in 2014.
Should shareholders back the move, it will join a growing exodus from the London market, which has been hit by a post-Brexit downturn in liquidity and lacklustre valuations for those businesses quoted on the LSE.
Shareholders of TUI, the travel group, last week voted to cancel its London listing in favour of Frankfurt, while Flutter, the company behind Paddy Power, recently pressed 'go' on a New York quote.
Before that, mining giant BHP, building materials group CRH, packaging group Smurfit Kappa and builders' merchant Ferguson turned their back on the FTSE 100 for primary listings in Australia or the US.
14.16pm: Turkey keeps interest rates at 45%
Turkey has left its interest rates at 45%, one of the highest in the world, bringing a halt to a series of aggressive hikes aimed at curbing inflation.
Since June, the country's central bank has lifted from 8.5% to the second highest in the G20.
It keeps in line with the bank's plan after last month it revealed the aim of establishing "the disinflation course" had been met.
14:03pm: UK fish supply at risk as Russia scrap agreement
While investors look to benefit from both Nvidia and Rolls Royce rallying, it's been a tough day for fish and chip shops across the UK.
Earlier today, it was revealed potato prices had soared above 20% over the last month after farmers suffered from poor yields due wet weather and supply issues stemming from a drought in summer 2022.
Now, fish could be at risk as well after Russia exited a long-standing deal with the UK.
An agreement has been in place since the mid-50s allowing British vessels to fish in the Barents Sea, the body of water located above Finland and to the northeast of Russia.
However, Moscow has decided to end this agreement, with Russian politicians now claiming it was never in the national interest of the country.
Russia's parliamentary speaker Vyacheslav Volodin said: "The British need to study some proverbs - 'Russians harness the horse slowly, but ride it fast'."
"Now let them lose weight, get smarter."
A UK government spokesperson said it "would have no material impact on fish supplies", but according to reports, around 40% of cod and haddock consumed in Britain is sourced from Russia or Russian territory.
13:46pm: FTSE 100 tries to break higher
The FTSE 100 is attempting to push higher after lunch, up around 15 points, having been flat for most of the morning.
Rolls Royce shares continue to rally around 11% after boss Erginbilgiç began the second phase of his tenure with a "good start".
“From burning platform to booming platform. After a year of convincing the market of the merits of his turnaround plan and using colourful words to describe Rolls-Royce’s predicament, 2024 was time for Tufan Erginbilgiç to start delivering. Its latest full-year results represent a good start," Russ Mould at AJ Bell said.
“Elsewhere, the company’s defence business is benefiting from an improved outlook as countries prioritise military spending thanks to heightened global tensions.
“Combine this with the efficiencies Erginbilgiç is making and you have a powerful driver which helps underpin the robust guidance the company is giving for this year.”
Insurance firm Beazley is also up around 9% after promising extra cash returns for its shareholders.
In a very short trading update (alongside confirmation of its results publication date), the Lloyds insurer said claims were better than expected last year.
Shares in the insurance and reinsurance group jumped over 8% as Beazley said it now plans an additional capital return of "around £300 million" as well as its ordinary dividend.
WPP (-3%), Tesco (-2.5%) and AstraZeneca (-2.5%) are the largest fallers on Thursday.
12.55pm: Wall Street to open higher as Nvidia targets market record
Wall Street is set to open higher after Nvidia once again beat analyst expectations during its quarterly update, with the Dow Jones positioned to open 173 points higher at around 38,750.
Nvidia surged 13% in pre-market trading and is expected to beat Meta's record session, just three weeks after the social media company set it.
Reports predict that the AI chipmaker will add around US$250 billion to its market capitalisation, marking the single-session rise in history.
It comes less than a month after the Facebook owner set the record with a US$197 billion gain.
Morgan Stanley (NYSE:MS) analyst Joseph Moore said: “We had never seen $2 billion+ of upside to quarterly revenue guidance until Nvidia did it a few quarters ago, but it has become routine during the AI surge.
"[The] strength of AI demand continues to be remarkable.”
Nvidia generated revenues of $22.1 billion during the quarter compared to Wall Street analyst expectations of $20.3 billion.
This represented a 265% year-over-year increase and was a quarterly revenue record.
12:36pm: HSBC joins in on raising mortgage rates
HSBC has responded to Wednesday's sharp share price drop and "messy" results by announcing that mortgage rates will be repriced higher, starting tomorrow.
The exact amount rates will increase is yet to be confirmed, but reports indicate it will relate to new and current residential customers who are on loan-to-value and fixed-term schemes.
It comes as swap rates, which influence how much lenders spend to provide mortgages, continue to rise, with analysts arguing the markets may have gotten carried away with the chance of an early interest rate cut.
