- FTSE 100 to close up 57 points
- Pearson and banks lead risers
- Ocado slips 6%
16:12pm: FTSE 100 to close higher after late surge from miners
The FTSE 100 is set to close 57 points higher after a late lift from miners Anglo American (+4%) and Endeavour Mining (+4%).
Leading the index's risers throughout the day has been publisher-turned-educational material provider Pearson after it soared 5.5% on the back of strong results.
New chief executive and former Microsoft employee Omar Abbosh said the development of AI and its integration into Pearson’s product suite can mark an inflection point for the group.
Investors were also pleased with the group’s announcement of another £200 million share buyback as cash flow rose over the past twelve months.
It was also a good day for the banks, with the leading lenders all looking to set close out the week in the green, with Standard Charted up 4%, NatWest and Barclays up 3% and Lloyds up 2%.
Pushing the FTSE 100 the other way was Ocado (-6%) after it continued to lose value on the back of a messy dispute with Marks and Spencer over their joint venture Ocado Retail.
Sophie Lund-Yates at Hargreaves Lansdown said: "There will be real concerns about what the cost of litigation could be for both parties... There will now be questions about who the next partner might be for Ocado."
The FTSE 250 is set to close 285 points higher after ITV (+14%), WAG Payments (+10%) and Close Brothers (+10%) all soared.
ITV, despite having struggled in the year-to-date, rallied after it said it had sold its half share of the BritBox streaming service to BBC Studios for £255 million with the proceeds used to fund a share buyback programme.
Announcing the disposal, the broadcaster said the move would allow it to focus on enhancing its domestic streaming platform, ITVX, and expand its global Studios division.
15:44pm: Government urged to extend welfare support
Vulnerable Brits could receive more cash to help them through the cost-of-living crisis after nearly ninety MPs pleaded with Jeremy Hunt to continue the Household Support Fund (HSF).
Initiated in 2021 and set to finish in March, the HSF has distributed £2.5 billion to help with the assistance of vulnerable people in managing expenses for essentials such as food, water, and energy.
In January, charity the Joseph Rowntree Foundation revealed that more than a fifth of UK residents are living in poverty, with many having experienced sharp downturns in their financial situations since 2017.
In their letter, MPs and Lords said: “Keeping the HSF will help to offset the cost of living crisis that still so many families are facing. It is simultaneously the right thing to do and the fiscally prudent choice.
“We believe that removing the HSF will push more people into poverty and destitution at this time and worsen their health and their children’s.”
The Spring Budget will take place on Wednesday 6 March and is expected to see changes including the scrapping of individual taxes and a support framework for 99% mortgages.
To see all the rumours for the Budget read here.
15:24pm: GSK boss sees pay jump 51% in 2023
GSK boss Emma Walmsley saw her overall pay rise 51% to around £13 million in 2023 after she received a large hike in performance-related bonuses.
Some £11 million of the pay came from performance bonuses and awards after the pharma giant beat estimates in the fourth quarter of 2023 - the first full financial year since it spun off Haleon.
In 2022, Walmsley received £8.4 million and while the jump was greater than rival boss Pascal Soriot of AstraZeneca, he was still paid more, receiving £16.9 million.
Last month, the healthcare team at Citi turned positive on GSK for the first time in seven years.
Pushing the investment bank's analysts over the precipice to 'buy' was the outlook for belantamab mafodotin, (known as Blenrep for short), the drug giant's treatment for the blood disease myeloma.
"Our upgrade is based not only on Blenrep’s underappreciated revenue potential but also the cumulative impact of the multiple incremental positives ranging from Zantac liability outlook, RSV/ Shingrix, astute business development, and increasingly positive ViiV outlook post dolutegravir loss of exclusivity," Citi said in a note to clients.
14:57pm: Wall Street opens flat as manufacturing output ticks higher
Wall Street opened relatively flat on Friday, with the Dow Jones around 68 points lower, while the S&P 500 and the Nasdaq are up by 2 points and 26 points respectively.
In macro news, US manufacturing PMI figures came in at 52.2 points for February, building on January's 50.7 and improving on forecasts of 51.5.
In equities, Dell opened around 24% higher after its fourth-quarter earnings saw both revenue and profits beat Wall Street estimates as it continues to benefit from the rise of AI.
