- FTSE 100 closes just below flat
- Bitcoin jumps to two-year high
- Currys rejects second bid
The FTSE 100 has finished a sliver below where it started on Tuesday, losing 1.28 points to close at 7,683.02.
Tobacco group Imperial Brands was the biggest blue-chip faller, hit by reports about a potential UK vape tax.
Not far behind was chemicals group Croda on the back of disappointing results.
Mid-cap sibling, the FTSE 250, closed a tad higher, led by Close Brothers as it bounces back from scrapping its dividend earlier this month due to the launch of a FCA investigation into the motor finance lending sector.
4.08pm: Abrdn unable to hold onto gains
Abrdn PLC (LSE:ABDN) shares have swung from a 7% gain earlier to a 4% decline after reporting full-year results this morning.
The fund manager and investment platform group confirmed that 500 roles are set to be cut following a tough year for the sector on a wider downturn in market activity.
Headwinds are due to remain, Abrdn warned in its results, including a shift from the actively managed funds in which it specialised to more passive funds like ETFs.
“We think the only clear investment case for owning the stock today, would be if one were to assume that the status quo could meaningfully change and more radical action, such as a breakup of the group, were to happen,” said Deutsche Numis analyst David McCann in a note to clients.
Analysts at Panmure Gordon said the business case for Abrdn's structure was unclear, but that the shares had upside potential, sitting at half their pre-Covid level.
"Perhaps the most important change we have seen is in a considerably less hubristic assessment of performance and prospects," Panmure said in a note.
Abrdn boss Stephen Bird said he did not favour a break-up of the company.
He told reporters that the board hasn’t discussed a break-up.
"We haven’t had any approach and there are no activist shareholders. People like to whip up stories, but we do have very valuable parts in this business. We like the way they work together," he said.
3.41pm: US Markets face mixed start as Bitcoin skyrockets
The Dow Jones saw red as the markets opened on Tuesday, with the Nasdaq and S&P 500 marking muted gains as Bitcoin soared to a two-year high.
Some 188 points were wiped off the Dow Jones after the opening bell, seeing it stoop to 38,951. The Nasdaq and S&P 500 added 41 and just 2 points respectively, to reach 16,018 and 5,072.
Bitcoin, meanwhile, soared 5% to US$57,218 on Tuesday, having hit a two-year high earlier in the day and adding 10% in the past two sessions alone.
The recent approval of spot Bitcoin exchange-traded funds (ETFs) and purchases by large investors have fuelled the cryptocurrency’s latest gains, while the market also awaits the next halving in April.
MicroStrategy unveiled a US$155 million purchase of around 3,000 coins on Monday.
Reddit, which is gearing up for a New York listing, also recently disclosed investments in the cryptocurrency.
This follows approval of the spot Bitcoin funds in January, which Justin d'Anethan, partnership head at digital asset market maker Keyrock, said had subsequently prompted “relentless” demand.
April’s halving marks the most recent move to limit supply of the digital assets by slashing the reward for producing them by 50%, meanwhile.
Among equities, Coinbase Global Inc (NASDAQ:COIN) (Coinbase Global Inc (NASDAQ:COIN)) jumped over 5% on the back of the strong gains by Bitcoin.
Elsewhere, Viking Therapeutics (NASDAQ:VKTX) (Viking Therapeutics (NASDAQ:VKTX)) soared 75% after announcing strong results from its latest trial of weight loss drug VK2735.
Zoom Video Communications Inc (NASDAQ:ZM) (Zoom Video Communications Inc (NASDAQ:ZM)) gained as the market reacted to Monday evening’s results, which included larger-than-anticipated profit guidance.
And finally, Workday Inc (NASDAQ:WDAY) (Workday Inc (NASDAQ:WDAY)) and Unity Software Inc (NYSE:U) (Unity Software Inc (NYSE:U)) fell after each disappointed with their respective guidance, also unveiled in results on Monday night.
2.05pm: Currys rejects second bid
Currys PLC (LSE:CURY) has rejected another bid from US investor Elliott Advisers.
The electrical goods chain confirmed it has received a further preliminary and conditional proposal about a possible cash offer at 67p per share, upped from the initial proposal at 62p.
Having unanimously rejected the first bid, the Currys board said it has done the same with the second, having concluded that "it significantly undervalued the company and its future prospects".
Shares in Currys are up 1% at 67.4p.
Elsewhere, Barclays PLC (LSE:BARC) is up 0.6% after offloading roughly $1.1 billion of US credit card debt to Blackstone.
This is designed to free up capacity to expand lending and reduce balance sheet risk, the bank said, reflecting its recently-announced strategy to prioritise consumer lending.
