- FTSE 100 falls 8 points to 7926
- US market boosted by soft PMI data
- Semiconductor factories shut after Taiwan earthquake
16.01pm: FTSE 100 to close flat
London's blue-chip index is on track to close flat on Wednesday, having been down around 25 points for much of the day.
However, some softer-than-expected US PMI data has helped lift indexes on both sides of the pond and the FTSE 100 is currently around 8 points lower at 7,926.
In equities, mining group Fresnillo has been leading the top risers, jumping 3.5% on the back of a rosy set of data from China on Tuesday.
Other risers include lenders such as Barclays, up 2.5%, and NatWest and Standard Chartered, both of which are up 2%.
Tumbling the other way was BT Group, down 4.5%, with Prudential and RS Group both slipping 3%.
15.37pm: UK markets await Thursday's PMI data
While markets are experiencing a slight boost on the back of soft PMI data in the US, investors in the UK will be turning their attention to service data which is due tomorrow.
Preliminary forecasts showed services PMI slipped lower from 53.8 in February to 53.4 in March, lower than the market's consensus of 53.8.
Economists expect the final figure to be 53.4, but any surprises could affect the market, with signals of a stronger or weaker economy paving or blocking the way for an interest rate cut in summer.
March's slowdown represents the weakest month of growth in 2024, much of which has been attributed to tighter disposable incomes for households.
The FTSE 100 is down 11 points at 7,923 in preparation for said results.
15.23pm: US stocks rebound as service sector slows
Wall Street has rebounded, with all three main indexes trading higher, after the service grew at a slower rate than economists had predicted.
The ISM Services PMI came in at 51.4 in March from 52.6 the month prior, and down against forecasts of 52.7.
While the data revealed the weakest rate of growth in the services sector this year so far, the markets have welcomed the findings.
On Monday, stronger-than-expected manufacturing figures showed there was strength in the US economy, which sent the market lower as investors began to worry about the potential of a later rate cut.
However, today's findings have slightly reversed this sentiment. However, eyes and ears will be firmly focused on Jerome Powell's speech later today (5.10 pm GMT) for any hints on rate cut plans.
The Dow Jones is up 96 points at 39,266, while the Nasdaq and S&P 500 have risen 51 and 17 points respectively.
The FTSE 100 also recieved a lift and is now 6 points lower at 7,928.
14.55pm: Barclays shareholders to vote on bigger banker bonuses
Barclays wants to pay its bankers bigger bonuses now that a cap has been removed by UK regulators.
Shareholders will vote at the lender's AGM on May 9 over whether to give its remuneration committee the power to raise bonuses paid out to its top-paid workers, who are known as "material risk takers" and are paid an annual salary of more than €1 million.
Last year, UK regulators removed a cap which was imposed after the 2008 financial crash which limited the bonuses bankers could earn to twice a worker's base salary.
Barclays waited to follow the UK regulator's decision, claiming it would wait and review the plan in 2024.
Executives who want to see a greater rise in their bonuses will have to wait until 2026, when shareholders will vote on a similar resolution.
14.37pm: Wall Street ticks lower
Wall Street has opened lower as all three main indexes continue to suffer from a sharp sell-off and macro data which indicates the US is recovering well.
The Dow Jones opened 30 points lower at 39,140 while the S&P 500 and the Nasdaq fell by 2 and 42 points respectively.
While much of the market's focus will be on comments from Fed chair Jerome Powell during his speech later today, there has been slight movement in equities.
Intel slumped more than 6% after it revealed it had suffered a growing operating loss within its semiconductor manufacturing division.
Both Paramount and Tesla have kept flat despite the two entering important points in their histories.
For Paramount, reports have indicated it has entered into an exclusive sale discussion with media company Skydance.
Meanwhile, Tesla, a day after it reported a sales miss, has been downgraded by both Guggenheim and Deutsche Bank over the weakness of its operations.
13.59pm: US job growth beats out expectations
The number of new jobs in the US private sector rose by more than analysts had initially expected in March, data from ADP revealed.