New York Community Bankcorp is down around 25% after its fourth-quarter update came with the exit of its CEO and the tenfold increase of losses to US$2.7 billion.
Other movers include Braodcom (+4%), Zscaler (-10%), Xcel Energy (-5%), Micron Technology (+3%), NetApp (+25%) and Las Vegas Sands (-6%).
14:41pm: UK has "some way to go" before rate cuts, says BoE chief economist
The Bank of England's chief economist Huw Pill believes the UK still has "some way to go" before he feels confident in voting in favour of cutting interest rates.
"While I recognise that we are now seeing early signs of a downward shift in the persistent component of inflation dynamics, those signs thus far remain tentative," Pill said in a speech on Friday.
"In my view, we have some way to go before such evidence becomes conclusive."
Pill also believes rates don't have to stay at 5.25% for the Bank of England to slow inflation.
"Maintaining restrictiveness does not necessarily mean leaving Bank Rate unchanged," he added.
"For one thing, real interest rates – which may be more relevant for some economic decisions and thus for the transmission of monetary policy – will rise as inflation and shorter-term inflation expectations ease.
"The MPC will need to take this into account in setting Bank Rate. And what’s more the overall monetary policy stance can remain restrictive – even if less so than previously – even after a Bank Rate cut."
13:47pm: Pearson's digital transformation cheered by analysts
As the FTSE 100 continues to hold steady at around a 40-point lift, it's a 3% rise from Pearson and a Barlcays-led rally from the banks that is holding the gains.
Pearson PLC (LSE:PSON) is sitting at an 18-month high after the education specialist allayed fears that AI would be a major threat to its business.
New chief executive and former Microsoft employee Omar Abbosh said the development of AI and its integration into Pearson’s product suite can mark an inflection point for the group.
Investors were also pleased with the group’s announcement of another £200 million share buyback as cash flow rose over the past twelve months.
Shore Cap said it was a "pleasing" set of results with the broker highlighting the robust performance, momentum, and positive nature of the accompanying outlook.
“Pearson is well placed to benefit from a positive outlook for global learning spend across a variety of sectors and to enhance its offering via the next stage of its digital journey,” the broker wrote in a note.
Adam Vettese, analyst at eToro, believes Friday's results are proof "that an old dog can learn new tricks" with the shift from a publisher to a digital media group continuing to please investors.
Vettese said: "Assessments and qualifications, particularly English language courses, have been driving growth and there is plenty of cash being generated to facilitate a dividend increase and expansion of its buyback programme, which will keep shareholders happy.
"Pearson is on a solid trajectory at the moment and with some cost savings this year could well continue to deliver."
13:36pm: Royal Mail to hike stamp prices in April
Stamp prices will increase in April, with first-class stamps jumping by 10p to £1.35 and second-class stamps rising by the same amount to 85p.
In March last year, first-class stamps cost 95p, but Royal Mail hiked the price to £1.10 in April 2023 before putting through another increase in October.
The loss-making delivery giant brings through the rises as it continues to suffer from increased costs and weaker demand for letters.
Last year, industry regulator Ofcom said there should be an inflation-linked cap until 2029 on the amount second-class stamps can increase by.
Nick Landon, chief commercial officer at Royal Mail, said: “We always consider price changes very carefully but we face a situation where letter volumes have reduced dramatically over recent years while costs have increased.
“It is no longer sustainable to maintain a network built for 20 billion letters when we are now only delivering seven billion.”
13:19pm: Wall Street to open flat after record February
Wall Street is set to open relatively flat on Friday, with the Dow Jones around 15 points higher at 38,960, while the S&P 500 is stuck at 5,104.
Nasdaq's lead index is trading around 19 points at 18,102.
The indexes begin March after a bullish February, which saw both the Nasdaq and S&P 500 reach record highs, largely driven by the huge gains of tech companies like Nvidia, which rallied 25% last month.
Leading the pre-market movers are Adial Pharmaceuticals, which rallied 94% on the back of receiving a patent to treat opioid use disorder, Marathon Digital (-16.53%) and Advanced Micro Devices (+9%).
Also making a stir in the US is news that lawyers on behalf of Elon Musk filed a civil lawsuit against ChatGPT developer OpenAI and its founders.
Musk alleges that the founding principles of OpenAI as an organisation that would develop artificial general intelligence (AGI) “for the benefit of humanity” have been lost in favour of maximising shareholder profits.
