- Blue-chips 4 points down at 7,926
- ASOS, Boohoo agree to clarify green claims
- BP, Shell slip as oil recedes for second day
4.06pm: FTSE 100 yo-yoes late on, Flutter falls
Flutter Entertainment PLC (LSE:FLTR) looked to give up gains seen on Tuesday and some come late Wednesday, falling over 8% after its full-year report earlier in the week had enjoyed a positive reaction.
Also falling were St James’s Place PLC and Smiths Group (LSE:SMIN) PLC, down 2.6% and 2.2% respectively, with the latter also receding from gains earlier in the week.
DS Smith PLC (LSE:SMDS) and Diploma PLC (LSE:DPLM) continued to top the index’s risers, adding 10% and 9.9% respectively after each updating on plans earlier in the day which would see them taken over.
The FTSE 100 itself bounced between loss and gain-making territory meanwhile, coming to rest 4 points lower at 7,926 in late trading.
3.53pm: SSE climbs as guidance narrowed
SSE PLC (LSE:SSE) climbed 2.8% on Wednesday after tweaking full-year earnings per share guidance to 152-160p, from “more than 150p” previously.
The FTSE 100-listed energy firm said the figure, which compares to last year's 166p, reflects reduced renewable output and an adjusted operating profit of over £750 million from its gas and thermal division, against £1.24 billion previously.
Renewable output of 13% below plan marks an improvement on the 15% miss reported in the nine months to December, though.
SSE remains on track to report capital expenditure of £2.5 billion for the year, “as it continues to progress its high-quality project pipeline,” the firm said.
“In the longer term, the group continues to focus on the delivery of the investment, operational and financial growth targets,” SSE added, firming up targets for 175-200p per-share earnings by 2027.
3.35pm: CBI boss claims minimum wage boost could stoke inflation
An impending hike to the UK’s minimum wage in April threatens to drive up inflation, Confederation of British Industry boss Rain Newton-Smith warned on Wednesday.
April will see the national living wage upped from £10.42 to £11.44 an hour in the third largest increase since being introduced in 1999, following rampant inflation over the last year.
As per the CBI, low UK economic growth meant hiking wages posed a risk, with firms likely to simply pass on higher salary costs to consumers.
“When the National Living Wage increased last April nearly half of firms affected told us the pressure was so great they had to pass it on in price rises,” Newton-Smith was set to say in a speech.
“Now, more members than ever are telling us they’re worried about the increase next month.”
Her warnings come after the Bank of England forecast in February that the minimum wage increase would only push overall pay growth by 0.3%.
3.05pm: CrossCounty rail workers to strike in April
CrossCountry rail workers will walk out on strike on Saturday, April 13 in a union recognition dispute.
Some 800 employees who are part of the Rail, Maritime and Transport (RMT) union will walk out, including those in supervisory and clerical roles.
As per RMT, the company, which is owned by Arriva, has excluded the union from talks on pay and policy.
“CrossCountry’s refusal to guarantee our representation of members in negotiations is a disgrace and will not be tolerated,” RMT boss Mick Lynch said.
“Bosses cannot dictate who RMT members are represented by or be allowed to rip up long-standing agreements.
“Therefore, our whole membership in CrossCountry will take strike action on April 13 and our industrial campaign will continue until we reach a resolution.”
2.52pm: British Airways owner gains on JP Morgan optimism
Shares in British Airways owner International Consolidated Airlines Group climbed 2.3% to 169.75p on Tuesday, aided by optimistic comments from JP Morgan analysts.
Upcoming results from British Airways owner IAG could be a catalyst to spur more City analysts to upgrade earnings estimates, the bank said.
Having recently double upgraded the stock earlier this month, the investment bank told clients it was putting IAG on 'positive catalyst watch' ahead of the first-quarter update on 10 May… Read more
Also among the FTSE 100’s risers were Diploma PLC (LSE:DPLM) and DS Smith PLC (LSE:SMDS), with gains of 10.2% and 9.6% respectively after each updated on plans which would see them taken over.
