- FTSE 100 ends 22 points lower
- Housebuilders to be probed over underhand tactics
- Retail sector sales fall again, CBI finds
The FTSE has closed in the red, finishing down almost 22 points or 0.3% at 7,684.30.
Ocado was bottom of the list, down 6.5%, followed by St James's Place, both of which have results out this week.
Anglo American and Glencore were among the miners in the red, while distribution giant Bunzl fell after warning that growth this year would only recover slightly.
Builders Taylor Wimpey, Persimmon and Berkeley fell 2.9%, 1.9% and 0.7% respectively on the back of an announcement of a probe by the Competition & Markets Authority - though some analysts said they did not see much coming of it.
Top of the leaderboard was investor favourite Rolls Royce Holdings PLC, up 2.2%, followed by billionaire Bill Ackman's Pershing Square Holdings (LSE:PSH) Ltd, up 1.8%.
A small loss was also recorded by the mid-caps of the FTSE 250, which dropped 52.6 points to close down 0.3% at 19,126.92.
WAG Payment Solutions, Foresight Group and Quilter led the fallers. Top risers were Me Group International and Diversified Energy Company, the latter after it launched a stock tender programme.
3.40pm: Ocado leads FTSE fallers
London’s lead index has headed lower as it enters the final hour of trading on Monday, down 24 points at 7,682.
Ocado is leading the day’s losers as the stock slipped 6.3% following weekend reports that partner Marks & Spencer was withholding performance-linked payments from the delivery technology group.
As per The Times, M&S may forgo a payment of £190.7 million to Ocado after it missed performance targets last year, with the duo having originally agreed to such payouts through their 2019 tie-up on Ocado.com, where they each own 50%.
Ahead of Thursday’s upcoming results, analysts at Peel Hunt said Ocado needed to update its strategy, with the shares lower than where they were pre-Covid.
A change of name was also mooted to clear up the confusion with the M&S JV.
2.45pm: US stocks open slightly higher
The FTSE has pared its worst losses and is now down less than 0.1% at just below 7700.
Elsewhere, US stocks have opened slightly higher.
The S&P 500 is up 4 points or 0.1% at 5,093 and the Nasdaq 5 points higher at 16,002.
This follows what has been an astonishing rally, "almost unprecedented", according to strategists at Deutsche Bank, who said the rally has some vulnerabilities due to relying on a narrow number of stocks.
Since starting in late October, the rally last week saw the S&P 500 post its best performance in six weeks, reaching an all-time high, while other indices hit their own records, including Europe's STOXX 600 and Japan's Nikkei.
"This rally is now incredibly unusual by historical standards," said macro strategist Henry Allen, who noted that the S&P 500 has now advanced for 15 of the last 17 weeks – "that’s only happened one other time in the last 50 years, back in 1989".
And if the S&P 500 is positive again this week, that would make 16 out of 18 positive weeks.
Also if there’s a gain of at least 0.2% this week, that would be the first time the S&P 500 has managed that in history, he added.
But the current equity rally is "very narrow" by historical standards, continuing the theme from 2023 with the Magnificant 7 accounting for such a large proportion of the gains.
Inflation persistence "could be an issue for markets", Allen added, as it would mean central banks have to keep rates higher for longer, with surprising US CPI report for January leading to the S&P 500 falling 1.37% that day.
"So this is a theme that markets are still vulnerable to."
2pm: Chocolate inflation fears
The surging price of cocoa to new record highs could make prices of Easter eggs higher this year.
Cocoa futures were up 4.2% in London today to 5,572 pounds a metric ton, with prices having climbed 58% so far this year.
Drought and disease in key West African countries is the reason, with the poor crops expected in Ivory Coast and Ghana.
"The ongoing seasonal intense Harmattan winds in West Africa are exacerbating the bullish prices situation," the International Cocoa Organization said in a report.
Saxo Bank’s commodity strategist Ole Hansen said the shortages have “raised concerns about the availability of cocoa to meet already agreed sales obligations, potentially leaving some of the major chocolate producers shortchanged”.