12:57pm: FTSE 100 holds early gains; FTSE 250 rallies
London's blue-chip index is continuing to hold onto its early morning gains, up around 52 points after results from Pearson saw it lift more than 4%.
Barclays is also trading around 4%, leading the way for a small rally amongst lenders, with NatWest and Lloyds up 2.5% and 2%, respectively.
Attempting to push the index the other way is Ocado, with shares having dropped 3% as it continues to suffer the fallout of its breakdown in its relationship with Marks and Spencer.
In the FTSE 250, the index continues to soar 196 points higher on the back of a 14% jump from ITV.
The broadcaster announced it had sold its half share of the BritBox streaming service to BBC Studios for £255 million with the proceeds used to fund a share buyback programme.
Other FTSE 250 risers include Close Brothers (+6%) and TBC Bank (LSE:TBCG) (+5%), while leading the fallers are Dowlais (-3%) and Vesuvius (-3%).
12:35pm: Pound picks up on housing market upturn
The pound has lifted higher on Friday as the housing market continues to pick up, with stronger-than-expected inflation in the Eurozone also providing a boost.
Sterling lifted around 0.14% against the US dollar at US$1.26, attempting to recover some of the 0.7% slips suffered in the year-to-date.
Meanwhile, the euro held flat against the pound at around 85p.
In crypto, Bitcoin (BTC) has shaken off Thursday's slight wobble, with the benchmark cryptocurrency's mega-rally continuing with a 1.6% jump on Friday to US$62,170.
Bitcoin’s week-on-week performance is over 20% in the green, with the world’s largest cryptocurrency penning 45% worth of gains over the whole month of February.
This represents one of the most bullish months on record, and the strongest monthly gain since December 2020.
12:18pm: Zara to reopen stores in Ukraine
Zara owner Inditex has revealed it is planning to reopen stores in Ukraine in April, over two years after Russia invaded the country.
Some 20 stores of the fast-fashion giant are scheduled to reopen on April 1, with three of the sites opening under the Zara brand.
Locations in Kyiv will open first, with the group targeting reopenings of around 50 stores, albeit without a time limit attached.
“The group’s priority continues to be the safety of its employees and customers,” Inditex said in a statement.
The company had 72 stores in Ukraine and 558 in Russia as of 2019, however, in 2022 it agreed to sell the later set of stores to Daher Group, the UAE-based firm.
11:56am: Ocado continues to shed value after M&S fallout
Ocado shares continued to tumble on Friday, falling 3% and leading the FTSE 100 fallers, as it continues to suffer the fallout of its breakdown in partnership with M&S.
The grocery technology company said it may need to sue Marks and Spencer Group PLC (LSE:MKS) over a dispute that is preventing a payment to the online grocery specialist after their Ocado.com joint venture failed to meet performance targets.
Sophie Lund-Yates at Hargreaves Lansdown said: "There will be real concerns about what the cost of litigation could be for both parties – but more importantly, what the souring of relations means for the future of M&S food.
"The Ocado deal was a way for M&S to create an online footprint, with customers encouraged by the broad breadth of options available by the combination of Ocado.
"There will now be questions about who the next partner might be for Ocado, and that could leave somewhat of a hole in M&S’ food strategy."
Marks and Spencer shares are reacting better to the news, with shares holding flat on Friday after having dropped around 3% on Thursday.
11:35am: Hopes of early Eurozone rate cut dashed
An early Eurozone rate cut is looking almost impossible after inflation in the single currency region failed to slow by as much as economists had predicted.
The Eurozone's consumer price index fell to 2.6% in February, improving on January's figure of 2.8%, but failed to beat expectations of 2.5%.
Similarly, core inflation, which doesn't include food and energy prices, fell month-on-month from 3.3% to 3.1% but failed to meet estimates of 2.9%.
Jack Allen-Reynolds, deputy cheif eurozone economists at Capital Economics, said: "Most policymakers at the ECB have stuck to the view that they need more time to be convinced that inflation will fall sustainably to 2%.
"February’s inflation data will have strengthened that conviction. So an interest rate cut in April – as we have been forecasting – is now not going to happen."
11:05am: M&S wins Marble Arch legal battle with Gove
Marks and Spencer Group PLC (LSE:MKS) has won its legal battle with Michael Gove over the proposed redevelopment of its Marble Arch store.
