- FTSE 100 down 41 points at 7,639
- St James Place tumbles after making large complaints provision
- Bitcoin continues strong rally to near $60,000
The FTSE 100 is continuing to skirt just above its worst levels of the day, with the big losses from St James's Place and Reckitt Benckiser acting as a heavy anchor.
However, losses for the index have been pared to 42 points from over 55 earlier, now down 0.5% at 7,641.
Not helping things, the early gains for Vodafone on the back of the news of Italian sale talks have dissipated, and the shares are down 0.6%.
Housebuilder Taylor Wimpey is down 5% too, after saying it sees improvements in the outlook but guiding to lower sales and ongoing cost inflation.
The mid-caps of the FTSE 250 are also down, with the index falling 165 points or 0.86% to 18,999.
Direct Line is doing its best to lighten the load, with the shares up 24% on the rejected Ageas bid.
Other risers include Aston Martin, also up over 4% after it reported losses were more than halved, and Bluefield Solar Income Fund (LSE:BSIF) on the back of its results and a £20 million share buyback.
Fallers include WAG Payments, Future PLC (LSE:FUTR) and Watches of Switzerland.
3.40pm: Beware SJP scams
The City watchdog has warned clients of St James’s Place to avoid using claims management companies for complaints about the wealth manager's service.
SJP said this morning that it has made a £426 million provision to deal with potential compensation after a significant rise in complaints from clients.
In a statement to Citywire today, a spokesperson for the Financial Conduct Authority urged clients to engage with SJP directly rather than through CMCs, with the group having promised to contact those affected and reportedly hiring dozens of extra staff to deal with claims.
Scammers are targeting claimants who are awaiting decisions on existing claims, the FCA said.
The FCA said it has been working closely with the FTSE 100 firm on the company’s response to the increase in claims.
"We welcome its plans to refund clients who may not have received the ongoing advice service for which they had paid or where this cannot be appropriately evidenced," the regulator said in a statement.
3.20pm: Google CEO says Gemini AI images unacceptable
The CEO of Google parent Alphabet Inc (NASDAQ:GOOG), Sundar Pichai, said images generated by its Gemini AI chatbot, which included black and south-east Asian Nazis and native American vikings, are “completely unacceptable”.
Pichai sent an email to employees after Gemini’s image generator produced pictures of historical figures of vikings, Nazis and popes in a variety of ethnicities and genders.
The company took Gemini down after user complaints, with some said the chatbot's image generator pretty much refused to generate images of caucasian people.
“I know that some of its responses have offended our users and shown bias – to be clear, that’s completely unacceptable and we got it wrong,” he said in the message, which was first reported on Semafor.
It is another misstep by Google as it battles to catch up in the AI race with ChatGPT developer OpenAI, which is powering rival Microsoft.
Pichai said in the email: “No AI is perfect, especially at this emerging stage of the industry’s development, but we know the bar is high for us and we will keep at it for however long it takes.”
He said the company has already made progress in fixing Gemini’s 'guardrails' to mitigate abuses and avoid bias.
“Our teams have been working around the clock to address these issues. We’re already seeing a substantial improvement on a wide range of prompts,” he said.
Meanwhile, Alphabet shares are down 1.7% today, having lost almost 6% over the past week, or around $100 billion of the group's market value.
US markets are down as a whole, with the Nasdaq falling the most, down 0.53%, with the S&P 500 slipping 0.21% and the Dow 0.31%.
In London, the FTSE 100 is 0.66% lower at 7,632, while the mid-caps of the FTSE 250 are down almost 1% at 18,981.65.
2.50pm: Bitcoin regains $60k mark
After a surge of over 40% since the start of the year bitcoin has now retaken the $60,000 mark.
The king crypto has jumped over 6% today to $60,955.
These levels were last seen in late 2021.
Following recent US regulatory approval, a handful of spot bitcoin exchange-traded funds (ETFs) have re-energised demand, with BlackRock’s Bitcoin ETF said to have taken in $520 million yesterday – the second biggest inflow in a day of any ETF.
“If the current momentum continues, we expect that Bitcoin could beat the previous all-time high in a matter of weeks," says Nigel Green, boss of deVere Group (which his PR firm says is "one of the world’s largest independent financial advisory, asset management and fintech organisations", though the CEO still kindly makes time to dish out a few quotes for the marketing team every day).
“As more institutional players enter the space, the increased demand for Bitcoin has been driving prices higher. The influx of institutional capital also adds a layer of stability to the market, potentially mitigating some of the volatility traditionally associated with cryptocurrencies,” Green said.