The FTSE 100 itself slipped 6 points to 7,924 meanwhile.
2.37pm: US markets see mixed start to day
The Dow Jones enjoyed strong gains as Wednesday’s opening bell came and went, adding 249 points to reach 39,531.
A mixed start saw the Nasdaq down three points at 16,311 though, while the S&P 500 climbed 14 points to 5,218.
Falls on Tuesday after last week’s brushes with all-time highs had prompted speculation that further upward pressure could be expected on Wednesday morning.
However, Trade Nation analyst David Morrison noted “listless trading is likely to be a feature over the next two days as we wind down ahead of the long Easter weekend”.
Among companies, corporate uniforms and facility service provider Cintas Corp soared 10% as the markets opened, after beating estimates with a third-quarter update.
Merck & Co gained almost 4% in the meantime, following FDA approval for its Winrevair treatment for high blood pressure due to constriction of lung arteries on Tuesday.
And finally, Marvell Technology Inc was boosted over 5% as Citigroup analysts placed the firm on a 30-day catalyst watch ahead of its upcoming artificial intelligence event.
2.08pm: £3.4bn promised for Drax power station, Scotland link
A proposed 500-kilometre connection between Drax Group (LSE:DRX)’s North Yorkshire power station and Scotland will be granted £3.4 billion in funding, Ofgem has announced.
Eastern Green Link 2, dubbed the UK’s biggest-ever transmission project, will connect the biomass power plant and Peterhead in Aberdeenshire, offering power for up to 2 million homes.
Most of the cable will travel under the North Sea in a bid to harness the UK’s growing offshore wind portfolio and will aid the faster rollout of new power generation.
“To ensure we meet future energy demand and achieve government net zero targets we must speed up the expansion of the high voltage electricity network which connects consumers to homegrown energy,” Ofgem director Rebecca Barnett said.
1.35pm: Carnival hit by Baltimore bridge collapse
Carnival anticipates a $10 million financial hit from the recent Baltimore bridge collapse, the cruise line operator said in its first-quarter earnings call. The financial hit is due to Carnival having to change its homeport.
“Given the timing of yesterday's event in Baltimore and the temporary change in homeport, our guidance does not include the current estimated impact of up to $10 million on both adjusted EBITDA and adjusted net income for the full year 2024,” said management.
Financial setback aside, Carnival’s results were highly encouraging, with revenues hitting a first-quarter record of $5.4 billion alongside all-time high booking levels.
Shares were down 1.7% at the time of writing.
1.14pm: Ithaca jumps on deal to become North Sea's second-largest operator
Ithaca Energy PLC (LSE:ITH) climbed 4% on Wednesday after the North Sea firm unveiled plans to become the region’s second-largest operator through a deal with Italy’s Eni.
Under the exclusivity agreement, Ithaca would acquire Eni’s North Sea assets in return for a near-40% stake.
This includes operations in four North Sea hubs, Elgin Franklin, J-Area, Cygnus and Seagull, which produced around 40,000 to 45,000 barrels of oil equivalent a day in 2023.
This came as Ithaca unveiled a 24% fall in free cash flow to US$1.3 billion (£1.03 billion) for 2024, alongside a 10% drop in adjusted earnings before interest, taxes, depreciation, amortisation and exploration expense (EBITDAX) to US$1.72 billion... Read more
12.38pm: US markets seen higher
The Dow Jones is due to add 154 points on Wednesday’s opening bell to reach 39,834, following losses on Tuesday which pulled indexes further from all-time highs.
Futures had the S&P 500 and Nasdaq up 19 and 73 points respectively meanwhile, at 5,284 and 18,522.
“A relatively quiet US calendar will likely see traders focus on the ability of equity markets to push through after yesterday’s rebound in durable goods sent stocks lower to the benefit of the US dollar,” Scope Markets analyst Joshua Mahony noted.