A High Court judge sided with the FTSE 100 retailer after the Housing Secretary had attempted to block its plans to knock down and rebuild its Oxford Street department store.
Gove initially rejected the proposals as he claimed it would "fail to support the transition to a low carbon future, and would overall fail to encourage the reuse of existing resources, including the conversion of existing buildings.”
M&S has proposed to knock down the current site and rebuild it with a new 10-storey building.
The judge said Gove “misinterpreted and wrongly applied planning policy” by rejecting the proposals.
10:44am: British manufacturing industry contracts on Red Sea disruption
UK manufacturers experienced additional declines in February after Houthi attacks in the Red Sea caused prices to increase as deliveries were delayed.
The S&P Global UK manufacturing PMI came in at 47.5 for last month, rising to the highest level in ten months and increasing on flash figures of 47.1.
Despite the rise, the figure being below 50 means output has contracted for 19 consecutive months.
Rob Dobson, director at S&P Global, said: "UK manufacturers faced challenging circumstances in February, as the ongoing impact of the Red Sea crisis delayed raw material deliveries, inflated purchase prices and impacted production capabilities.
"Production volumes subsequently contracted for the twelfth successive month while total new orders fell at the sharpest rate since October.
"The impacts were felt particularly hard on the price and supply fronts. Input cost inflation hit an 11-month high, leading to a further increase in selling prices."
9:57am: ITV's Britbox deal "should be taken positively"
The FTSE 250 is being pushed 133 points higher after ITV PLC (LSE:ITV) rallied 14% after selling half of its stake in Britbox.
Analysts at UBS believe the deal "should be taken positively" despite of any struggles with performance in the year-to-date.
"While we believe value exists in ITV underpinned by Studios, we expected near-term catalysts were limited as sentiment has been impaired by scepticism around ITV's ability to scale EBITA from FY23 lows and achieve c67% of Group revenues from Digital (c£750m) and Studios in FY26," the Swiss bank explained.
Announcing the disposal, the broadcaster said the move would allow it to focus on enhancing its domestic streaming platform, ITVX, and expand its global Studios division.
After accounting for loan repayments and tax, the deal will net £235 million.
9.27am: Ryanair confirms Boeing aircraft delays, fare hikes and reduced capacity expected
Ryanair has confirmed it will receive only 40 deliveries of the Boeing 737 aircraft out of an expected 57 in June 2024.
“This will cause some minor schedule changes in the context of Ryanair’s 600 aircraft fleet and will reduce frequencies on existing routes rather than cutting new routes,” the budget carrier said in a statement.
The reduction in deliveries is another blow to US aerospace group Boeing’s reputation since a dramatic mid-air blowout caused a door to fly off during an Alaska Airlines flight in January.
Ryanair’s chief executive Michael O’Leary said he was “very disappointed at these latest Boeing delivery delays, but we continue to work with Boeing to maximise the number of new B737 aircraft we receive by the end of June”.
O’Leary warned that these delays "will lead to more constrained capacity and slightly higher air fares for consumers in Europe in Summer 2024".
8.50am: The morning so far
The FTSE 100 lead index opened in the green this Thursday, bolstered by a solid run on banking stocks from Barclays to Standard Chartered.
The mood was uplifted by a surprisingly strong Nationwide House Price Index which rose by 1.2% year on year in February, breaking a 12-month streak of declines while smashing market expectations of a 0.7% increase.
Robert Gardner, Nationwide’s chief economist, did urge caution, stating: “The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market… Nevertheless, near-term prospects remain highly uncertain, in part due to ongoing uncertainty about the future path of interest rates.”
The market remained chipper regardless, even though a handful of annual results garnered a mixed reaction.
British engineering big cap IMI was at the bottom of the FTSE 100 pile after publishing its preliminary results for 2023.
Statutory revenues gained 7% £2.2 billion, though operating margins fell 10 basis points to 14.5%, attributed to what the group called “complexity reduction programme”.
Rightmove, meanwhile, warned that customer numbers “are likely to drop” in the year ahead due to “uncertainty in the macro environment”.
Elsewhere in company news, ITV PLC (LSE:ITV) announced its exit from the BritBox joint venture with BBC Studios, while Wincanton’s board threw its support behind a takeover bid from GXO Logistics.
The FTSE 100 was trading 36 points higher at 7,666 as of 8.50am.
