- FTSE 100 down 44 points at 7,637.
- Rolls-Royce to expand submarine arm.
- Rumours swirl ahead of Wednesday's Spring Budget.
4.06pm: FTSE 100 heads lower late on
London’s lead index sat 49 points off the day's open at 7,633 come Monday afternoon, with Ocado, Entain and St James’s Place all suffering hefty losses.
Ocado sat 8.5% lower, adding to declines seen late last week after the grocery delivery firm reported a £340 million full-year loss and got into a spat over performance-linked payments with joint venture partner M&S.
News that St James’s Place faced some 15,000 claims that it overcharged on annual reviews of people’s investments that never took place saw the wealth manager slip 4.5%.
Entertain sat 6.5% lower ahead of its full-year results on Thursday and following news last week that the UK government will introduce laws in September limiting the amount that can be on online slots.
Endeavour Mining, BT Group and Melrose were among the FTSE 100’s main risers meanwhile, climbing 3%, 2.2% and 1.9% respectively.
3.45pm: Energy windfall tax to be extended in Spring Budget
Chancellor Jeremy Hunt is reportedly poised to extend the windfall tax on energy companies by a year in next Wednesday’s budget.
The energy profit levy, which was introduced in May 2022, could now run until 2029 as a result, according to Reuters-cited sources.
Energy firms had initially been taxed 25% of their profits before Hunt lifted the levy, which came after a surge in fuel prices following the outbreak of war in Ukraine, in November 2022.
North Sea oil and gas companies have been left paying 75% in tax since, with electricity generators also being charged 45%.
Hunt also extended the levy’s end date from 2025 to 2028 in November 2022.
3.32pm: Prime minister says UK economy on ‘right track’ ahead of budget
Prime minister Rishi Sunak has said the UK is getting “on the right track” just days before his chancellor, Jeremy Hunt, will deliver the Spring Budget in Parliament.
Speaking at a former Honda factory in Swindon, Sunak said Wednesday’s budget, which is widely expected to include tax cuts, would be “prudent and responsible”.
His comments came as he visited and discussed the factory’s conversion into a logistics site by developer Panattoni.
“It shows that the work we're doing to get the economy on the right track is paying off," he said.
“Now, I'm determined, as prime minister, to make sure that the UK is the best place in the world to invest and grow a business like this.”
Expectations are that the government is mulling a range of cuts to the likes of national insurance in the budget, which is set to be its last before the next general election over the coming year.
3.02pm: St James’s Place slips as overcharging claims mount
St James’s Place PLC fell 4.4% on Monday after it emerged that the wealth manager faces more than 15,000 claims that it overcharged on annual reviews of people’s investments that never took place.
Bolton-based AMK Legal has filed the claims over the last three months, as per The Sunday Times, with around £12 million on behalf of 4,000 clients having already been won.
The news comes after St James’s Place said last week that £426 million had been set aside to cover the claims, alongside their admin costs, against it.
Such provision has been made for cases from between 2018 and 2023, though AMK told The Sunday Times it was seeking compensations dating back to incidents in 2013.
“We are hoping that the Financial Conduct Authority and SJP see sense on this and offer redress to anyone that has paid fees since 2013 and not had an annual review,” Michael Jordan, from the law firm, commented.
Shares slipped 4.4% to 489.20p.
2.03pm: Nikkei record high prompts debate over Japanese economy
Japan’s Nikkei closed above the 40,000 mark for the first time on Monday, adding to hopes that the economy could finally be emerging from years of stagnation.
At 40,109, the index closed Monday at a record high, aided by strong gains on Wall Street late last week and a surge in technology firms, including Tokyo Electron and Advantest (NYSE:ATE).
The gains helped take the index 20.5% higher for the year so far and added to speculation that the Bank of Japan could finally revert on negative interest rates, introduced in 2016 to battle against deflation.
Danske Bank analysts noted the index’s rise had, in part, been fuelled by the loose monetary policy, which, at -0.1%, effectively sees borrowers paid to take out loans.
A cheap Japanese yen is also said to be responsible, given exports are “cheaper and more attractive to overseas buyers,” Trade Nation analyst David Morrison explained.
As per domestic news agency Kyodo, over a year of price rises above the Bank of Japan’s 2% target could also see a formal end to deflation declared.
This would almost certainly be met with an end to negative interest rates, analysts added, with a talk on Tuesday by the central bank’s chair, Kazuo Ueda, set to provide clues.
Whether the positive sentiment on both the stock market and rising prices actually translates to a turnaround from several decades worth of stagnation for the Japanese economy remains up in the air though, according to AJ Bell’s Russ Mould.