2.23pm: US GDP growth revised lower
The US economy grew by 3.2% in the fourth quarter of 2023, slightly below forecasts of 3.3%, following a 4.9% rate in the third quarter.
Private inventories weighed on the GDP figures, although consumer spending and government spending were revised higher.
Alex Livingstone, head of FX and trading at Titan Asset Management, said the resilient US growth “reiterated the market's view of a March hike being off the table” as the US consumer spend remains robust.
“Investors now turn their focus to the next round of PCE inflation data, which the Fed will also emphasise, to illustrate the effectiveness of higher rates in tempering inflation,” he added. “We expect the inflation data to continue to decline but to a lesser extent as monetary policy grapples with sticky inflation.”
The S&P 500 is expected to open 0.3% points lower when markets open, with the Nasdaq and Dow Jones seen falling 0.5%.
Back in the UK, the FTSE 100 was last seen 50 points lower at 7,631.93.
2.02pm: easyJet back with the blue chips thanks to ‘revenge travel’
Here’s Susannah Streeter, head of money and markets at Hargreaves Lansdown, on easyJet reentering the FTSE 100 set: “While recovering pre-pandemic form is still proving highly elusive, easyJet’s continued progress has cheered investors, with shares up 9% year to date.
“The ‘revenge travel’ trend is still proving strong, with people still determined to see more of the world again after being cooped up at home during the Covid crisis.
“Consumers still appear to be ring-fencing chunks of disposal income to spend on airfares, seat upgrades and treats on board, with the desire to travel higher up wish-lists than home purchases like furniture and TVs.”
easyJet was first scratched from the lead index in June 2020, at the height of Covid-19 lockdowns.
The low-cost airline will replace Endeavour Mining, whose shares have fallen by nearly a third this year.
Endeavour fired its chief executive Sébastien de Montessus in January due to “serious misconduct”.
Endeavour will therefore be punted to the FTSE 250 set when the rebalancing takes effect on 18 March.
1.36pm: Bitcoin rockets above $60,000
Bitcoin (BTC) has surged above $60,000 amid the strongest three-day rally in recent memory.
The world’s largest cryptocurrency has added over 15% against the US dollar week on week, bringing the BTC/USD to $60,500 (£47,838) at the time of writing.
It marks the first time bitcoin has surpassed $60,000 since the unprecedented bull run in November 2021.
Bitcoin bulls are now eyeing up $69,000, which is where the cryptocurrency’s all-time high is currently set.
Sustained inflows into spot-bitcoin exchange-traded funds are keeping optimism in the spot markets alive, with Bloomberg data showing a record day of inflows yesterday for BlackRock’s iShares Bitcoin ETF (IBIT).
1.25pm: US stocks heading for a fall
Wall Street is seen joining the wider market woe today. In futures markets, the S&P 500 is trading 0.38% lower, while Nasdaq 100 is down 0.49% and the Dow Jones facing a 0.32% decline.
Today is seeing a pullback, particularly in tech and smaller stocks, said market analyst David Morrison at Trade Nation.
Dating app owner Bumble Inc (NASDAQ:BMBL) is one such faller, down 11% in pre-market trading as it announced job cuts to deal with an expected slowdown in user spending.
But going the other way is Beyond Meat Inc (NASDAQ:BYND), jumping more than 60% after the plant-based food brand said margins would grow massively this year.
Apple Inc (NASDAQ:AAPL, ETR:APC) is down slightly in pre-market trading after last night it abandoned its decade-long electric vehicle project, while recent tech powerhouse NVIDIA Inc is trading 1.3% lower.
12.43pm: Direct Line jumps on bid report
The FTSE 100 index not long ago sank to its lowest in over a week, just scraping 7,620 but is off that level now.
St James's Place is off its worst falls, now down a mere 25% as investors continue to digest the swing to losses and big dividend cuts.
Meanwhile, Reckitt shares are extending losses, now 12.5% lower, with Taylor Wimpey also contributing to the slide after its own results announcement.
A surprise 22% surge for Direct Line Insurance Group PLC (LSE:DLG) to 200p is lifting the FTSE 250 off its own worst levels.
Shares in the insurer jumped on reports that it has rejected a takeover approach from Belgian insurer Ageas. It has rebuffed the approach, according to Bloomberg.
The mid cap index is down 94 points or 0.5% at 19,070, with Aston Martin also having moved from the fallers to the risers list, up 1.5%.