Michelle Lawson, director at Lawson Financial, said: "Another one bites the dust. We have returned to uncertain times in the mortgage and property market. Hopefully things will settle down soon as the property industry is such a trigger for so many others. The yo-yoing is no good for anyone."
Shares in HSBC are trading flat, having failed to recoup any of the losses suffered on Wednesday.
12:20pm: Anglo American shares jump on new Brazilian mega-mine launch
Anglo American is recovering some of the losses it suffered earlier this week after its shares jumped around 6% after unveiling a new Brazilian mega-mine.
The mining giant has agreed with Brazilian metals group Vale to merge two of their monster-sized assets in Brazil into one giant iron ore mine.
Through the deal, Vale will transfer its Serpentina operation and integrate it with Minas-Rio next door.
Serpentina already has a resource of 4.3 billion tonnes of iron with a strike or mineralisation length twice that of Anglo’s Minas-Rio site.
The share price spike comes despite Anglo American announcing underlying profits dropped by 31% in 2023 to US$10bn.
Revenues were also down, falling by 13% to US$30.6 billion while the dividend for the year was cut by 52% to 96c.
12:00pm: Energy prices to drop by 15% under new price cap, analysts predict
Energy prices are expected to fall by as much as 15% from April thanks to a consistent drop in wholesale costs, with regulator Ofgem to confirm the figure on Friday.
In its latest decision, Cornwall Insight analysts expect the regulator to reduce the energy price cap from £1,928 currently to £1,635 from April 1.
This cap effectively determines bills by limiting what suppliers can charge and represents the amount a typical household would pay over a year on such rates.
Though the new cap is indeed set to fall drastically, at £1,635 it would remain around £400 higher than in early 2019, reflecting still historically high prices.
11:51am: ScottishPower sees profits rocket thanks to energy price cap
ScottishPower saw its profits rocket, despite the number of its customers falling, with the company having instead taken advantage of the price cap mechanism.
Iberdrola, the group's Spanish owner, said operating profit at the Scottish energy group lifted from a loss of £273 million in 2022 to £545 million last year.
The strong turnaround came in the first half of 2023 when Ofgem provided suppliers with the chance to recoup the increased costs of energy through the price cap scheme.
It was the same reason why energy companies like British Gas also saw profits soar.
In the second half, ScottishPower suffered a multi-million-pound loss, with the number of customers having dropped from 4.6 million in September to 4.5 million in February 2024.
Shares in Iberdrola fell around 1% on Thursday.
11:27am: FTSE 100 picks up momentum as PMI data provides confidence
The FTSE 100 is climbing higher, up around 20 points, after flash PMI figures filled investors with fresh optimism that the UK may be exiting its recession.
Martin Beck, the chief economic advisor at EY ITEM Club, said: "February's PMIs reinforce [our] view that the economy's contraction in the second half of last year should prove short-lived.
"The activity surveys point to GDP returning to growth in the current quarter, albeit with the pace of expansion in Q1 held back by the effects of public sector strikes. Over the course of this year, the EY ITEM Club expects lower inflation to support real incomes and drive a recovery in activity."
Strong jumps from Rolls Royce and Beazley, both up around 9%, are helping offset falls from WPP (-4%) and AstraZeneca (-2%).
The FTSE 250 soared by around 125 points to around 19,244 as news that Indivior is considering shifting its listing to the US helped the stock rally 17% higher.
The pharmaceutical company, known for making opioid dependence treatments, said it will begin speaking with shareholders to discuss whether it should move its primary listing over to Wall Street.
Indivior's gains are helping offset falls from Hargreaves Lansdown after its shares sunk 7.5%.
The financial services firm said new business had dropped around 38% to £1 billion, while pre-tax profits tumbled 8% to £183 million.
10:51am: Potato prices soar as wet weather causes supply issues
Potato prices soared more than 20% in the last month, as farmers continue to battle with poor weather conditions.
Sainsbury's British Maris Piper Potatoes (2kg) jumped by 22.2% month-on-month in February from £1.35 to £1.65, while the same item at Tesco saw a 21.3% increase.
Wet weather was the leading cause for the disruption, however, Tim Rooke, the NFU potato and policy chair, believes the problems truly began in the summer of 2022 when a drought caused supply issues.
Speaking on the fall in the number of potatoes in storage, he said: “The crop we are using at the moment potentially has to go maybe two months longer.
“I think there could potentially be a shortage by the end of the season."
10:39am Bank of England policymaker needs more evidence before rate cut
Bank of England policymaker and economist Megan Greene believes more evidence is required before she votes to cut rates.
Greene wants to see clearer proof that inflation pressures are easing, having only decided to drop the call to raise rates at the start of February.