This had shown durable goods orders climbing by 1.4% in February following a slump in January, signalling a recovery in business equipment investment.
Given the "short-term period of weakness" since US market’s scraped highs last week, Mahony added previous dips had “typically been viewed as an opportunity to buy”.
“With US markets expected to open in the green, the steady decline seen since Thursday's peak looks like a possible opportunity for the bulls to jump in once again,” he said.
11.47am: Chinese EVs on course to make up quarter of European market this year
A quarter of all electric vehicles sold in Europe this year are set to be Chinese-made, industry organisation Transport & Environment has said.
Following a near-one-fifth market share last year, this is set to grow still over the course of 2024, according to the group.
Though this accounts for Tesla Inc (NASDAQ:TSLA, ETR:TL0), Dacia and BMW AG (ETR:BMW) models produced in China, domestic brands such as BYD are set to make up 11% of sales this year, stretching to 20% in 2027.
This comes as the European Union mulls introducing import tariffs to work against subsidies offered to manufacturers in China.
“Tariffs will force carmakers to localise EV production in Europe, and that’s a good thing because we want these jobs and skills,” Transport & Environment senior director Julia Poliscanova commented.
“But tariffs won’t shield legacy carmakers for long. Chinese companies will build factories in Europe and when that happens our car industry needs to be ready.”
Such a tariff would stem from concerns that subsidies offered by China undercut European-made models, with the group noting a 25% tax would make the former more expensive than their European counterparts.
“It is crucial that a higher tariff is accompanied by a regulatory push to increase production of EVs, including electrification targets for company car fleets by 2030 - on top of the agreed 100pc clean car goal in 2035,” Transport & Environment added.
11.05am: German economy to stagnate this year - think tanks
Germany’s economic growth will likely remain muted throughout this year as inflation, high interest and weak exports continue to bite, economists have warned.
Europe’s largest economy could expand by just 0.1% over the course of 2024 as a result, a group of five think tanks said on Wednesday, compared to initial anticipations for 1.3%.
“Cyclical and structural factors are overlapping in the sluggish overall economic development,” Kiel Institute for the World Economy head Stefan Kooths said.
“Although a recovery is likely to set in from the spring, the overall momentum will not be too strong.”
German gross domestic product (GDP) sank by 0.3% over the course of 2023, with the figure contracting by 0.2% over the final three months of the year... Read more
10.47am: BP among fallers as FTSE 100 slips
BP PLC (LSE:BP.) emerged as one of the leading fallers on the FTSE 100 as the index shed 20 points to sit at 7,910 on Wednesday morning.
Coinciding with a second consecutive daily fall in oil prices, on the back of data showing US crude stockpiles increased, BP slipped 1.8% to 490.95p.
Flutter Entertainment PLC (LSE:FLTR) and Ocado Group PLC (LSE:OCDO) dipped 3% and 2.1% to lead the fallers in the meantime, backtracking on gains seen following reports earlier in the week.
Among risers, Diploma PLC (LSE:DPLM) topped the list with gains of 10.9% after striking a £236 million deal to acquire US-based Peerless Aerospace Fastener.
DS Smith PLC (LSE:SMDS) also enjoyed hefty gains of 7.5% following confirmation on Tuesday night that it evening that it was in talks about being bought by rival International Paper Co (NYSE:IP, ETR:INP).
9.51am: British Gas doubles chief executive’s pay
British Gas owner Centrica PLC (LSE:CNA) almost doubled chief executive Chris O’Shea’s pay packet last year, from £4.5 million to £8.2 million.
Driven largely share price-linked bonuses, the increase comes after British Gas enjoyed a tenfold increase in profit to £750 million by charging people more in bills under allowances in Ofgem’s energy price.
Centrica remuneration committee chair Carol Arrowsmith said the pay was based on previously agreed terms and pointed out the firm needed to attract high-performing leaders.