12.15pm: easyjet promotion in FTSE reshuffle expected
Based on closing prices yesterday, easyJet PLC (LSE:EZJ) is set to fly back into the FTSE 100 as part of the next quarterly index reshuffle.
This is due to Endeavour Mining being likely to drop out of the top flight with the shares down 26 over the past year.
Other expected moves include construction firm Kier Group PLC (LSE:KIE) being promoted to the FTSE 250, along with what is likely to be a short-lived stint for logistics group Wincanton PLC (LSE:WIN, OTC:WNCNF) as its shares are subject of a bid battle.
Relegations from the FTSE 250 could include IT professional services provider FDM Group (LSE:FDM) and Tullow Oil PLC (LSE:TLW).
11.59am: Government in NatWest stake sale talks
UK officials have been discussing plans for how to sell a big chunk of the government's stake in NatWest Group PLC (LSE:NWG) with investment platforms Hargreaves Lansdown and AJ Bell.
NatWest shares are up 1% at 236.1p - less than half they were in late 2008, when the government became the majority investor in what was RBS.
Jeremy Hunt said in his autumn statement that the plan was to sell all state-owned shares in the lender by 2026 and that the Treasury would look at a retail offer "in the next 12 months, subject to supportive market conditions and achieving value for money".
Bloomberg is today reporting the talks with the DIY investment platform companies, noting that the government asked the firms to sign non-disclosure agreements and the talks are at an early stage.
The Chancellor is expected to confirm the retail sale in next week's Budget, the report said.
11.26am: Miners' China worries weigh on FTSE
Also weighing on the FTSE this morning are falls for the mining sector, meaning the London benchmark is lagging behind its European counterparts.
Miners are coming under pressure, says market analyst Joshua Mahony at IG, as "Chinese concerns re-emerge thanks to yet another real estate warning sign from Country Garden".
Country Garden received a liquidation petition after a non-payment on a $205 million loan, which Mahony said will set back Beijing's efforts to restore confidence in the beleaguered real estate sector.
The company said in a regulatory filing to the Hong Kong Stock Exchange it would "resolutely" oppose the petition that had been filed by a creditor that is part of fellow Hong Kong-listed outfit Kingboard Holdings.
Country Garden's shares closed down 12.5% in Hong Kong.
11.11am: Bitcoin's mega rally
Bitcoin is approaching $60,000, up over 4% today and what has been the strongest surge since the pandemic.
The world’s largest cryptocurrency has added over 13.5% against the US dollar week on week, bringing the BTC/USD to $59,397 at the time of writing.
It marks the first time bitcoin has surged above $59,000 since the unprecedented bull run in November 2021.
Bitcoin bulls are now eyeing up $69,000, which is where the cryptocurrency’s all-time high is currently set, according to our daily crypto report.
10.55am: Ooh-aar Tata electric cars
Somerset has been confirmed as the planned site of what will be the UK's biggest electric vehicle battery factory, by Jaguar Land Rover's Indian owner.
Tata Group says battery production is set to begin from the plant near Bridgwater in Somerset in 2026, which has been secured by its Agratas battery business.
Costing £4 billion and situated on a brownfield site, the plant is expected to create around 4,000 jobs and many more in the supply chain.
Last summer, Tata confirmed the plans after saying it had secured hundreds of millions in UK government funding, thought to be roughly £500 million.
The site of the 'gigafactory' was confirmed today as being the Gravity Smart Campus in Puriton, the site of a former WW2 munitions factory.
With a planned capacity to produce 40 gigawatt hours (GWh) of battery cells a year, Agratas said it expects the factory will by the early 2030s be able to supply almost half of the required capacity by the UK auto sector.
10.25am: Halfords hits the skids
Halfords Group PLC (LSE:HFD) shares are now down 30% after it reported a "further material weakening" in three of its four core markets – cycling, retail motoring and consumer tyres.
Liberum analyst Adam Tomlinson said this was an unscheduled trading update, with PBT guidance cut 25%, which follows the previous trim only a month ago.
"This is clearly another disappointing update and we expect the shares to suffer today. The negative earnings momentum continues to reinforce our long-held view that the group’s medium-term PBT target of £90m-110m is very stretching," he said.
In the near-term, he notes that inventory levels stand some 30-50% higher than pre-COVID levels, "which may bring further earnings pressure through the need to clear inventory".
10.01am: Chewing over the bad news
The FTSE 100 is heading ever lower as the morning goes on, now extending its loss to 45 points or 0.6% to 7,638.
