- FTSE 100 slips 19 points at 7,933
- Commodities stocks lead risers on China data
- Manufacturing and mortgage data impresses
16.04pm: FTSE 100 to close lower
The FTSE 100 is set to close around 19 points lower at 7,933 despite having reached an intraday peak of around 8,015.
Pushing the index higher were mining companies and commodity stocks after a new set of Chinese economic data helped lift optimism surrounding the struggling nation.
Leading the charge was Fresnillo, up 8%, followed by gains from Anglo American, up 4%, and Shell and Glencore, both up 3%.
However, several consumer stocks were pushing the index lower, with Reckitt down 5% and both Entain and Ocado slipping 4%.
Despite the index ticking lower, Victoria Scholar at Interactive Investor is hopeful about the FTSE 100's prospects.
She said: "Nonetheless more positive news from China could help lift mining stocks while the recent upward trajectory for oil prices could catalyse further gains for BP and Shell, both of which would likely contribute to gains for the FTSE 100 towards that hotly anticipated record level from last year.
"This week is quiet on the corporate and economic front after the Easter bank holiday, which could mean a lack of news stories to move the index. However lighter volume weeks typically see greater volatility, which might work in the FTSE 100’s favour."
15:46pm: Gold prices hit fresh all-time high
Gold prices are at an all-time high as the prospect of an interest rate cut in the coming months grows, while geopolitical tensions in the Middle East continue to increasese.
Continuing on an exceptional run, the safe haven metal reached as high as US$2,266.85 per ounce in London deals.
Jane Foley, analyst at Rabobank said: "Gold’s historic safe haven appeal has been re-ignited by geopolitical factors which includes the current crisis in the Middle East.
"The possibility of an escalation in the Middle East given current headlines regarding Iran’s accusations of Israeli strike on a consulate building in Syria are underpinning gold prices today."
Matthew Weller at City Index added: "When interest rates fall, gold becomes relatively more attractive compared with fixed income assets such as bonds, which offer weaker returns in a lower interest rate environment.”
15.22pm: Government on standby if Thames Water collapses
The government said it is ready to step in at Thames Water if the debt-laden utility provider continues failing its customers.
Robert Goodwill, MP and chairman of the Environment, Food and Rural Affairs Select Committee said the situation of Thames Water nearing insolvency was "of considerable concern".
He said: "They are around about 80pc geared - that is like having an 80pc mortgage on your house.
"We need to ensure this company does get itself on to an even keel financially so we can move forward, but the Government is ready to step in if necessary.
"The primary role of the Government is first of all to protect customers, and secondly to protect the environment.
"I think we all realise that we need more investment in cleaning up our water now that we are testing those outpours and know what is going on."
14:34pm: US stocks open lower
US markets have opened lower on Tuesday, with the Dow Jones holding flat at 39,172.
The S&P 500 and the Nasdaq are down 46 and 220 points respectively.
Shares in Tesla opened around 6.5% lower after it revealed it had suffered its first drop in sales since the start of the pandemic, with the EV maker losing market share to rivals.
Over 386,810 vehicles were delivered by Tesla during the first quarter, down compared to Wall Street guidance of 449,080.
Meanwhile several health insurers slid after the Centres for Medicare & Medicaid Services announced payments from the government towards Medicare and drug prescriptions would rise 3.7% year-on-year - unchanged from previous plans.
Humana (NYSE:HUM) fell 10%, while UnitedHealth and CVS Heath dropped 7% and 6.5% respectively.
14:16pm: FTSE 100 loses early morning gains
The FTSE 100 has reversed all of this morning's gains and is now flat at 7,953.
It comes despite several of the mining companies benefiting from better-than-expected economic forecasts in China, with Fresnillo, Anglo American and Glencore all in the index's top risers.
Part of the slip backwards may have been caused by investors crystalising gains after the index rallied above the 8,000 mark,
Fallers included Reckitt, down 3.5%, Coca-Cola HBC, down 3%, and Land Securities, down 2.5%.