Further afield, Nigeria's central bank has unleashed a 400 basis point interest rate hike to its to help its battered currency, lifting its main policy rate to 22.75% in its first meeting since last July.
1.46pm: Red Sea disruption set to last
Shipping colossus Maersk said disruptions in the Red Sea could last into the second half of the year, and warned customers to expect supply chain delays.
Following attacks on container ships in the Red Sea, heading for the Suez Canal, shipping companies are now taking to longer way around the bottom of Africa.
"Know your best alternative to entering the North American market and be ready to have mitigations in place," Maersk said in a statement.
It told customers they should start "preparing to mitigate shifts in your supply chain costs".
Macro strategist Elwin de Groot at Rabobank has got his calculator out and worked out that this is likely to fuel inflation in Europe to a noticeable degree.
"If sustained, higher logistics costs could still materially affect inflation in the Eurozone," he said, with the UK likely to be affected too.
1pm: Wall Street rebound eyed
US stocks are expected to rebound today, following small losses at the start of the week.
A batch load of macroeconomic data is coming out to provide potential fuel for the fire, namely durable goods orders, Case-Shiller house prices, consumer confidence and inflation expectations.
Ahead of the open, futures markets were pointing to a 0.3% gain for the Nasdaq, 0.2% for the S&P 500 and less than 0.1% for the Dow Jones.
12.15pm: Up and down morning for markets
The FTSE 100 has had an up-and-down morning, though fluctuations have all been fairly small beer.
For the first half of the morning it was mostly above water, but right now the index is down 5.5 points at just under 7,678.
Smith & Nephew has not been able to hold onto its early gains but is still up 1%, while the leaderboard is being topped by Anglo American (LSE:AAL) and Burberry (LSE:BRBY), two names with an angle on the China story after Beijing moved to prop up economic and currency support earlier.
Fallers are now led by big tobacco company Imperial Brands (LSE:IMB) on the reports that a vape tax could be introduced.
Chemicals group Croda (LSE:CRDA) is down after profits were hit by customer de-stocking.
Unilever PLC (LSE:ULVR) is among the bigger fallers too, having been downgraded by Morgan StanIey due to various concerns.
The FTSE 250, meanwhile, has broken above the surface, up 8 points at 19,134.
Racing to the top of the mid-cap risers is Aston Martin (LSE:AML), ahead of results due later this week that are expected to be strong.
11.30am: Tell Sid about savings
Banking shares are little moved as the City watchdog has launched a media campaign to encourage the public to shop around for better savings rates.
Backed by promotions online, on podcasts and radio, the Financial Conduct Authority (FCA) will promote a website where savers can calculate how much they could earn in higher paying savings accounts.
Research by the FCA has revealed just over half of savers (52%) had already switched or were considering switching their savings accounts to take advantage of better interest rates.
Over two-thirds (69%) of those surveyed said they would consider switching.
FCA consumers and competition chief Sheldon Mills said: “We know that people can be put off switching for a variety of reasons, but they could be making their money work harder.
"There are some great rates out there and it could take as little as 5 minutes to find a better deal.”
The FCA said there was a £13 billion reduction in the amount of cash held in bank and building society non-interest-bearing accounts in the second half of last year, while easy-access accounts, which typically have lower interest rates, saw a £9 billion fall.
Deposits held in fixed-term and notice accounts, which often come with higher rates of interest, increased by £24 billion.
10.40am: Insurers in the red
Insurance companies are all in the red after the industry set out plans to reduce motor insurance premiums after they raised them 25% in 2023.
The Association of British Insurers has published a 10-point plan as it kicked off its annual conference, encompassing actions by industry, government and regulators, including enhancing consumer data access, implementing graduated drivers licensing, and reducing insurance premium taxes.
Insurers say the price rises have been driven by inflation in the cost of claims, with estimates from EY that in 2022 for every £1 paid in premiums, insurers incurred £1.11 in claims and expenses, rising to £1.14 in 2023.
Discussions are being held about premium finance with the FCA, which has launched an investigation, and the ABI said the industry is also considering how it can work with finance houses and brokers that are not members.
10.14am: Shrugs all around the FTSE
Oil prices are little moved by reports of a potential Gaza ceasefire
Brent crude is in fact up 0.2% at $82.66, while oil giants Shell and BP are both up around 0.1%.
Market analyst Susannah Streeter at Hargreaves Lansdown said disruption to shipping in the Red Sea is keeping "supply concerns bubbling".