“The structure of the package was approved by our shareholders, and it is consistent with similar companies,” she added.
O’Shea himself said “you can't justify a salary of that size” while households continue to struggle with energy bills in the UK during an interview in January.
9.29am: ASOS, Boohoo will clarify green credentials - CMA
Fashion retailers ASOS PLC (LSE:ASC) and Boohoo Group PLC (AIM:BOO) have agreed to change the way environmental credentials are displayed, described and promoted, Britain’s competition watchdog has announced.
Following a probe into the pair, alongside Asda’s George brand, the Competition and Markets Authority raised concerns over greenwashing.
Changes should mean “millions of customers can expect to see clear and accurate green claims,” the authority added.
These will require firms to ensure all claims are accurate and not misleading, as well as being presented in plain language.
“Following our action, the millions of people who shop with these well-known businesses can now have confidence in the green claims they see,” CMA chief executive Sarah Cardell said.
“This also marks a turning point for the industry. The commitments set a benchmark for how fashion retailers should be marketing their products, and we expect the sector as a whole – from high street to designer brands – to take note and review their own practices.”
9.11am: Travis Perkins (LSE:TPK) boss to leave as ‘underperformance’ continues
Travis Perkins (LSE:TPK) PLC boss Nick Roberts is to stand down as chief executive of the building materials firm as tough trading conditions continue to plague the business.
Having served in the role for five years, he will step down once a replacement has been found.
“The board and Nick are aligned that now is the right time to search for a new leader to take the business forward,” Travis Perkins (LSE:TPK) said on Wednesday.
“The nominations committee is currently undertaking a thorough search process for Nick’s successor.”
This comes after the FTSE 250-listed firm unveiled a plummet in pre-tax profits from £245 million in 2022 to £70 million last year and signalled continued difficulty ahead.
“While there has been good progress made in modernising the business, the board fully recognises the under-performance of the business over recent reporting periods, in the context of continued economic challenges and end-market weakness,” chair Jasmine Whitbread added.
Shares climbed 0.8% to 732p on the news.
8.45am: The morning so far
Though not as busy on the company news front as yesterday, this morning saw a few notable developments.
S4 Capital, the advertising agency founded by former WPP boss Martin Sorrell, undershot sales targets, reporting a 2.1% decline in reported net revenue (4.5% like-for-like), closing at £873.2 million for the year ending December 31, 2023.
The group previously guided to a 4% fall in LFL revenues. Little surprise that shares were last seen 7% lower.
Gold producer Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) reported a total production of 1.1 million ounces at an all-in sustaining cost (AISC) of $967 per ounce, marking the 11th consecutive year of meeting or surpassing production guidance at an industry-leading AISC.
The group also announced the completion of an investigation after the dismissal of its former chief executive, Sébastien de Montessus.
It revealed he worked with individuals outside the company to redirect US$5.9 million to a third party, concealing his actions through false statements to the company's management, board, and auditors.
Endeavour shares were off 1.7%.
FTSE 100 distribution group Diploma PLC (LSE:DPLM) led the risers with an 11% gain after announcing the acquisition of Peerless Aerospace Fastener for £236 million.
Over in Europe, Swedish fashion giant H&M is rallying after first-quarter results showcased improved profitability despite lower sales.
Management attributed this to effective inventory management. Shares were up 14% to 175 SEK at the time of writing.
The FTSE 100 index is currently trading 19 points lower at 7,912, with no expected macroeconomic developments to move the dial.
8.30am: H&M rallies
Touching in on Europe, Swedish fashion giant H&M is rallying after first-quarter results showcased improved profitability despite lower sales.
The company reported net sales of SEK 53.7 billion (£4 billion), down 2% from the same period last year.
Yet gross profit saw a 7% increase to SEK 27.7 billion, resulting in a gross margin of 51.5%, up from 47.2%.
The operating profit for the period was SEK 2.1 billion, a significant leap from SEK 700 million last year.