"Markets are pressuring every central bank to cut rates. I would need to wait to see more evidence that inflation wasn't as entrenched as we may fear before I would be willing to vote (for a cut)," she said.
The comments echo those made by Bank of England governor Andrew Bailey, who defended the decision to hold rates, arguing that price inflation in the service industry and high wage growth were still affecting total inflation figures.
10.11am: Inflation fears creep in after latest flash PMI data
The FTSE 100 lifted out of the red to rise 5 points after the latest round of flash PMI data.
Inflation pressures "remained high" in February, according to the data, extinguishing hopes of an early rate cut.
Input price inflation rose to its highest level since August last year after the service industry experienced a wave of salary increases.
Chris Williamson, S&P Global's chief business economist, said the acceleration in services inflation was "stubbornly elevated thanks to higher wage costs and the pass-through of some higher goods prices”.
Meanwhile, manufacturers only experienced a slight rise in their input prices, showing resilience against the negative impacts on supply chains and shipping costs caused by the Houthi attacks in the Red Sea.
Supplier lead times increased by the greatest amount since July 2022.
Williamson added: "The resulting increased cost of shipping contributed to the largest monthly rise in selling prices for goods seen over the past nine months.
"With growth accelerating and prices on the rise again, February’s data mean policymakers are increasingly likely to err on the side of caution when considering the appropriateness of cutting interest rates."
9:46am: Hays to cut more jobs as recruitment industry weakens
Hays, the recruitment firm, has warned that more job cuts will take place in 2024 after it suffered a 70% drop in profits during the first half.
A weakened hiring market across the globe led to the company cutting around 9% of its workforce, with the number of consultants employed dropping by 12% to less than 8,000.
Job cuts in the first quarter of the 2024 calendar year are expected to see the Hays workforce shrink by an additional 3% to 4% as the recruiter aims to shed £20 million in costs during the first half.
It comes after management made around £30 million in annual cost savings during the last six months of 2023.
However, the cost-cutting wasn't able to stop profits from slipping by 71% to £27.6 million in the same period.
Shares in Hays are trading flat at around 95p on Thursday.
9:34am: Japanese market closes on all-time high
Across continents and in the east, Japanese investors saw the main stock index close at an all-time high, surpassing the record set back in 1989.
The Nikkei 225, which includes companies like Sony, Mitsubishi, Nintendo and SoftBank, closed trading on Thursday around 2% higher at 39,098.68.
It beats a nearly 35-year-long record, with the index last reaching 38,915.87 back in December 1989.
One key driver of the surge was Nvidia's earnings beat, providing positive read across for Japanese electrical and semiconductor manufacturers.
At the close, all three top risers, Screen Holdings (+10%), Advantest (NYSE:ATE) (+7.5%) and Tokyo Electron (+6%), were all semiconductor companies.
9:22am: FTSE 100 down despite strong Rolls results
Proactive's Stephen Gunnion discusses all the big movements on the FTSE 100 Thursday morning, including Rolls-Royce, Lloyds and Hargreaves Lansdown.
8:59am: FSTE 100 loses gains despite US tech stocks rally
The FTSE's early gains have petered out slightly, with the index now just 10.5 points higher at just over 7673.
Without a large mass of tech stocks, London's benchmark is not getting much of a boost from the blowout earnings performance from NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) last night, with shares in the chipmaker set to jump another 9% according to aftermarket trading.
Other chip makers also experienced a lift, including the UK's Arm Holdings PLC (NASDAQ:ARM), which is set to gain around 8% today, and AMD around 4%.
In the Square Mile, there is also a break being put on the main index by AstraZeneca falling 1.8%, which is due to the drugmaker's stock trading ex-dividend.
WPP PLC (LSE:WPP) is down despite full-year results being largely in line with expectations, though lower technology spending in the final quarter in the US acted as a drag. Net new business was lower but underlying operating profit rose 0.5% to £1.8 billion.
“Advertising is typically first on the chopping block in times of economic uncertainty and with inflationary pressures hampering businesses across the globe in recent times, this has translated into an underwhelming set of results for WPP," said Mark Crouch, market analyst at eToro.
Other losers include Lloyds and Land Securites and Whitbread.
Names driving FTSE 100 gains include Anglo American PLC, which rose 4% despite a 94% plunge in profits, with the miner saying it will review its assets.
The FTSE 250 index is also in the green this morning, up 0.4% to 19,188.40, led by strong gains for Indivior PLC (LSE:INDV) on the back of its final results.
A big faller is Hargreaves Lansdown PLC (LSE:HL.), down 8.5% to 736.10p after reporting a sharp decline in its net new business.