14.08pm: Rivian car sales offer surprise guidance beat
Rivian, the electric vehicle maker, has provided a well-needed positive surprise for the industry after it delivered more vehicles than it was expecting in the first quarter of 2024.
Some 13,980 EVs were made during the first quarter, against market estimates of 13,817, while its number of customers came in at 13,588, beating Wall Street's predictions of 11,893.
It follows a tough start to 2024 for the EV maker after it was forced to slash its workforce due to a decline in demand across the industry.
Fellow EV makers such as Tesla, Fisker and Canoo have all experienced the negative effects of the downturn in demand, with the latter's shares sinking around 30% after it warned revenues would be lower than initially forecast.
13.41pm: Wall Street to open lower
US stocks are scheduled to open lower on Tuesday, continuing on from Monday's losses after bond yields lifted higher and the odds weakened for a June interest rate cut.
The Dow Jones is expected to open around 278 points lower at 39,937, while the S&P 500 and Nasdaq are down 29 and 109 points respectively.
Much of the changes regarding interest rate cuts and bond yields came after the US released inflation data at 2.8%, still near December and January's 2.9% and a way off the Fed's target of 2%.
On Monday, manufacturing data showed the industry had switched to expansion after sixteen consecutive months of contraction.
David Morrison at Trade Nation added: "Much of the first quarter’s gains were built on excitement over the future of generative AI. So there are concerns that this could be a bubble that’s about to pop.
"But there’s evidence that investors are broadening their horizons, and seeking out smaller and relatively undervalued companies."
13.25pm: Shein becomes the world's largest apparel retailer
Shein is believed to have overtaken Zara to become the world's largest apparel retailer in 2023, according to GlobalData.
It comes after the Chinese fast fashion group said its profits doubled to US$2 billion in 2023, with gross merchandise value rising from US$30 billion to US$45 billion year-on-year.
Louise Deglise-Favre, apparel analyst at GlobalData, noted how Shein's "phenomenal growth" is even more impressive when considering it doesn't operate in its home market of China.
She said: "The retailer’s strength partially resides in its ability to release thousands of new items daily, ensuring it responds to trends in record time.
"It has also successfully leveraged the power of social media, benefitting from both influencer marketing and organic user-generated content, such as “hauls”, helping it to be top of mind for Gen Z shoppers."
Shein is nearing closer to an IPO and it is expected to be the largest of 2024, however, a location for its stock market debut has yet to be decided.
13.03pm: Deloitte opens new offices in London
Deloitte has opened new offices in London, two years after it shuttered its buildings, highlighting the transition from remote to hybrid working.
The Big Four Accountancy firm revealed it is now renting three floors of office space for its employees and clients in a block in Farringdon. A fourth is expected to open later this year.
Having abandoned around 250,000 square feet worth of office space in London between 2021 and 2022, Deloitte workers will now experience a 70,000-square-foot increase at the new site near its New Street Square headquarters.
“[The office] increases our overall London campus space by 18% to support our growing business and ways of working,” a spokesperson said.
Deloitte’s London campus includes three sites on New Street Square, as well as locations at Hill House, Stonecutter Court and Athene Place.
12:42pm: Thames Water to undergo last-gasp talks to avoid insolvency
Thames Water is set to undergo a last-chance round of discussions over a financial restructuring which could allow the utility company the chance to avoid insolvency.
Kemble, the group's owner, is expected to begin talks with lenders over a potential debt-to-equity swap in the hopes of avoiding a potential collapse.
Thames Water has been under the strain of a mounting debt pile since the end of the pandemic after interest rate rises meant the £18 billion it owed continued to swell.
Last week, the water provider said it would not be able to make debt repayments due next month after losing out on a £500 million rescue package from shareholders, raising the risk it may need to be nationalised.
Kemble Water said it would not pay interest payments on its debts and would not be able to repay a £190 million loan that matures on April 30 unless an extension is granted.