A better-than-expected payrolls report adds to a string of data which indicates the US industry is going from strength to strength.
Some 184,000 new jobs were added to the sector in March, beating out Wall Street's estimates of a 148,000 rise.
Nela Richardson, ADP’s chief economist, said: "March was surprising not just for the pay gains, but the sectors that recorded them.
"The three biggest increases for job-changers were in construction, financial services, and manufacturing.
"Inflation has been cooling, but our data shows pay is heating up in both goods and services."
13.38pm: US markets to open lower
Wall Street is set to open slightly lower on Wednesday ahead of Fed chair Jerome Powell's speech at Stanford later today.
The markets are expected to listen closely to what Powell has to say regarding interest rate cuts and whether plans for a first in summer have been scrapped.
It come after Monday's strong ISM Manufacturing PMI figures highlighted that the US economy is "booming" and therefore may not need a rate cut in June.
David Morrisson at Trade Nation said: "Later today we get an update on the services side of the US economy with the release of the ISM Services PMI. The sector continues to show modest expansion. But if that also shows a sharper-than-expected pick-up, then yields could have further to rise."
The Dow Jones is set to open around 13 points lower at 39,506, while the S&P 500 is scheduled to begin trading around 4 points lower at 5,258.
The Nasdaq is also looking likely to open lower, around 34 points weaker at 18,323.
13.18pm: FTSE 100 keeping lower
The FTSE 100 is keeping lower this afternoon as the prospects of an early interest rate cut begin to weaken.
London's blue-chip index is around 24 points lower at 7,911, representing a quick and sharp fall back from yesterday's intraday peak of 8,015.
Federal Reserve chair Jerome Powell will speak at Stanford later today, and both the UK and US markets could jump or fall based on what he says about inflation and his plan for rate cuts.
In equities, it has been a quiet day for the blue chips, with all constituents falling to break away higher.
Top risers include M&S, up 2%, while Standard Chartered and Fresnillo are both up around 1.5%.
The index's top fallers are experiencing a similarly quiet day, with BT Group, down 4%, the only company to have slipped more than 2%.
12.49pm: Taiwan Semiconductor closes factories after earthquake
Taiwan Semiconductor Manufacturing Co (TSMC), the main contract chipmaker for Apple and Nvidia, has been forced to close its factories in its home country after it was hit by an earthquake overnight.
Facilities used by TSMC have been evacuated and some manufacturing has been paused while the company assesses the damage from the biggest earthquake in Taiwan in 25 years.
Taiwan is a key manufacturer of semiconductors, with their uses helping all manners of devices from iPhones to modern vehicles.
Large tech companies often outsource production to companies based in Taiwan, but the market appears to have shrugged off any concerns.
Both Nvidia and Apple are set to begin trading flat when markets in the US open at 2.30pm GMT.
Shares in TSMC are down a little over 1%.
12.21: Royal Mail's three-day service "completely unpalatable"
Royal Mail is hoping to only have to deliver second-class post three times a week as a result of fewer letters being sent.
However, this proposal has already been met with pushback from the greeting cards industry.
Amanda Ferguson, the chief executive of the Greetings Card Association, says "the idea of a three-day per week [service] is completely unpalatable to our customers and wider industry”.
Bulk business mail, which includes bank statements, bills and tax returns, is expected to take three working days rather than two as a result.
First class post would still be delivered six days a week, while separate talks are taking place with the NHS to decide a plan for distributing time-sensitive medical letters.
11.48am: Oil prices hold at five-month highs
Oil prices are holding tight at around a five-month high, with Brent crude up around 0.3% to over US$89 per barrel on Wednesday.
Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics said: "Looking ahead, the rally in oil prices now point to upside risks in energy inflation, especially in May, June and July due to base effects."
Recent rises have come ahead of a review by the Opec cartel, which experts believe could result in supply cuts.
Opec and its allies will meet online to review the crude markets and scrutinise supply policy.
Officials from nations involved in the cartel believe the policy will be kept the same.
Oil giant Shell is up 0.5% to 2,730p as a result, while BP has remained unchanged.