“The push for the index to new all-time highs is undoubtedly a key milestone but whether it truly marks an end to more than three decades of stagnation is still up for debate,” he said.
“One swallow doesn’t make a summer and the fact it has taken since 1989 for the index to claim a new record high is probably cause for some reflection rather than outright celebration.”
1.24pm: Extended OPEC+ cuts fail to buoy Oil prices
Oil prices slipped on Monday despite an announcement from OPEC+, led by Saudi Arabia and Russia, that production cuts would be extended further into this year.
West Texas Intermediate fell 0.5% to US$79.59 a barrel on Monday following the news on Sunday, while Brent Crude slipped 0.5% to US$83.27.
A roughly 2.2 million barrel-per-day cut, which has been agreed in November, will be extended through to the end of June.
Saudi Arabia will keep its cuts of 1 million barrels per day in place as part of the move, while Russia will cut exports by 471,000 barrels each day in a surprise move that could inflate prices further, according to analysts.
1.11pm: Apple hit with €1.8 billion EU fine
Apple has been hit with a €1.8 billion fine by the European Union over supposed abuse of its dominant position in the music streaming market.
“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store,” EU competition chief Margrethe Vestager said on Monday.
“They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem.”
The EU ordered Apple to stop preventing rivals, such as Spotify, from telling users of cheaper deals away from its App Store.
Spotify had been among several music streaming firms to complain over the practice in recent years.
Apple said it would appeal the decision, adding in a statement that regulators did not “uncover any credible evidence of consumer harm, and [ignored] the realities of a market that is thriving, competitive, and growing fast”.
12.54pm: US stocks called lower
The Dow Jones is expected to open lower in a mixed start for Wall Street on Monday as investors gear up for a heavy week of macroeconomic news.
Futures had The Dow Jones Industrial Average at 39,041 on Monday morning, down 101 points, while the S&P 500 was seen 5 points lower at 5,140.
The Nasdaq Composite is expected to open in the green meanwhile, with the index sitting 16 points higher at 18,347 in futures trading.
In the US, key jobs data is due to be released on Friday, though Wednesday’s Spring Budget in the UK and interest rate decision by the Bank of Canada, followed by the European Central Bank’s own call on Thursday will give traders lots to mull over before then.
“All that matters to the market, it seems, is the timing of the first rate cut and how far they expect to go with policy easing,” Finalto analysts commented.
12.14pm: Rolls-Royce submarine arm to add jobs on back of AUKUS deal
Rolls-Royce is to add some 200 jobs in its submarine division as it prepares to fill new orders under a partnership between the UK, US and Australia.
Based in Cardiff and Glasgow, the roles will centre around the likes of engineering and cyber security, according to Rolls-Royce, which builds power units for the UK’s nuclear submarines.
They will add to the division’s 4,000-strong workforce as it looks to fill orders through the AUKUS deal, which will see the UK and US aid Australia in acquiring nuclear submarines for the first time
“From our commitments to maintaining the UK’s nuclear deterrent through our deliveries into the Dreadnought programme, to increased demand as a result of AUKUS, this is a time of unprecedented growth for our business,” Rolls-Royce Submarines president Steve Carlier said.
“To help us succeed we want to attract the brightest and best from across the UK to help us build a better world with nuclear.
“The work secured from recent announcements will see us support UK and Australian submarines well into the second half of this century, so there has never been a better time to join our industry.”
Rolls-Royce climbed 0.75% to 377.60p on the news.
11.53am: Spring Budget stamp duty cuts on the cards - analyst
Landlords and developers will unlikely “see much in their favour” in Wednesday’s Spring Budget as Jeremy Hunt looks to attract votes from the masses faced with high rents and mortgage rates, ASK Partners chief executive Daniel Austin has said.
“We hope to see a long-term plan for new homes, including social housing, however, we expect we will see more short-term fixes,” he commented ahead of the statement.
A stamp duty holiday or reprieve may be among the tools Hunt uses to attract votes from buyers, Austin forecast.
Developers will likely be hoping for eased regulation on building at brownfield sites, meanwhile, he said.
“The government will be faced with a challenge - striking a balance between trying to increase housing supply and therefore affordability by supporting developers and private landlords, but appealing to voters who do not want to see greenfield development.
“The planning system remains hotly political and as a result, landlords and developers are unlikely to see much in their favour.”
11.27am: Vertu Motors gains as second-hand car market steadies
Vertu Motors (AIM:VTU) shares ticked up 1.6% after reassuring investors that used car prices had now normalised following hefty falls since October.
“We are back to a sensible used car market,” the car dealer's chief executive, Robert Forrester, said in a call after the firm reported on Monday.
For the five months to January, the AIM-listed firm reported a 7.8% increase in like-for-like revenue, after successfully increasing used-vehicle stock-turn and reducing inventory to “adjust for the changing market”.