12.17pm: Housing sector recovery to continue, says analyst
Following the release of strong mortgage data from the Bank of England, analysts are showing confidence in the housing industry rebounding.
Martin Beck, chief economic advisor to the EY ITEM Club, welcomed reports that mortgage approvals grew for the fifth consecutive month to reach their highest levels since September 2022.
He said: "A brighter economic outlook, helped by the prospect of further falls in inflation and, relatedly, the likelihood that the Bank of England will start cutting interest rates in the next few months, should fuel a further rebound in mortgage demand and housing market activity."
However, Beck noted that the market has already priced in any upcoming rate cuts later this year, as evidenced by the average rate on new mortgages falling to a seven-month-low.
Beck added: " A move by the Bank of England will probably therefore offer more support to the housing market via boosting sentiment, rather than by prompting a further significant fall in mortgage rates."
11.56am: FTSE 100 slips back from early gains
The FTSE 100 has lost some of the early morning gains which led to it breaking through the 8,000 mark and pipping the record closing high of 8,014.
London's blue-chip index has fallen a little under 40 points from this mornings peak and is now only 24 points higher at 7,977.
Much of today's heavy lifting has been done by the mining and commodity companies after new factory data in China hinted prospects may be better than initially expected.
Leading the risers are Fresnillo, up 7%, Anglo American, up 4%, and Glencore up 3%.
Oil giants Shell and BP have also started the new financial year well, with both jumping 3%.
Pushing the index the other way is Reckitt, down 3%, and Ocado, down 2.5%.
11.38am: Royal Mail appoints Heathrow Airport executive as new boss
Royal Mail has appointed former Heathrow senior executive Emma Gilthorpe as its new boss, owner International Distribution Services revealed.
Gilthorpe, who is Heathrow Airport's current chief operating officer, will join the postal service in May, where she will undergo a transition period with interim boss Martin Seidenberg before taking the helm in the summer.
Seidenberg has been the interim boss of Royal Mail, alongside his role as CEO of the wider IDS Group, after former chief executivee Simon Thompson left in October last year.
He said Gilthorpe's appointment comes as she plans to "bring a customer and employee-centric approach to delivering Royal Mail’s transformation for the benefit of all our stakeholders”.
Seidenberg added: "It is an exciting time to be joining Royal Mail at this crucial period for the company. Royal Mail is a great British brand with a long and proud history.
"Now is the time to ensure it has a successful future too, working in partnership with our employees, customers and all our stakeholders to continue to modernise Royal Mail and deliver the high standards of service our customers rightly expect."
11.14am: Oil prices hit five-month high
Oil prices are at a five-month high after geopolitical tensions were heightened by Israel launching an air strike on Iran's embassy in Syria.
Brent futures lifted 1.6% to around US$89 a barrel, having risen around half a percent the day prior.
Israel's airstrike resulted in the death of a top Iranian military commander and led to Iran pledging to respond,
It has created concerns about the future of oil supplies.
In Mexico, the state-run oil group Pemex said it would be halting exports of its Maya crude over the coming months.
10.50am: Mortgage approvals at highest since September 2022
The number of UK mortgage approvals came in better than expected in February as they rose to their highest levels since September 2022.
It highlights the benefits of mortgage rates easing from their peaks, with new homeowners having to pay less to borrow.
Net residential mortgage approvals rose from 56,100 in January to 60,400 in February, representing five consecutive months of rises and the highest number in around a year and a half.
Net approvals for remortgaging with an alternative lender also jumped, from 30,900 to 37,700.
10.27am: Superdry plummets as take private plans collapse
Superdry PLC (LSE:SDRY)shares have plummeted more than 51% to an all-time low after it was revealed its founder would not be making an offer to rescue the business.
Julian Dunkerton, the fashion group's co-founder and chief executive, had been speaking with US investors over recent months regarding a deal to take the company private.
Shares had recieved a boost after the plans were announced, but following today's breakdown in talks the stock has slipped to 14p, the lowest price since it was listed in 2010.