1.30pm: Here’s an update on the top risers on the market today
The FTSE has pared some of its losses, though there are few big changes among the movers - but as usual there were some more dramatic moves among smaller fry.
Shares in Invinity Energy Systems PLC were blown 10% higher after the energy storage specialist announced said it had inked a manufacturing agreement with a Taiwanese partner for its vanadium flow battery, called Mistral.
Shares in Tristel PLC scrubbed up well after its TANK sporicidal disinfectant system received positive recommendations for both UK and EU medical device certification, which it expects before its June year end. The shares rose 8% higher.
Shares of Wincanton PLC chugged 11% higher amid what appears to be a bidding war for the logistics group.
EnSilica PLC (AIM:ENSI) shares ratcheted up by 30% following publication of the chipmaker’s interim results. Revenues came in 11.5% higher year on year at £9.6 million on a 43.9% gross margin.
Shares in Pensana PLC rose 12% after it announced significant progress in securing debt financing for its Longonjo rare earths project in Angola, revealing the negotiation of a non-binding term sheet with a consortium of lenders for $156 million.
Oriole Resources continued its recent upward march as it restarted exploration at the Mbe gold project in Cameroon. Shares were seen 5% higher.
12.40pm: FTSE lacklustre
As we come to lunchtime, the FTSE 100 is holding roughly the same level in the red that it has through most of the morning, down around 0.2%.
There's some new research on UK job vacancies that could add to pressure on the Bank of England for an earlier interest rate cut.
Job openings in January dropped below 900,000 for the first time since April 2021, a nearly 15% decline year-over-year, as high borrowing costs and recessionary pressures hinder hiring, according to Adzuna.
Companies' capability to hire workers can be squeezed by the combination of elevated interest rates and economic uncertainty.
“January 2024 has proven to be one of the most difficult starts to the year for job hunters in recent years with companies continuing to put hiring plans on ice," said Adzuna's Andrew Hunter.
“This will be disappointing for those hunting for work and only serves to drive up competition nationwide for available roles.”
12.10pm: Retail sector sales decline eases
Retail sales and inflation in the year to February fell at a modest pace following a sharp drop last month, according to the latest quarterly CBI Distributive Trades Survey, but are set to drop again next month.
This is the smallest year-on-year decline since the slide began ten months ago.
Sales in March are set to fall sharply again, the CBI said.
Selling price inflation this month eased to its lowest since May 2021, the report found.
Employment in the sector fell again in a run that stretches back six quarters, and firms said that they plan to reduce investment for the eighth consecutive quarterly survey.
11.35am: Red Sea ripples
More than half of UK businesses have been hit by delays or rising costs from disruption in the Red Sea, according to new research, following attacks on container ships heading along the major trade route towards the Suez Canal.
A survey of 1,000 businesses by the British Chambers of Commerce found 55% of exporters reported feeling the effects of the disruption, with 53% of manufacturers and consumer-facing service firms such as retailers too.
Increased costs are a major issue, with some businesses reporting rises of 300% for container hire, while delays of up to three to four weeks to deliveries are being seen.
Knock-on effects include companies feeling the pinch in their cashflow or seeing shortages of crucial components.
William Bain, head of trade policy at the BCC, said it could lead to a delayed bump to inflation.
"There has been spare capacity in the shipping freight industry to respond to the difficulties, which has bought us some time.
"And recent ONS data also indicates the impact has yet to filter through to the UK economy, with inflation holding steady in January.
“But our research suggests that the longer the current situation persists, the more likely it is that the cost pressures will start to build."
Meanwhile, the FTSE 100 is down 22.6 points or 0.29% at 7,683.63.
Ocado Group PLC (LSE:OCDO), which reports results on Thursday, is down more than 5%; Bunzl is down 4% after warning that sales will be sluggish; and blue-chip housebuilders Taylor Wimpey, Persimmon and Berkeley on the announcement of a CMA probe; along with a cabal of major miners.
The FTSE 250 is down 60.9 points or 0.32% at 19,118.65, with main fallers including builders Bellway and Vistry; retailer Watches of Switzerland and publisher Future.