Management attributed this to effective inventory management.
Online sales, accounting for about 30% of total sales, emerged as the best-performing segment.
Shares were up 14% to 175 SEK at the time of writing.
8.05am: Bitcoin falls below $70,000
Bitcoin swung lower against the US dollar in the latter half of Tuesday trades.
The benchmark cryptocurrency had climbed as high as $71,500 throughout the day, benefiting from strong gains in the previous two days, before facing sell pressure from the market.
Today, the BTC/USD pair shows little signs of life, dipping around 0.1% to $69,640 at the time of writing.
Back to stocks, and the FTSE 100 blue-chip index dipped five points to 7,925 in opening exchanges.
7.55am: Endeavour Mining posts yearly results, updates on investigation
Gold producer Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) reported a total production of 1.1 million ounces at an all-in sustaining cost (AISC) of $967 per ounce, marking the 11th consecutive year of meeting or surpassing production guidance at an industry-leading AISC.
Endeavour posted an adjusted EBITDA of $1 billion, with adjusted net earnings amounting to $230 million, or $0.93 per share.
This enabled the company to distribute $266 million in shareholder returns during the year, comprising a $200 million dividend and $66 million in share buybacks, surpassing the minimum commitment by 52%.
The group also announced the completion of an investigation after the dismissal of its former chief executive, Sébastien de Montessus.
The probe revealed that de Montessus, in collaboration with individuals outside the company, redirected a payment of US$5.9 million to a third party, concealing his actions through false statements to the company's management, board, and auditors.
Endeavour chairman Srinivasan Venkatakrishnan said: “The board’s actions illustrate the high importance we place on integrity, governance and transparency.
"We will not waver from these values. The conclusion of the investigation enables us to put this matter behind us and focus on delivery and creating value for all our stakeholders.”
Endeavour sacked de Montessus in January.
7.42am: US overnight recap
US Stocks retreated at the end of Tuesday's trading session, marking a pause in their record-breaking streak witnessed in the first quarter of the year.
The Nasdaq initially aimed for a record close but ultimately declined by about 0.4% to finish at 16,316. The S&P 500 and the Dow Jones also experienced slight dips; 0.3% to 5,204 and 0.1% to 39,282 respectively.
Economic data revealed a rebound in durable goods orders for February, alongside a notable increase in the S&P CoreLogic Case-Shiller National Home Price Index.
However, a fresh report on US consumer confidence indicated a decrease in optimism regarding the future state of the economy, with concerns arising over the declining 'Expectations Index'.
7.27am: Martin Sorrell’s S4 Capital undershoots sales target
S4 Capital, the advertising agency founded by WPP founder Martin Sorrell, reported a 2.1% decline in reported net revenue (4.5% like-for-like), closing at £873.2 million for the year ending December 31, 2023.
The group previously guided to a 4% fall in LFL revenues.
Operational EBITDA followed suit, plummeting by 24.6% to £93.7 million on a reported basis, and an even steeper 36.6% decline like-for-like when excluding the one-off benefit of £9.3 million from the significant devaluation of the Argentinian peso.
“Profitability came under pressure due to lower revenue than budgeted and significant cost reductions were made to deliver an operational EBITDA margin of 10.7%, in line with revised targets,” said the group in its earnings statement.
S4 said the margins improved in the second half, though warned that “challenging macroeconomic conditions and client caution likely to persist, despite the prospect of lower interest rates”.
7.10am: Stocks to edge higher
The FTSE 100 should open a few points higher at 7,937 this Wednesday, according to futures contracts for the blue-chip index.
Stocks ended up closing 13 points higher at 7,931 yesterday, in what was a busy session for company results, with Ocado and Flutter impressing with their sales figures.
ASOS reported an 18% fall in sales, although markets appeared unphased, pushing shares 7% higher throughout the session.
This morning is less busy, with attention shifting to cruise line operator Carnival plc’s quarterlies and Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF)’s finals.