- Blue chips up 15 points at 7,892
- Markets hit after Israel strikes Iran
- Asda takeover reportedly close
3.55pm: Blue chips claw back losses late on
The FTSE 100 looked to bounce back from earlier losses in late trading, coming to sit 15 points higher at 7,892.
Trading had been downbeat throughout the day after news of Israel’s strike against Iran overnight.
Local sources have since reassured that further direct action between the two nations was unlikely, with Iran said not to be planning an immediate retaliation.
Also aiding stocks was optimistic comments from Bank of England deputy governor Dave Ramsden that inflation dynamics in the UK were improving.
“Domestic risks to the outlook for UK inflation [are] now tilted to the downside, with a scenario where inflation stays close to the 2% target over the whole forecast period at least as likely,” he said.
Among companies, Mondi PLC (LSE:MNDI) emerged as the day’s biggest riser after pulling out of a bidding war for paper firm DS Smith PLC (LSE:SMDS), climbing 9.1%.
DS Smith, which agreed to a £5.8 billion takeover by US-based International Paper Company earlier this week, sank 10.5% on the news.
This made it the day’s biggest loser on the FTSE 100, joined by retailers after data showed spending across the industry stagnated and missed expectations for growth in March.
JD Sports Fashion PLC (LSE:JD.), Kingfisher PLC (LSE:KGF) and B&M European Value Retail SA (LSE:BME) fell 2.6%, 1.7% and 1.6% respectively.
3.30pm: 'Risks to persistence in domestic inflation pressures are receding' - BoE deputy
Bank of England deputy governor Dave Ramsden has reassured that inflation dynamics in the UK are improving.
“Over the last few months I have become more confident in the evidence that risks to persistence in domestic inflation pressures are receding, helped by improved inflation dynamics,” he said in a speech in Washington on Friday.
“The balance of domestic risks to the outlook for UK inflation, relative to the February Monetary Policy Report forecasts, is now tilted to the downside, with a scenario where inflation stays close to the 2% target over the whole forecast period at least as likely.
“This leaves the UK as less of an outlier and more of a laggard in terms of recent inflation performance, and one that is now catching up quickly.”
His comments come as markets mull over the likelihood of cuts to base interest by the central bank this year.
An above-expected 3.2% jump in prices during March had skewed hopes of such cuts, leaving analysts pricing in one reduction this year, from two previously.
2.51pm: Wall Street sees mixed start
The Dow Jones opened 76 points higher on Friday, while the Nasdaq and S&P 500 slipped following news Israel had launched a strike against Iran overnight.
At 15,539, the Nasdaq was down 62 points, while the S&P 500 retreated 4 points to 5,007.
Stocks had looked to take a hit globally in the wake of the attack, which came after Iran struck Israel last week.
Reassurances from local intelligence and Iranian media that an immediate response was unlikely appeared to calm markets later though, sending oil and gold prices down following a spike earlier on.
Among companies, American Express Co jumped 3% in early trading after surpassing first-quarter profit expectations on increased spending among its affluent customer base.
Paramount Global (NASDAQ:PARA) soared 9% in the meantime on news Sony Group Corp was mulling launching a bid for the movie studio.
Falling though was Netflix Inc, by 7%, after the streaming giant’s Thursday earnings failed to impress, with second-quarter guidance below market expectations.
2.29pm: Mondi jumps after pulling DS Smith bid
Mondi PLC (LSE:MNDI) jumped 9.3% on Friday after scrapping plans to launch a further bid for paper firm DS Smith PLC (LSE:SMDS).
Mondi had said it was pulling out of a bidding war for the firm after DS Smith agreed to a £5.8 billion takeover by US-based International Paper Company earlier this week.
“The transaction would not be in the best interests of [...] shareholders,” Mondi said.
Talks were still ongoing between DS Smith and Mondi as of late as last week when International Paper tabled the offer.
DS Smith tumbled 12.8% on the news.
2.10pm: Gold and oil prices retreat as intelligence says Iran, Israel attacks ‘over’
Gold and oil prices fell back on Friday afternoon after local intelligence sources said direct attacks between Israel and Iran were now “over”.
Iran is said to not be expected to retaliate to Israel’s strike overnight, an unnamed regional intelligence source reassured, according to CNN.
This came after Iran launched an attack last week, with strikes between the two seemingly contained so far.
Iranian officials also told Reuters that no plans were in place to immediately hit back.
Gold fell back to sit 0.3% lower for a day at US$2,379 on the news, while benchmark Brent Crude was down 1.3% at US$86.45 a barrel over the same period... Read more
1.49pm: TDR Capital nears Asda takeover as Zuber Issa mulls stake sale - reports
Asda could be close to changing owners as Zuber Issa reportedly closes in on selling his 22.5% stake in the midst of a spat with his brother Mohsin.
Zuber would sell the stake to US private equity giant TDR Capital under the move, leaving it with a majority over the supermarket, according to Bloomberg.
The deal could be announced in the coming weeks, sources said, with discussions currently ongoing.
This comes as Zuber looks to buy out his brother’s stake in the duo’s petrol station empire, EG Group.
Investors were told of the deal for the petrol station group’s UK assets last month, as Mohsin, who is still on the board, looks to leave to start a new phase in his personal life.
1.34pm: Cocoa prices hit record
Cocoa futures have climbed to a record peak of US$11,800 per tonne amid mass shortages and poor harvests across West Africa.
Ghana, Côte d’Ivoire, Nigeria, and Cameroon, which together produce over 75% of the world's cocoa, “have witnessed severely reduced crop yields due to factors such as erratic weather, tree disease and a lack of investment”, said Trading Economics analysts.