Analyst comments are coming in thick and fast for some of the results published earlier, most of it confirming the bad news.
On St James's Place, which earlier made provision for a £426 million charge against the anticipated cost of refunding ongoing service charges together with interest and administrative costs.
UBS analyst Nasib Ahmed notes the dividend was, as a resul, "significantly lower" than City analysts had forecast, with new divided guidance reducing expectations by around 30%.
"We expect a strong negative reaction," Ahmed said, and indeed the shares are down by almost a third at levels not seen since late 2012.
Jefferies analyst Julian Roberts said even without the provision, the cash result was 4% below consensus forecasts.
"Clearly the provision and related complaints are the headline news and will be taken negatively, although the cash result was slightly weaker than forecast already. Complaints increased in the second half of 2023, and there may be concerns that more will come in. The impact of this on advisers is unknown, but any potential damage to the partnership would be negative for the company," said Roberts.
On Reckitt Benckiser, UBS's Guillaume Delmas said it was a "disappointing finish to the year", with Q4 like-for-like sales down 1.2% a 280 basis points miss versus the consensus forecast for 1.6% growth.
He said this was down to a "couple of one-offs": namely an understatement of trade spend in two Middle Eastern markets and a voluntary product recall of the Nutramigen toddler nutrition brand in December.
On Vodafone's Italy sale talks, Russ Mould at AJ Bell says this news "came to the rescue" for the FTSE, sending its shares higher.
"The telecoms group has been stuck in the mud for a long time, trying to revive growth and reignite a spark in the business," says Mould.
"Work to streamline the group has already involved various deals but the market is still not convinced Vodafone has found the magic solution judging by its share price performance over the past five years. The Italian deal, if successful, is a step in the right direction but only one small piece of the puzzle."
9.22am: Drax under scrutiny for burning rare forest wood
Shares in Yorkshire power company Drax Group (LSE:DRX) are down 0.4% with two stories out today, one of which is that it has kept burning wood from rare forests.
A report from the BBC, based on papers obtained by Panorama, shows the former coal power station took timber from woodland in Canada it had previously claimed were "no go areas".
Drax, which has received £6 billion of UK green subsidies, says its wood pellets are "sustainable and legally harvested".
The company also confirmed separate news today that it has provisionally secured government-backed agreements to provide energy from its pumped storage and hydro assets, at a fixed price of £65 per kilowatt.
With fixed payments for its existing pumped storage and hydro assets in 2027 and 2028 and from the refurbishment of Cruachan Power Station from October 2027 to September 2042, income of £28 million and £221 million is expected those periods respectively, in addition to existing agreements.
9.10am: Halfords hits skids, FTSE 250 falls as Aston Martin drops
Halfords Group PLC (LSE:HFD) shares are tumbling after the motoring and cycling retailer slashed its profit guidance for the current year.
The group has witnessed a "further material weakening" in three of its four core markets – cycling, retail motoring and consumer tyres – causing a fall in sales volumes and profits.
Aston Martin Lagonda (LSE:AML) seems to be another disappointment for investors this morning, with shares having been revving up ahead of results but although losses were more than halved, the shares are down 3%.
Average selling prices hit record levels last year, helping revenues rise 18% to £1.63 billion, with losses fell to £240 million from £495 million.
On an underlying basis, profits rose 61% to £306 million, with margins improving and on track to hit a long-term target of 40% said executive chairman Lawrence Stroll.
Derwent London PLC (AIM:DLN) is a rare name in the green on the back of results, even though the property developer's net assets per share decreased 13.8% meaning the shares trade at a 39% discount.
Analysts at Stifel said the outlook was optimistic and the company "has a history of calling the cycle correctly".
The FTSE 250 index is joining its larger sibling in the red, down 102 points or 0.5% at 19,061.29.
8.48am: More gory details on SJP
St James's Place shares have plummeted 30% to 431p, a 10-year low, after setting aside £426 million to deal with a "significant increase" in customer complaints, which led to a big swing from profit to loss.
It said the number of complaints escalated in the latter part of last year as service levels for ongoing clients were "less complete" in the years before it started using a new customer relationship management (CRM) system in 2021.
The FTSE 100-listed company was given a wigging by the Financial Conduct Authority back in the autumn, pushing the firm to align its fees with the new "consumer duty" regulations introduced in July, which aim to ensure companies act in the best interests of their customers.