8.22am: Rolls and Beazley lead FTSE higher
The FTSE 100 has got off to a good start, as expected, led by strong gains for Rolls-Royce and Hikma Pharmaceuticals.
In early trading, the index was up 27 points or 0.36% to 7690.18.
Rolls was near the top of the Thursday morning leaderboard, with its shares up over 7% after results for last year showed profits more than doubled, with guidance given for further growth this year.
"Rolls Royce’s full-year results capped off a stellar year for the FTSE 100’s top performer of 2023. Underlying operating profit and free cash flow came in well ahead of prior guidance, helping to fuel positive sentiment around this engine-maker," said analyst Aarin Chiekrie at Hargreaves Lansdown.
Rolls share gains were topped by insurer Beazley PLC, which has jumped over 8% after putting out a short statement saying that claims were better than expected last year, and it plans an additional capital return of "£300 million" as well as its ordinary dividend.
Generic drug-maker Hikma shares are up 5.6% after it reported stronger underlying profit of $707 million on the back of double-digit revenue growth across all businesses, with confidence expressed by management about continued growth in 2024.
Lloyds is down 1.6% after its own full-year results, despite the dividend boost and £2 million buyback announcement.
After the bank took an initial provision of £450 million in respect of the FCA’s review into historical motor finance commissions, analyst Gary Greenwood at Shore Capital said he thinks the cost could eventually exceed £1 billion, but profits were boosted by a bad debt write back in relation to the Telegraph, where a large loan was paid back.
7.58am: Rolls rolling in profits again
Rolls-Royce Holdings PLC (LSE:RR.) reported 143% growth in underlying profits for last year, higher than expected as it cut costs and demand for its aircraft engines recovered from the pandemic lull.
The FTSE 100 group expects demand to continue to grow this year, with further efficiencies from chief executive Tufan Erginbilgic's transformation plan.
Underlying operating profit came in at £1.6 billion for 2023, up £0.9 billion on the previous year as revenue grew 21% to £15.4 billion. Free cash flow more than doubled to £1.3 billion.
For 2024, guidance is for underlying operating profit of between £1.7 billion and £2 billion, with free cash flow of between £1.7 billion and £1.9 billion.
7.38am: Lloyds delivers bumper returns
Lloyds Banking Group PLC (LSE:LLOY) has promised investors a 15% dividend hike and a share buyback of up to £2 billion despite profits being crimped by a drop in the final quarter of last year.
The UK’s largest lender reported underlying pre-tax profits of £1.75 billion for the final quarter of the year, down 14% from the third quarter but in line with City estimates.
It made a £450 million provision to cover the potential costs of a probe recently announced by the Financial Conduct Authority into motor finance commissions, but profits in the quarter were actually boosted by a £541 million credit relating to a significant write-back following the full repayment of debt from a single name client.
Excluding this, underlying profits for the quarter came in at £1.2 billion, down 45% on the third quarter.
For the full year, profits came in at £7.8 billion, up 11% on the previous year and matching analyst expectations as the lender enjoyed the benefits of higher Bank of England interest rates.
7.17am: FTSE 100 tipped to rebound after NVIDIA boost
The FTSE 100 is being tipped to bounce back on Thursday morning after its biggest fall in a week and a half, helped by an upturn on Wall Street overnight.
London's blue-chip benchmark dropped 56.7 points yesterday, or 0.73%, to close at 7,662.51, it second down day in a row after five positive sessions.
Spread betting platforms are anticipating a rise of around 35 points for the FTSE this morning.
Overnight, the S&P 500 and Dow Jones both clambered out of the red just before the closing bell, both up 0.13%, while the tech-powered Nasday was unable to get its head back above water, finishing 0.32% lower.
In Asia, Japan's Nikkei 225 has set a new all-time closing high, beating a record set 34 years ago, with tech stocks leading the way after a boost from NVIDIA Inc earnings after the New York closing bell.
The much-anticipated results from the chipmaker saw another massive beat on earnings as revenue also came in higher than expected, with its data centre business the catalyst with a 400% leap in sales.
"Nvidia reasserted its place in the Magnificent 7 with another blowout quarter showing that AI use cases are exploding, and the AI boom is showing no signs of slowing down," said eToro analyst Josh Gilbert.
Today in London, Lloyds Banking Group PLC (LSE:LLOY) and Rolls-Royce Holdings PLC (LSE:RR.) are the big names, two of the most popular stocks for private investors.
A quick look at results shows Lloyds made a £450 million provision to cover the potential costs of a motor finance probe, and though underlying pre-tax profits slipped to £1.7 billion in the fourth quarter, this was in line with City forecasts.
Rolls-Royce meanwhile reported annual profits more than doubling, beating consensus forecasts.