11.24am: Whats next for Bitcoin?
Bitcoin has started 2024 extremely well, and after ETFs were approved, the currency has jumped 50% whilst also reaching new all-time highs.
Today, the world's largest cryptocurrency is up around 1.5% at US$66,371.
However, questions over its volatility, the upcoming halving event and the dangers of deregulation have lingered in recent months.
ETC Group's Tim Bevan believes many of these issues are the result of macroeconomic factors and specific market events.
He sat down with Proactive's Stephen Gunnion to discuss these talking points surrounding the crypto market.
11.00am: Small caps to disappear from London by 2028
Small-cap companies could be wiped from London stock exchanges by as soon as 2028, broker Peel Hunt warned.
Over the past two years, the number of companies listing in London has drastically fallen, while the pace of those leaving the exchange has been "relentless" in the opinion of the City broker.
Since 2018, the number of companies listed on the FTSE Smallcap Index, which covers any business not in the FTSE 350, has dropped from 160 to 114.
Should this trend continue, the last company will leave in four years.
Charles Hall, head of research at Peel Hunt, said: “The pace of de-equitisation is relentless and will inevitably continue given the low valuation accorded to UK companies.”
10.37am: Chances of European rate cut in June grow
While UK inflation data isn't due for a couple of weeks, today's focus has switched to fellow European countries and how they are dealing with slowing the rise of prices.
In the Eurozone, preliminary estimates indicated inflation slowed to 2.4% in March from 2.6% in February.
It means prospects for an early rate cut have grown, with the European Central Bank edging closer to its target of 2% inflation.
"We expect policymakers to leave rates unchanged next week but begin cutting them in June," said Andrew Kenningham at Capital Economics.
Meanwhile in Turkey, March's inflation figure was a tad stickier, after it rose to 68.5% from 67.07 % in February.
Headline interest rates sit at 50% - the highest in over two decades - as the country's central bank continues to implement a strict policy to curb spending.
9.56am: Renishaw buyout hopes dashed
Renishaw, the FTSE 250 engineering group, is trading more than 4% lower after Siemens denied plans of a takeover.
Reports claimed the German conglomerate had placed Renishaw at the centre of its takeover plans, but after a company statement today any rumours have been kyboshed.
Russ Mould at AJ Bell is convinced that despite the rejection, the precision engineer remains "a prime takeover candidate."
He said: "Renishaw ticks the right boxes to be a bid target. Its fortunes are heavily tied to the semiconductor industry where the prospects are improving after a year of oversupply.
"Furthermore, 52.8% of the company is owned by Renishaw’s co-founders David McMurtry and John Deer, both of whom are in their 80s and want to sell down their positions."
However, Mould notes the difficulties of the group's previous sale attempt back in 2021 after its owners hoped to find a buyer who "respected the heritage and the culture".
"Keeping things ‘the Renishaw way’ might have been a hurdle that many didn’t want to clear. Perhaps there needs to be a degree of flexibility on this front if they want a deal to succeed,” the investment director added.
9.38am: Virgin Airways to return to a profit
Virgin Airways is en route to swing back to a profit this year after bringing in record revenues.
Total sales reached £3.1 billion in 2023, up from £265 million the year prior. Meanwhile, underlying profits surged to £352 million.
Losses before tax and exceptional items improved from £206 million in 2022 to £139 million last year.
It represents a significant step as the group hits the midway point in its four-year turnaround plan.
Shai Weiss, the airline's chief executive, said: "In 2023, we capitalised on continued strong demand for leisure air travel and holidays, which shows that desire for experiences and travel remains, resulting in record revenues.
"A loss is never satisfactory; however, our performance and results illustrate that we have made really good progress in 2023, the plan is working, and Virgin Atlantic is on course to return to profitability in 2024."
9.18am: Nationwide branch ad banned
A Nationwide advert taking a dig at other banks for closing branches has been banned.
After receiving 282 complainants, including one from rival Santander, the Advertising Standards Authority decided to ban the advert featuring Dominic West.