In October, the company announced changes to its customer fee structure for investment bonds and pensions to make the fees more transparent and competitive, which it said would cost it £140-160 million, mostly in 2024.
With the combination of the complaints provision and new fee structure, future shareholders' returns will be limited, the company warned, with total annual shareholder distributions to be set at 50% of the full year underlying cash result, with the annual payout will be fixed at 18p per share for the next three years.
8.25am: FTSE flops again
The FTSE 100 has continued its losing run, with disappointing blue-chip results weighing on the embattled index.
In early trades, the London benchmark slid 19 points or 0.25% lower to 7,663.77.
A 28% plunge for St James's Place PLC (LSE:STJ) was a significant stone around its neck, as the UK's largest wealth manager slashed its dividend after swinging to a loss on the back of a £426 million provision for expected customer complaints.
The final dividend was chopped to 8p per share from 37.2p last time, and the payout for 2024, 2025 and 2026 was also set at a lower bar.
Elsewhere, the near-10% decline at Reckitt Benckiser Group PLC (LSE:RKT, ETR:3RB) would have normally grabbed the headlines, after the consumer products group's fourth-quarter performance fell short of expectations due to reduced sales of cold and flu products.
Housebuilder Taylor Wimpey well 2.5% despite profits beating its earlier guidance. It said it expects house sale completions to fall further to 9,500-10,000 in 2024 from 10,356 last year.
"This is slightly below consensus, which currently expects 10,451 UK units, but appears prudent if the recent improvement in the market can hold," said analyst Edward Prest at Liberum.
Top of the risers was Vodafone Group PLC (LSE:VOD), up almost 4% after notifying investors that a cash price of €8 billion for its Italian arm has been mooted in sale talks with Swisscom.
7.55am: Wimpey beats, Reckitt misses
Results from housebuilder Taylor Wimpey PLC (LSE:TW.) show profits plunged 48% last year, though this was not as bad as expected.
The FTSE 100-listed housebuilder reported a profit of £473.8 million before tax and exceptional items, beating the £470 million top end of guidance, but down from £908 million a year earlier.
This was on the back of total UK house completions falling to 10,438 from 13,773, while underlying build cost inflation in 2023 was around 8.5%.
For 2024 it expects to see a further decline in completed home sales, with profit margins continuing to be squeezed by lower house pricing and higher costs, but build cost inflation falling from 4% in work currently underway to 1% in new tenders.
Elsewhere, Reckitt Benckiser Group PLC (LSE:RKT) reported a 1.2% fall in like-for-like sales in the fourth quarter, which was worse than City analysts expected.
Further modest growth is expected in 2024 as lower sales volumes combine with slower price rises.
7.35am: Vodafone wants up-front cash
A €8 billion cash price is being mooted by Vodafone in talks with Swisscom, which is lower than the €10.45 billion price that had been suggested in an earlier deal the FTSE 100 company rejected from Paris-based Iliad.
The French telecommunications company proposed a merger deal in December where the two companies' Italian businesses would be combined, with each parent still holding a 50% share.
Under this proposal, Iliad would pay Vodafone €6.5 billion in cash plus an additional €2 billion in a shareholder loan.
Having rejected the Iliad proposal last month, Vodafone said today that it believes the potential transaction with Swisscom "delivers the best combination of value creation, upfront cash proceeds and transaction certainty for Vodafone shareholders".
7.16am: FTSE 100 called higher
The FTSE 100 has been called higher on Wednesday following a flat few days and mixed Wall Street trading overnight.
Spread-betters have the index rising around 4 points, a day after it closed 1.28 points lower at 7,683.02.
News from Vodafone might provide a boost to the London benchmark, as the stumbling telecoms giant said it is now in exclusive discussions with Swisscom about a cash sale of its Italian arm.
The pair currently are talking about Swisscom buying Vodafone Italy for a total value of €8 billion excluding debt and cash.
Elsewhere we have results from Aston Martin, Just Eat and builder Taylor Wimpey.
Overnight, the S&P 500 rose 0.17% and the Nasdaq 0.37% but the old-school Dow Jones fell 0.25%.
Much earlier this morning down under, the Reserve Bank of New Zealand held monetary policy unchanged, in a move that was being watched closely in the northern hemisphere.
"In contrast to other G10 central banks eyeing the start of their respective rate cutting cycles, markets have speculated in an additional rate hike from the RBNZ, but the tone of today's announcement was clearly to the dovish side, suggesting that the current level of policy rate is seen as sufficiently restrictive," said analysts at Danske Bank.