She added: "There are some hopes that a temporary ceasefire in Gaza could be reached soon, with President Joe Biden confirming that Israel has agreed to halt attacks during Ramadan, although Hamas is still assessing the draft proposals."
10.05am: Vape tax
Share in cigarette giants BAT are shrugging off talk of a possible new UK vaping tax, though sector peer Imperial Brands is down.
There are reports that Chancellor Jeremy Hunt could announce a new tax on vapes at next Wednesday's spring Budget.
Vaping products are subject to VAT but not the same levy as is applied to cigarettes.
Tobacco duty could also increase at the Budget, to ensure that vaping remains cheaper, sources told the Times.
Last month, plans were announced for UK-wide restrictions on disposable vapes, to tackle the rise in youth vaping.
"Although the industry is jostling for position in the vaping market, given the volumes declines in tobacco, these products are still a relatively small part of the picture," Streeter said.
"Investors had also been expecting greater regulation in the sector, so a potential increase in tax isn’t a wild surprise and given they are global companies a change in UK fiscal policy won't move the dial too much."
9.49am: IPO boost for London?
Some potential good news for London and the City has emerged, with speculation that Chinese online retail rising star Shein might consider a UK stock market listing.
The e-commerce group is looking at the LSE for an IPO after concluding that a US application is not likely to be accepted by the SEC, according to a report by Bloomberg.
London is now seen as a frontrunner, as well as Hong Kong or Singapore.
“Having one of the most disruptive names in retail float in the UK would certainly do wonders to help fix the London Stock Exchange’s damaged reputation as a listing venue," said analyst Danni Hewson at AJ Bell.
“Investor interest could be huge, which bodes well for attracting other names to list in the UK after a patchy spell that has seen a growing number of big stocks turn to the US as their main stock location.
Meanwhile, the FTSE has climbed out of its hole and is up 7 points at just over 7,691.
The dollar skidded to its lowest in five days, noted Markets.com analyst Neil Wilson, who said riskier assets "caught a bid" (ie were proving more attractive) at the European open.
This saw Germany's DAX leaving its peers behind to notch another record high, while Bitcoin rallied to a two-year high and there were "mild gains across the piece" following a tepid day for Wall Street.
Looking forward to a New Zealand central bank decision tonight where a rate hike is a "real possibility" for the first time since May 2023, Wilson said: "There are two questions we should ask ourselves: what is the likelihood the RBNZ sees fit to raise rates and, secondly, what might this mean for the Fed and market expectations more widely?
"Does it matter what the Fed does next? Financial conditions are already loose and the market is at an all-time high…how does the Fed cut into this?
"The risks for investors are maybe growing – the top 10% of stocks in the S&P 500 account for 75% of the market – the greatest concentration since 1929…while the risks grow so perhaps do the rewards for the bravest … that seems to have been how things have played out until now anyway," he concluded.
9.04am: Footsie flattened
The Footsie's small early gains have evaporated in the first hour, with the index dipping a toe into the red for a couple of minutes, down four points at 7,678.
Blue-chip housebuilders are acting as a drag again as investors mull yesterday's news of a new competition probe into several leading names.
However, this is being offset by gains for J Sainsbury PLC (LSE:SBRY) and Tesco PLC (LSE:TSCO), which are rising on the back of new supermarket price and sales data from Kantar.
The main headline for consumers and economists is that price inflation eased to almost a two-year low in February of 5.3%, from 6.9% a month earlier, the lowest rate since March 2022. This echoed the BRC shop price data earlier, which showed food prices at the lowest since May 2022.
“Though there’s been lots of discussion about the impact the Red Sea shipping crisis might have on the cost of goods, supermarkets have been pulling out all the stops to keep prices down,” said Kantar strategic insight director Tom Steel.
Fastest growing was Lidl, for the sixth month running, but Sainsbury's was not that far behind, increasing its share of the market by 0.4 percentage points to 15.6% with a 7.6% increase in sales.
Tesco grew 6.2% and its market share swelled 0.3 to 27.6%.
8.22am: FTSE starts higher
The FTSE 100 has surprisingly started on the front foot on Tuesday, led by a small mining rally and with Smith & Nephew (SN) topping the leaderboard.
In early trades a gain of 10 points has been added to the index, taking it to 7,694.
Mining companies are doing heavy lifting after China took steps to prop up confidence in its currency and economy.
SN shares rose 4.6% after its results impressed - "for once there were no nasty surprises", said analyst Seb Jantet at Liberum.
Fourth-quarter underlying revenue was a touch ahead of expectations at 6.4% versus consensus at 5.3%, as a stronger performance from Sports Medicine offset slightly weaker than forecast growth from Orthopaedics and Advanced Wound Management.