Last week, Superdry said any takeover deal was "unlikely to deliver an outcome for shareholders" but would help to reignite the business and save cash.
Other plans are still being considered by Dunkerton, including the potential to underwrite an equity raise.
Superdry employs close to 3,350 workers across the globe and has around 215 stores along with several franchised stores.
9.56am: Manufacturing output grows for first time in nearly 2 years
Britain's manufacturing sector grew for the first time in close to two years after PMI figures came in better than expected in March.
The S&P Global UK Manufacturing PMI rose to 50.3 in March from 47.5 in February, beating out the market consensus of 49.9.
It represents the first time since July 2022 that the figure has ticked above the 50 mark, the level used to separate the difference between industry growth and contraction.
Business optimism regarding the year ahead is also at an eleven-month high, the survey added.
Rob Dobson, director at S&P Global, said: "Production and new orders returned to growth, albeit only hesitantly, following yearlong downturns, with the main thrust of the expansion coming from stronger domestic demand.
"Some 58pc of companies expect their output to rise over the coming year."
9.30am: FTSE 100 closing in on all-time high
The FTSE 100 has just topped its closing high of 8,014, which was achieved last February, but remains some way off its intraday high of 8,047.06.
Fuelling gains was news UK shop price inflation hit a more than three-year low of 1.3% in March, against 2.5% in February, as per figures from the British Retail Consortium.
Data from Nationwide showed house prices had continued to fall in some areas of England over the first quarter meanwhile, but were up 0.4% across the board.
9.07am: FTSE 100 leads Europe's indexes
London is leading the way in Europe, though the continent's main share indices are mostly in the green.
The Footsie is up 0.7% at 8006, with miners and oilers the main driving force. Asia-focused banks HSBC and Standard Charted are also up, following encouraging data from China in recent days, though more UK domestically aligned lenders are also firmly positive.
Over on the continent, Germany's DAX is up 0.15%, France's CAC has risen 0.3%, Spain's IBEX is just above flat and Italy's FTSE MIB just below.
The wider Euro Stoxx 600 is up 0.4% at 514.71 and the STOXX 50 up 0.5%.
“European markets have kicked off the first session of the second quarter on a positive note with the FTSE 100 leading the charge, driven by commodity stocks like Fresnillo, Glencore, Shell and BP," says Victoria Scholar, head of investment at Interactive Investor, also noting that GSK and Reckitt Benckiser are stuck at the bottom of the index.
"Oil prices continue to stage gains with WTI and Brent crude in the green after closing at five-month highs on Monday thanks to tightening supplies as well as strong US demand.
"In the US, focus is on Tesla’s quarterly deliveries - Wall Street is expecting a disappointing quarter on the back of weak demand for electric vehicles and higher interest rates. Bloomberg’s consensus is for 449,080 vehicle deliveries, down 7% from the fourth quarter. Shares in Tesla have already fallen by nearly 30% so far this year."
8.42am: Blue-chips break above psychological barrier
The FTSE 100 has broken above 8000, with a gold and silver miner top of the leaderboard as geopolitical tensions lift precious metals prices.
Up just over 50 points this morning, the index has climbed to 8,003.53, a gain of 0.64%.
Precious metals miner Fresnillo is top of the tree.
Some comment on what's driving the commodities rises, with copper and iron ore prices gaining on strong Chinese PMI data while gold defies the higher US yields and a stronger dollar to hit a fresh record of $2,264 yesterday. It retreated but is back on the up again today at $2,254.
"The price of an ounce [of gold] hit a fresh record yesterday on the back of rising uncertainties regarding the actual risk rally and the mounting geopolitical tensions after Israel has reportedly bombed the Iran embassy in Damascus," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
This has also boosted oil prices, says Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. "An Israeli airstrike on Iran's embassy in Syria, which has killed Iran’s top commander, has reignited geopolitical tensions, and squeezed the oil price higher in return.
"Brent crude is now trading at over $88 a barrel, as concerns over supply spill over into the price. At the same time, there’s little expectation that OPEC’s production policies will loosen, adding further pressure.”