8.38am: Banking stocks up across the board
NatWest Group PLC (LSE:NWG), Standard Chartered PLC (LSE:STAN), Barclays PLC (LSE:BARC) and Lloyds Banking Group PLC (LSE:LLOY) were all at the top of the FTSE 100 movers list this morning.
The rally on lenders follows encouraging news emerging from the housing market, with Nationwide housing prices for February coming in hot at 1.2% higher year on year, smashing forecasts of 1.2% and marking the first yearly increase in over 12 months.
Buoyant banking stocks have helped to lift the FTSE 100 index 40 points higher to 7,670.
8.33am: IMI results fail to move the needle
British engineering big cap IMI plc was at the bottom of the FTSE 100 pile this morning after publishing its preliminary results for 2023.
Statutory revenues gained 7% £2.2 billion, though operating margins fell 10 basis points to 14.5%, attributed to what the group called “complexity reduction programme”.
Profit after tax added 5% to £237.3 million.
The board recommended a final dividend of 19.2p per share, compared to 17.4p per share in 2022.
IMI said its adjusted earnings per share (EPS) for the year should be between 120p and 126p, compared to this year’s results of 116.8p.
Shares were seen 2.3% lower at 1,706.46p.
8.15am: Rightmove shares called lower after results
FTSE 100 property portal Rightmove PLC (LSE:RMV) dipped 2.5% in opening trades after posting its annual results.
The group predicted that customer numbers “are likely to drop” in the year ahead due to “uncertainty in the macro environment”.
Revenues in the year gone were up 20% to £364.3 million, though operating margins dipped from 73% to 71%.
The final dividend for 2023 was up 10% to 5.7p per ordinary share, with the total dividend for the year up 9% to 9.3p.
Shares were last seen trading at 557p.
8.01am: ITV sells its stake in BritBox to BBC
ITV PLC (LSE:ITV) has sold its 50% ownership in streaming service BritBox to BBC Studios for £255 million, making BBC the sole owner.
Under the terms of the agreement, ITV Studios will continue to receive an ongoing revenue stream from BritBox International similar to current levels for the use of ITV content under new extended licensing agreements.
ITV boss Carolyn McCall said: "The sale of 50% of BritBox International means ITV is focused on its core strategic goals of continuing to build on ITVX's success and growing ITV Studios.
"I would like to thank the BritBox International team for making the company such a success and particularly CEO Reemah Sakaan for her leadership, drive and vision."
7.45am: Wincanton board throws support behind GXO cash offer
The board of logistics company Wincanton PLC (LSE:WIN, OTC:WNCNF) has thrown its support behind an increased £762 million cash offer for the company from GXO Logistics.
Sir Martin Read, chairman of Wincanton, said: “The Board of Wincanton is pleased that GXO recognises the very significant value inherent in this business and intends to recommend the offer to shareholders for their consideration."
Wincanton had previously urged shareholders to accept a lesser offer from French bidder CEVA, until GXO rebuffed with a knock-out bid on Thursday.
7.25am: UK housing prices in recovery mode
Nationwide’s House Price Index rose by 1.2% year on year in February, breaking a 12-month streak of declines while smashing market expectations of a 0.7% increase.
Source: tradingeconomics.com
It comes a day after data from Zoopla showed the number of mortgages agreed had increased 15% across the UK in January, also bearing expectations.
The data suggests the darkest days of the cost-of-living squeeze may be over, with prospective homebuyers returning to the market.
Borrowers have also been flocking to deposit-free mortgages, while the government’s anticipated support for 99% mortgages in the upcoming budget is likely to spur market activity further.
7.08am: FTSE 100 to open add 50 points
The FTSE 100 is expected to add up to 50 points to 7,689 when markets open, after closing essentially flat yesterday.
On the macroeconomic calendar, Nationwide housing prices for February came in hot at 1.2% higher year on year, smashing forecasts of 0.7% and marking the first yearly increase in over 12 months.
On the company news front, Rightmove PLC (LSE:RMV), Pearson PLC (LSE:PSON) and Tritax Big Box will shortly have their annual results out.
Overnight, the US markets notched up new records, with Nasdaq closing 0.9% higher at 16,091 points and the S&P 500 0.5% higher at 5,096 points.
The Dow Jones finished 0.1% higher at 38,996 points.