Net debt for the year to February will come in lower than expected at £60 million to £65 million as a result, Vertu said.
This was as the new car market in the UK contracted overall, Vertu added, leaving manufacturers offering the likes of discounts to stimulate demand.
Shares climbed 1.6% to 68.60p.
11.01am: Renalytix soars on takeover bid
Kidney disease diagnostic firm Renalytix PLC (AIM:RENX) soared almost 70% on Monday morning after announcing a possible takeover approach.
AIM-listed Renalytix said on Monday that a “large and well-capitalised publicly listed strategic diagnostics company” had made an unsolicited approach.
This is as the firm evaluates acquiring Renalytix’s entire issued and to-be-issued share capital, the company said, which has itself kicked off a formal sale review.
“The formal sale process will enable the board and its advisers to conduct an orderly process and engage more widely with all potentially interested parties,” Renalytix said.
Shares jumped 67.5% to 67.00p.
9.56am: Ocado, Rightmove lead fallers
Ocado and Rightmove headed up the FTSE 100’s big fallers on Monday morning, extending losses seen late last week on the back of mixed updates.
Online grocery delivery firm Ocado was down 3.3%, after having reported a £340 million loss late in the week.
Rightmove slipped 2.7% meanwhile, as pressure remained on the property website following its own warning of a fall in traffic on the back of weakness in the housing sector.
Mondi also declined by over 2% come mid-morning, while miners Fresnillo and Endeavour led the index’s risers with gains of over 2% each respectively.
The FTSE 100 itself sat little changed as Monday brought little in the way of corporate news. At 7,666, the index had fallen 15 points.
9.40am: Rail fare hike sparks backlash
Rail fares were increased by 4.9% over the weekend following the Department for Transports announcement last December, prompting a wave of backlash and criticism.
Railfuture chair Chris Page commented: “Why are rail passengers being punished year after year with inflation-busting fare rises?
“No matter that there's a cost-of-living crisis, no matter that we're facing a climate emergency, the government seems more determined than ever to price us off the railway and onto the roads.”
Average season ticket prices for lines into London, taken from 40 separate routes, have risen by £248 to £5,300 as a result of the hike.
Prices of some peak return tickets on long-distance routes and flexible tickets around the likes of cities have also jumped on the back of the move, which takes the UK’s ticket prices further ahead of the rest of Europe, as per Sky News.
“This fare rise will be tough for passengers to stomach given the shocking state of rail services up and down the country,” Labour's shadow transport secretary Louise Haigh said, meanwhile.
9.10am: Ryanair, Wizz Air see stronger February
Ryanair and Wizz Air have both announced stronger passenger figures for February, partially thanks to the month’s extra day.
Some 11.1 million people travelled with Ryanair over the month, up 5% on last February, with load factors remaining the same at 92%, the airline reported on Monday.
Wizz Air unveiled a 16% increase in passengers to just shy of 4.4 million meanwhile, but saw a 3.3% fall in load factors to 90%.
According to Liberum, the reallocation of jets due to the Israel-Hamas conflict and fewer groundings than expected from inspections of Pratt & Whitney engines bumped capacity up for Wizz.
For Ryanair, passenger numbers could have increased by closer to 1% when accounting for the month’s 29th day, analysts said.
Wizz shares fell 1% to 2,212p on the news, while Ryanair sat flat at €19.92.
8.56am: The morning so far
In a barren day for macroeconomic news, the FTSE 100 opened virtually unchanged from Friday’s close.
By the first hour, the lead index had shed around 29 points to trade at 7,662.
The market remains preoccupied with the upcoming Spring Budget, which is due on Wednesday.
Over the weekend, Chancellor Jeremy Hunt said he will earmark £800 million for technology reforms aimed at freeing up NHS and police time, with plans involving AI to reduce NHS waiting times and drones to attend road accidents.
On the company news front, British insurance big cap Aviva is set to enter the Lloyd’s insurance market with the acquisition of Probitas for a £242 million consideration.
Aviva will acquire Probitas's fully-integrated Lloyd's platform, encompassing its corporate member, managing agent, international distribution entities and tenancy rights to Syndicate 1492.
"This acquisition is another step in our strategy to invest in Aviva's future profitable growth,” said Aviva’s chief executive Amanda Blanc.
Safety equipment group Halma PLC (LSE:HLMA) announced its acquisition of Dutch group Rovers Medical Devices for €85 million (£73 million).
Rovers designs and manufactures sample collection devices used in the prevention and diagnostics of cervical cancer, including cornerstone cervical cancer screening device Cervex-Brush.