Dominic West in the ad
The ASA claims the advert misled customers into believing that Nationwide, unlike its rivals, was not closing branches.
Nationwide has closed 152 branches over the last ten years, including two last year. "We considered that was a significant number," the ASA explained.
Nevertheless, Susannah Streeter at Hargreaves Lansdown has been able to see the positives.
Streeter said: "The old adage all publicity is good publicity though, probably still rings true for this stunt.
"The Building Society has jumped on the opportunity to shine another light on its pledge promise not to close branches, which has been extended until 2028."
9.02am: Chance for the FTSE 100 to shine?
The blue-chips and mid-caps are continuing to extend their losses, now down 0.5% and 0.4% respectively.
"It’s been an inauspicious start to the second quarter for global stocks, after a stunning rally in the first three months of the year," says Kathleen Brooks, market analyst at XTB.
"The markets are contending with high valuations, second thoughts about interest rate cuts, high commodity prices and some key economic data releases coming up later this week."
Brooks says it could be the FTSE 100’s time to shine.
"The FTSE 100 had a day of two halves on Tuesday. It surged to a record above 8,000 before selling off later in the session along with other global indices. However, it was the strongest performer in the European space, and after a lackluster performance for the UK index in Q1, now might be the time for the FTSE 100 to play catch up.
"Risk sentiment is shaky at the start of Q2, and this is perfect for an index like the FTSE 100 that has defensive qualities. As other indices get weighed down by their growth stocks that suffer when rate cuts are priced out of the market, the FTSE 100’s lack of exposure to growth works in its favour.
"Added to that, the oil price is surging. Brent crude is now less than $1 away from $90 per barrel and is at its highest level since the end of October."
She notes that the energy sector was higher by more than 3% on Tuesday, as the index broke above a fresh record high, with rally was led by Rio Tinto, Shell and Anglo American, as miners and oil companies dominated. BP was also a top performer and rose to its highest level since October.
Elsewhere, she notes that despite the strongest earthquake in 25 hitting Taiwan, the local stock index has mostly shrugged off the news about this natural disaster, and is down 0.6%, one of the better performers in the Asian equity space on Wednesday.
8.24am: FTSE 100 falls at open
The FTSE 100 has opened in the red, as predicted, with some analysts saying the earthquake in Taiwan has further rattled markets.
London's blue-chip benchmark has dropped 27 points or 0.36% to 7,903, with the FTSE 250 also down 0.2% to 19,670.
AstraZeneca PLC (LSE:AZN) is leading the fallers on the main index, down 1.3% and echoing falls seen on Wall Street overnight.
This follows surprise news that federal payment rates to Medicare insurers next year will be lower than analysts predicted.
Other fallers in London include Howden Joinery PLC, down 1.4%, presumably on the back of the warning from sector peer Topps Tiles of worsening sales and higher operating costs. Topps fell 7%.
Housebuilders are prominent among the fallers for a second day.
Taking a wider view, European markets are mixed, while Asia is mostly in the red.
Analyst Susannah Streeter at Hargreaves Lansdown says: "The Taiwan earthquake has turned markets more skittish, with investors already unnerved by data pointing to inflation staying stubborn in the US.
"The Nikkei fell to its lowest level in two weeks, following a tsunami warning for Japan’s Okinawa island prefecture.
"It looks set to be hard going for the FTSE 100 to regain its recent mojo and head back towards breaching record levels. After cantering past the psychologically important 8000 mark on Tuesday, the index lost ground and is set to struggle to find form as uncertainty grips investors.
"Setting a fresh all-time high remains frustratingly elusive, despite the uptick in crude prices, which are set to benefit energy giants."
7.59am: Wizz Air passenger numbers boosted by return of Israel flights
Wizz Air Holdings PLC (AIM:WIZZ) has reported a jump in passenger numbers in March, boosted by the relaunch of flights to Israel.
Almost 4.8 million people travelled with the airline over the month, marking a 12% increase year on year, Wizz said in a statement.
Flights to Tel Aviv, Israel restarted from six bases in the meantime, with further routes set to reopen in April, May and June.