Later this morning, investors will be watching German CPI data and Eurozone final manufacturing numbers.
Ozkardeskayasays says soft figures could further revive the European Central Bank doves and increase the downside pressure on the euro.
Later on, it will be US jobs and factory order data. "Job openings are expected to have further fallen while factory orders are expected to have jumped in February. Any positive surprise on both data should continue to soften the Fed doves’ hands into Friday’s official jobs data and back a further rally in the US dollar across the board," she says.
8.17am: FTSE 100 tantalisingly close to 8000 level
The FTSE 100 has shot higher in early trading, tantalisingly close to the 8,000 mark last broken over a year ago.
After a quarter of an hour, the blue-chip index had risen almost 47 points to 7,999.38.
Miners and oilers led the push higher, with commodities giant Glencore PLC (LSE:GLEN) and precious metals miner Fresnillo PLC (LSE:FRES) the top risers.
China data is a likely reason, with the Caixin manufacturing index rising to its highest in 13 months, echoing an improved reading in the weekend's official manufacturing gauge for March as both manufacturing PMIs reach positive territory for the first time since September.
"China stocks notched their biggest daily gain in a month yesterday after the latest manufacturing PMI data reinforced economic recovery hopes in the world’s second biggest economy," noted Deutsche Bank analyst Peter Sidorov.
Not far behind on the London leaderboard are Antofagasta PLC (LSE:ANTO), Rio Tinto PLC and Anglo American PLC (LSE:AAL), along with oil majors BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL).
Higher crude oil prices have lifted the latter, with Brent crude futures up 0.8% to $88.10 a barrel.
7.58am: Car dealer deal?
Car dealer Inchcape PLC (LSE:INCH) may have found a potential interested buyer in US rival AutoNation, Inc. (NYSE:AN).
In January the company said it had received "approaches from a number of interested parties" and was reviewing options for its UK retail business, potentially including a sale.
Sky News reports that AutoNation is "among the suitors circling the business" and is at the early stages of considering an offer.
Six months ago, the US group withdrew from a bidding war for Inchcape's UK rival Pendragon.
7.44: House prices still falling in parts of England
Looking deeper into the Nationwide housing market data, house prices in much of southern England continued to fall in the first quarter of the year.
Overall, prices in England in the first quarter of 2024 were up 0.4% compared with a year earlier, though this is thanks to rises in the North, North-West and London.
House prices were down most in the south-west of England, down 1.7%, followed by East Anglia, down 1.3%, the south-east outside London, down 1%, and the outer London area, down 0.6%.
However, all these regions saw declines ease compared to the sharp falls in the last quarter of 2023.
7.16am: Blue-chips called slightly higher
The FTSE 100 is predicted to inch higher as trading begins after the long Easter weekend, buoyed by more encouraging inflation data.
London’s blue-chip index has been called two points higher on Tuesday morning on spread-betting platforms, having closed the past week at 7,952.62.
US stocks had a mixed session overnight, with the Dow Jones and S&P 500 falling 0.6% and 0.2% respectively, but the Nasdaq adding another 0.1% as most of the tech lumbered higher megacaps (Apple and Tesla were the exceptions).
This morning, investors in the UK are waking up to news that shop price inflation faded to a more than three-year low last month.
Shop prices in March were up 1.3% on a year ago, according to an index compiled by the British Retail Consortium and NielsenIQ, which was down from 2.5% in February, below the three-month average of 2.2% and the lowest since December 2021.
Non-food inflation retreated to 0.2% from 1.3% a month earlier, while food inflation softened from 5.0% in February to 3.7% in March, the lowest reading since April 2022.
It was the tenth consecutive deceleration in food inflation.
Meanwhile, annual house price growth edged up in March, according to Nationwide.
UK house prices were up 1.6% compared with a year ago, compared to 1.2% in February.
On a monthly basis they were down 0.2%, however, following 0.7% growth the month before.