In the cryptocurrency markets, Bitcoin (BTC) continues to reach for its all-time high, adding another 2.6% against the US dollar this morning.
The BTC/USD pair is currently swapping for $64,800- another 6.5% higher and it will smash the previous ATH of $69,000 achieved in November 2021.
8.44am: AI and traffic drones in Spring Budget
Wednesday’s Spring Budget will provide £800 million set aside for technology reforms aimed at freeing up NHS and police time, the Treasury has announced.
Speaking over the weekend, Chancellor Jeremy Hunt called it part of a “public sector productivity drive”.
Under the plans, artificial intelligence technology will be used to attempt to cut down NHS waiting times by a third, and drones will be deployed by the police services to attend to road collisions.
Speaking to the Sunday Telegraph, Hunt said it will be a Budget “where we stress... the importance of being responsible with the country's finances, because it's fundamentally unconservative to fund all the things that you would like to do by borrowing money for future generations”.
"There is too much waste in the system and we want public servants to get back to doing what matters most: teaching our children, keeping us safe and treating us when we're sick," said Hunt.
On today's markets, the FTSE 100 was last seen 22 points lower at 7,659.
8.28am: Bitcoin continues to pop
Bitcoin (BTC) continues veering towards its all-time high, with another 2.6% added against the US dollar this morning.
The BTC/USD pair is currently swapping for $64,800- another 6.5% higher and it will smash the previous ATH of $69,000 achieved in November 2021.
The benchmark cryptocurrency has catapulted higher this year predominantly due to the introduction of spot-bitcoin exchange-traded funds to the regulated US stock market.
New bitcoin ETFs from the likes of BlackRock and Fidelity have seen substantial cash inflows, creating a groundswell of demand for the cryptocurrency.
Back to the London markets and the FTSE 100 was last seen 16 points lower at 7,666. There is little to push the needle today, with an empty macro calendar before Wednesday's highly anticipated Spring Budget (see a recap below).
8.03am: Spring Budget recap
Coming this Wednesday, the Tory cabinet’s (probably) last budget before the next general election is the biggest event on the macro calendar for the month, if not the year.
Government-backed 99% mortgages have already reportedly been scrapped, but a lot still hangs in the air.
National Insurance could be lowered, welfare support could be increased, non-doms for millionaires could be scrapped, inheritance tax could be reduced, as could ISA allowances, while income tax allowances could be increased.
Chancellor Jeremy Hunt has a tightrope to walk- to shore up election support, he will try his best to give voters what they want while sticking to the Conservative principles.
Today, the FTSE 100 lead index opened effectively unchanged from Friday’s close at 7,677.
7.47am: Halma broadens cancer diagnostics offering with Rovers acquisition
FTSE 100-listed safety equipment group Halma PLC (LSE:HLMA) has announced its acquisition of Rovers Medical Devices for €85 million (£73 million).
Dutch group Rovers designs and manufactures sample collection devices used in the prevention and diagnostics of cervical cancer, including cornerstone cervical cancer screening device Cervex-Brush.
Rovers' unaudited revenue for the last financial year was €12.0 million, with Return on Sales more than double Halma's target range of 18-22%, according to the press release.
"Rovers will broaden the range of markets we serve in women's health and further strengthen our Healthcare sector's position in cancer diagnosis products,” said Halma’s chief executive Marc Ronchetti.
He continued: “We are excited by the opportunities we see to increase Rovers' positive impact on public health.
“We expect its future growth to be driven by increasing global cervical screening rates, supporting the World Health Organization's strategy to accelerate the early detection of cervical cancer."
7.24am: Aviva enters Lloyd's market
British insurance big cap Aviva has set its sights on the Lloyd’s insurance market with the acquisition of Probitas for a £242 million consideration.
The ‘Lloyd’s market’ refers to Lloyd's of London, a syndicate of insurers and reinsurers that underwrite risk on complex insurance products.
Aviva will acquire Probitas's fully-integrated Lloyd's platform, encompassing its corporate member, managing agent, international distribution entities and tenancy rights to Syndicate 1492.
"This acquisition is another step in our strategy to invest in Aviva's future profitable growth,” said Aviva’s chief executive Amanda Blanc.
“Aviva's presence in the Lloyd's market opens up new opportunities to accelerate growth in our capital-light General Insurance business."
7.08am: Little changed on the lead index
The FTSE 100 is expected to kick the week off little changed from Friday’s solid performance.
Futures contracts have the lead index opening 15 points lower at 7,675.
The macroeconomic calendar is also barren, though with the Spring Budget due on Wednesday, conversation and market speculation won’t be lacking.
Annual results are shortly due for Clarkson PLC (LSE:CKN), Globaldata plc and Quartix Technologies.