Mining heavyweights provided a boost, with Anglo American, Rio Tinto, Fresnillo, Antofagasta and Endeavour Mining all up more than 1%.
Biggest faller is chemicals group Croda, where the shares dropped 1.2% as profits tumbled on the back of destocking (see below).
The share price reaction will have surprised analyst Charlie Bentley at Jefferies, who expected a positive reaction after second-half adjusted profits were 7% ahead of the City consensus.
On the FTSE 250, Abrdn PLC (LSE:ABDN) is top of the leaderboard, up 5.1% after posting its full-year results, where it confirmed that work has begun on its cutting 500 jobs and that it is maintaining the dividend.
Analyst Tom Mills at Jefferies said operating profits are 3% better than the consensus forecast "driven by modestly better fee-based revenues and costs" and the flat dividend was "as expected".
On the downside, he noted that the three-year investment performance of Abrdn's funds "deteriorated meaningfully" to 42% of AUM above benchmark from 65% in 2022.
7.59am: Croda disappoints, Smith & Nephew more impressive
Some other results from around the FTSE 100, Croda International PLC (LSE:CRDA) has revealed profits tumbled last year as sales were hit by widespread destocking and a weak economic backdrop.
All three divisions posted lower revenues with the industrial specialities the worst hit by destocking and registering a 35% drop.
Steve Foots, chief executive, added the group is being cautious about the current year with recovery time across its various businesses “difficult to predict”.
Smith & Nephew PLC (LSE:SN) is another that has kept its dividend unchanged, with the hip and knee replacement specialist posting results that were better than improved guidance from last summer.
Revenues of $5.55 billion were up 7.2% on an underlying basis and 6.4% reported, versus guidance for 6-7% underlying growth.
Trading profit rose 7.6% to $970 million with a 17.5% trading profit margin, exactly in line with guidance.
For 2024 the board is being slightly cautious with new guidance, looking for underlying revenue growth of 5-6%, the same as it gave this time last year, though with trading profit margins expected to increase to at least 18.0%.
7.39am: Abrdn and the eight RNSes
Results from Abrdn PLC (LSE:ABDN) are a bit all over the place, with eight RNS announcements put out this morning to cover everything as 500 jobs cuts are confirmed, underlying profits are down, but statutory pre-tax losses are also down, but post-tax statutory losses have moved to a statutory profit for the year.
Anyway, some investors will only care that the dividend was maintained, with a 7.3p final payout making for a total of 14.6p per share, flat year-on-year.
Chief executive Stephen Bird said work has begun on the job cuts, which were first announced last month, which he said is part of a plan to help the group remove £150 million of costs by the end of 2025, on top of £102 million last year. However, the restructuring is expected to result in £150 million of costs this year.
He said the group has been “reshaped” over the past three years “to fit the modern investment landscape” and is now “better positioned for future growth”, though last year the investment industry was hit by structural and macroeconomic challenges.
"Our balance sheet remains strong which enables us to fund our cost transformation while continuing to strategically invest in growth areas and maintain our dividend. There is significant work ahead, but we are confident we will be successful in delivering future growth."
7.15am: FTSE 100 heading for another down day
The FTSE 100 is heading for a second successive sub-par session after US stocks headed lower overnight.
London’s blue-chip benchmark was being tipped to fall around 11 points on Tuesday’s open, according to spread-betting platforms.
This followed the loss of 22 points yesterday to finished at 7,684.3, a 0.3% decline.
On Wall Street, the S&P 500 fell 19 points or 0.4%, while the Dow Jones dropped 0.16% and the Nasdaq Composite 0.13%.
"It feels like there is a moment of calm and silence in the aftermath of major tech earnings, investors will decide whether this rally deserves to continue higher straight away," says market analyst Ipek Ozkardeskaya at Swissquote Bank.
"The week brings some important economic data on the table. The US will release its latest growth and inflation updates this week. And favourable data – meaning resilient but not abnormally strong growth, coupled with softening inflation, would allow the market bulls to surf on the ‘goldilocks’ wave.
"If that’s the case, we could see the stock market rally continue, and to broaden to sectors other than the technology stocks."
Economic releases today include a Kantar supermarket update and the BRC shop price index, which came out at midnight and showed price inflation at its lowest rate for almost two years.
Food prices rose 5% on last year, easing from the 6.1% inflation in January and the lowest since May 2022, according to the British Retail Consortium (BRC) shop price index.
Compared to January, food prices fell 0.1% in February, the first decline since last September, which the BRC said reflected falls in energy and fertiliser prices, along with fierce competition from retailers.