These had been shut in early October after the outbreak of the Israel-Hamas war, which Wizz said accounted for around 6% of its capacity at the time.
7.49am: Topps Tiles cracks widen
Some company news from Topps Tiles PLC (LSE:TPT), which has reported a 5.9% decline in total sales in the first half and an 11.3% decline on a like-for-like basis in the second quarter, following a decrease in footfall in its stores.
In a trading update for the 26 weeks to the end of March, the tiles retailer pointed to persistently subdued demand in the domestic repair, maintenance and improvement (RMI) sector, which should not be too much of a surprise to investors who've also been following news from Travis Perkins and Kingfisher in recent weeks.
Gross profit margins improved year-on-year as cost of goods pressures continued to ease, but net profits were impacted by lower sales volumes and operating cost inflation.
Topps said profitability in the first half will also be impacted by factors including the timing of the holiday pay accrual and seasonally higher energy usage, with full-year profits expected to be weighted towards the second half, as it said in its January update.
7.32am: Why financial markets are selling off
Some comments and explanations on what's happening in markets from the Deutsche Bank macro strategy team.
Calling it a "rocky start to Q2" yesterday, they note that both bonds and equities have been selling off for two days running, "driven by a succession of hawkish developments, which have led to growing questions about how soon the Fed will be cutting rates, particularly given the resilience of both growth and inflation".
Today that means traders and investors will be listening out for Federal Reserve chair Jerome Powell’s remarks today, who’s giving a speech on the economic outlook, meaning the focus will be on any new comments about the timing of potential rate cuts. Currently, the market is pricing in a 66% chance of a Fed cut by June.
The S&P 500's worst performance in four weeks and the US 10yr Treasury yield claiming to its highest level since November, 4.35%, come on the back of several headlines in recent days that have led to the market lowering expectations on the number of Fed rate cuts likely to happen this year, writes Deutsche's Henry Allen.
This included PCE inflation running at an annualised rate of 3.5%, the ISM manufacturing back in expansionary territory for the first time since October 2022, with its prices paid indicator the highest since July 2022, and yesterday's fresh rise in oil prices to the highest since October.
"And with all that happening, there’ve been clear signs that investors are raising their inflation expectations as well," Allen said, pointing to inflation swap contracts closing at their highest level since November.
"This backdrop has led to a significant selloff for sovereign bonds around the world, with a sharp rise in yields."
Here in the UK, he pointed to 10yr gilts seeing "the biggest rise in yields" after multiple data releases came in stronger than expected, including mortgage approvals at a 17-month high and a revised-higher UK manufacturing PMI into expansionary territory for the first time since July 2022.
"For equities, the concern about rates staying higher for longer led to a sizeable selloff, with the major indices losing ground on both sides of the Atlantic."
7.16am: FTSE to continue in the red
The FTSE 100 has been tipped to extend its losses on Wednesday morning after a sharp fall on Wall Street overnight.
After climbing higher than its record closing level yesterday morning but finishing on the slide, London's blue-chip index lost 17.5 points to finish at 7,935.09 and is currently expected to fall another 32 points, according to spread-betting platforms.
Overnight, US stocks also stumbled, with all three of the major indices retreating: the Dow Jones down 1%, Nasdaq dropping 0.95% and the S&P 500 falling 0.72%.
In what was the worst daily performance in four weeks for the S&P, most of the tech titans ended lower, led by Tesla on the back of sales figures and Nvidia profit taking.
The sell-off is continuing in Asia this morning, with almost all markets in the red.
Turning back to the UK, there's more inflation data this morning, from the hospitality industry this time, which is also easing but remains well above other industries.
The level of food inflation in hospitality was 12% in March, according to the CGA Prestige foodservice price index, which also recorded month-on-month deflation for only the second time in 28 months and the first time since October.
"This signals a welcome steadying of markets, but whether it marks the start of much-needed longer-term stability remains to be seen," CGA said.
Year-on-year inflation remains in double digits in eight of the ten categories of the index, with oils & fats the only one in deflation.