Top risers are photo booth and self-service laundrette provider Me Group International, formerly known as Photo-Me, food supplier Bakkavor and hedge fund manager Man Group.
11am: Household costs higher for homeowners
Homeowners with mortgages have endured higher inflation than private renters lately, according to new official statistics.
Owner occupier households with mortgages had the highest annual inflation rate of 6.3% in the year to December, while the rate for those who own their own home outright was the lowest at 4.0% and for private renters was 4.9%.
This is according to the Office for National Statistics' quarterly household costs indices report, an experimental new set of data.
Overall UK household inflation was 5.0%, per the household costs index, down from 8.3% in September 2023 and 12.4% in December 2022.
For private renters and social renters, who faced similar inflation rates, bigger contributions to inflation were from food and non-alcoholic beverages, partially offsetting a bigger downward contribution from the fall in gas and electricity prices.
Non-retired households continued to experience a higher annual rate of inflation of 5.4% than retired households at 4.0%.
Annual rates for households with and without children fell to 5.5% for households with children and 4.8% for households without children in the year to December 2023.
10.50am: IAG and EasyJet high on FTSE leaderboards, Ryanair warning
Looking at the airline sector, Ryanair boss Michael O’Leary has warned of higher fares and possible flight cancellations due to delays in Boeing aircraft deliveries.
This stems from production issues and hold-ups that have led to Ryanair expecting to receive fewer aircraft than initially planned between October and December, with the US aircraft manufacturer having been in crisis mode since the Alaska Airlines mid-air blowout in January.
Loose bolts were subsequently found in other 737 Max 9 planes used by United Airlines, causing mass groundings and an FAA investigation.
O'Leary told reporters that "we don't really know how many aircraft we're going to get" from Boeing, but if it is "only get 40 by the end of March we will have to announce some minor schedule cuts".
The famously outspoken CEO said "there's a shitshow going on in Seattle. They keep giving us optimistic, broken promises. And then a week or two weeks later... it turns out that reality is worse."
Meanwhile, shares in British Airways owner IAG are among the top risers on the FTSE, up 1.6%, ahead of results later this week.
Full-year results on Thursday are expected to include a record €29.4 billion of sales and a record €3.5 billion underlying operating profit, topping a previous peak from 2018.
EasyJet PLC shares are also flying higher, up 2.2%. The budget airline is likely to rejoin the FTSE 100 in the upcoming quarterly review.
10.14am: Commodities prices drag
Several miners are among the bigger fallers this morning, including Rio Tinto and Anglo American down 2.5% and Fresnillo 2% lower.
These moves reflect declines in copper prices, which traders say is on the back of a rise in the US dollar and higher inventories in China.
Elsewhere in commodities, the oil price has faltered, with Brent crude down 0.5% to $81.2 a barrel.
"There are real concerns that higher-for-longer interest rates is going to become a reality, which could dent demand for the black stuff," said analyst Sophie Lund-Yates at HL.
"The demand outlook in major importer China also remains highly uncertain, which comes despite efforts from authorities to boost consumption."
9.32am: Housebuilders subside on CMA probe
The FTSE has tumbled back into the red, with miners and housebuilders weighing on the index.
Most of the big housebuilding companies have been named in a new investigation by the UK competition watchdog, which also published a report detailing its concerns about the sector and "significant intervention" needed.
The Competition & Markets Authority said it suspected that big housebuilders are sharing commercially sensitive information with their competitors, "which could be influencing the build-out of sites and the prices of new homes".
A new probe under the Competition Act 1998 has been launched into listed companies Barratt Developments PLC (LSE:BDEV), Bellway PLC (LSE:BWY), Berkeley Group Holdings PLC (LSE:BKG), Persimmon PLC (LSE:PSN), Redrow PLC (LSE:RDW), Taylor Wimpey PLC (LSE:TW.) and Vistry Group PLC (LSE:VTY), as well as privately owned Bloor Homes.
Also, following a year-long investigation into the sector, the CMA published a report identifying several factors that it believes have led to the "persistent under delivery of new homes", with several recommendations for national and local governments, including a streamlining of the planning process, reforms to estate management charges, and the formation of a New Homes Ombudsman with a unified consumer code.
The FTSE is not alone in the red this morning, with most of Europe's major indices also lower, apart from Germany's DAX.
Analysts at Saxo Bank say: "After last week’s Nvidia and AI bonanza it is worth reflecting this week whether equity markets are getting dangerously high.
"We are the most worried about US equities and investors should begin thinking about reducing equity exposure to technology stocks or outright reduce equity exposure while increasing diversification through bonds."
9.10am: FTSE breaks even
The FTSE 100 has recouped its early losses though again it is struggling to match the record-breaking performances seen on other markets last week.
Wall Street, Frankfurt and Paris have all hit new records recently while in Tokyo overnight the Nikkei was closing in on the landmark 40,000 level for the first time as its rally continued.
London’s blue-chip index is now up 2 points at 7,708 as it recovered from a nasty early surprise from Bunzl. The distribution giant is down more than 5% on a downbeat outlook statement with its annual results.
For 2024, the disposables specialist said it sees: “Underlying revenue, which is organic revenue adjusted for trading days, declining slightly".
Best of the early rises were Endeavour Mining, up 2.3%, and Standard Chartered, up 2.1%, following its surge on Friday after its results.
Elsewhere, one-time Footsie property group Hammerson has sold the Union Square shopping centre in Aberdeen for £111 million as its spate of disposals continues.
Hammerson said the sale marked the completion of a £500 million “non-core disposal programme” first outlined in early 2022.
This initiative was aimed at reducing balance sheet risk and debt. Shares rose 1.3% to 26p.
Ryanair meanwhile warned that delays to its expected Boeing deliveries might mean price hikes and flight cancellations.
"We don't really know how many aircraft we're going to get from Boeing," chief executive Michael O'Leary told the press.
"We're pretty sure we're going to get 30 to 40. We're reasonably confident we're between 40 and 45. And now we are far less confident we're going to get between 45 and 50."
Fares at the budget carrier could be up to 10% more expensive, he said.
"If we only get 40, by the end of March we will have to announce some minor schedule cuts," he added.
Ryanair is listed in Dublin now, but the comments lifted the share prices of all the London-listed carriers.
British Airways owner IAG was up 1.7%, easyJet 2.9% and Wizz Air 1.7%.
8:35am: Index opens lower, Bunzl bashed on revenue caution
FTSE 100 has steadied after the mild early fall, which was largely caused by distribution giant Bunzl's mixed outlook alongside its annual results.
Shares in the catering disposable specialist are down more than 5%, though British Airways owner IAG is doing its best to offset this drop..
The airline holding company is Footsie's best performer and up 3% ahead of its results this week.
Bookie Entain is also going well early doors.
Footsie down 6 at 7.699.
8.17am: Index opens lower, Bunzl sees revenues dropping
Bunzl has guided for lower revenue in the current year due to a slow start in North America.
Profit guidance for 2024 was maintained even though the FTSE 100 group said it expects this year's revenue increase to be ‘slight’.
For the year, the disposables specialist said it sees: “Underlying revenue, which is organic revenue adjusted for trading days, declining slightly.
"Group operating margin is now expected to be slightly below 2023,” said the statement.
Index to open lower, Oil price weak, Berkshire posts record profits
Blue chips in London were tipped to open modestly lower despite last week's records in Europe, Japan and on Wall Street.
Footsie was being called around fifteen points lower after mixed trading on Asia overnight.
Japan was an exception as it continued to hit new highs with the NIkkei in sight of 40,000 for the first time heading towards the close.
Oil prices were also lower on Monday as the dollar rose on growing speculation that higher-than-expected inflation could delay cuts to US interest rates.
Over the weekend Warren Buffett’s Berkshire Hathaway produced record profits but the legendary investor suggested the days of bumper returns from his financial vehicle might be passed.
This morning, FTSE 100 group Bunzl reported adjusted profits up 3% at £853 million.