Cocoa prices have surged more than 150% in 2024, “driven by the worst shortage of cocoa beans in decades amid poor harvests in key West African producing countries", they added... Read more
-William Farrington
12.53pm: PM warns GPs may no longer be able to sign off leave as long-term sickness grows
Prime Minister Rishi Sunak has said doctors could be stripped of their power to sign people off work in a bid to tackle increasing long-term sickness in the UK.
“We don't just need to change the sick note, we need to change the sick note culture so the default becomes what work you can do - not what you can't,” he said in a speech.
Unspecified specialists would be given the task of issuing sick notes under the move, with Sunak claiming benefits had become a “lifestyle choice” for some.
ONS data this week showed over 2.8 million people were economically inactive in the UK due to long-term sickness - the highest number since records began.
This was cited as the most common reason among the 9.4 million people neither in nor looking for work.
Sunak said on Friday that a “worrying” number of those out of work due to sickness were of younger generations.
“There's nothing compassionate about leaving a generation of young people to sit alone in the dark before a flickering screen watching as their dreams slip further from reach,” he said.
Not acting would be "irresponsible" given the current £17.6 billion personal independence payments bill is forecast to rise by more than 50% over the coming four years, he argued.
12.38pm: Retailers fall on underwhelming retail data
Retailers were among the biggest FTSE 100 losers on Friday after data showed sales across the sector stagnated last month.
The data had shown sales remained flat in March from February, underwhelming against market expectations for a 0.3% uptick.
JD Sports Fashion PLC (LSE:JD.), B&M European Value Retail SA (LSE:BME), Marks and Spencer Group PLC (LSE:MKS) and Kingfisher PLC (LSE:KGF) fell 3%, 2.9%, 2.8% and 2.2% respectively on the news.
“This is a sector stuck in the doldrums and these figures suggest that rather than surging out of recession the economy is once again flatlining,” AJ Bell analyst Danni Hewson warned.
“Brands that were already struggling to stay relevant are finding the current climate inhospitable and more holes have opened up on our high streets.”
Analysts had warned that the figures spelt bad news for the year ahead, as a flatlining of volumes meant consumers were spending more for less, in turn likely prompting the Bank of England to be weary of inflation.
The FTSE 100 itself was down 41 points at 7,835 come the afternoon, following news of Israel’s overnight attack on Iran.
Topping the list of fallers was DS Smith PLC (LSE:SMDS), down 12.3% after Mondi PLC (LSE:MNDI) withdrew itself from the running to buy the paper company.
12.29pm: DS Smith plummets as Mondi takeover plan scrapped
DS Smith PLC (LSE:SMDS) fell over 9% on Friday after Mondi PLC (LSE:MNDI) said it had scrapped plans to propose a takeover of the paper firm.
“Following a period of due diligence, and after carefully considering the value the combination with DS Smith would deliver to Mondi's shareholders, the board has decided that the transaction would not be in the best interests of its shareholders,” Mondi announced.
“Accordingly, Mondi does not intend to make an offer for DS Smith.”
Mondi said the move came after a proposed all-share combination of International Paper Company with DS Smith, unveiled earlier this week.
Talks were still ongoing between DS Smith and Mondi as of late as last week when Memphis-based International Paper tabled a knock-out £5.8 billion offer.
DS Smith fell 9.3% on the news.
12.02pm: Wall Street seen lower
Pre-market trading had Wall Street facing falls on Friday morning after news broke that Israel launched an attack against Iran overnight.
Futures had the Nasdaq down 122 points at 17,425, the Dow Jones falling 138 points to 37,869 and the S&P 500 off 22 points at 5,026 before Friday’s opening bell.
Israel targeted the Iranian city of Isfahan overnight, according to US sources.
Oil and gold prices both jumped by 4.4% and 1.6% respectively in a matter of hours on the news, before scaling back later on.
According to analysts, dovish comments from Federal Reserve Neel Kashkari, who signalled base rate cuts may only come in 2025, were also adding further pressure to markets on Friday.
“Unfortunately, the data seen over the past two months has done little to embolden the doves,” Scope Market’s Joshua Mahony said.
“Federal Reserve has been left with little choice but to temper expectations despite having laid out a blueprint for three 2024 cuts in the March dot plot.”
11.26am: Flat retail sales paint bad picture for consumer - analysts
Consumers could be facing a bleak year after retail sales stagnated in March, XTB analyst Kathleen Brooks has warned.
A flat monthly reading, which came against expectations for a 0.3% increase, is likely to leave the Bank of England cautious on inflation, in turn hitting chances of interest rate cuts.
“UK retail sales volumes are basically unchanged,” Brooks noted following the figures.
“[This] suggests that UK consumers are paying more for fewer goods, which could keep the Bank of England wary about inflation.”
Hopes for interest rate cuts in the coming months had already been dialled down after Wednesday data showed inflation climbed ahead of expected by 3.2% in the year to March.
Markets were left fully pricing in one cut this year, from two previously, with a second reduction now looking more optimistic.
“With fewer rate cuts now priced in from the Bank of England, the prospect of a reprieve for the consumer looks in doubt,” Brooks added.
Jumps in fuel and non-food store sales were offset by reductions in food stores, online and at other non-store retailers, Friday’s data from the Office for National Statistics showed.
11.08am: Israel, Iran strikes more about ‘willingness to act’ so far - analysts
Strikes between Israel and Iran have so far proved to be shows of force rather than acts attempting to kick off a full-blown war, Scope Market analyst Joshua Mahony writes.
“Given the fact that Iran had provided advanced warning of their attack, it is clear that the events of the past week appear to be more about showing [...] willingness to act,” he said.
“For markets, this is a best-case scenario and should hopefully remove the fears that have been playing out within equity and energy markets in particular.”
That said, Israel’s strike last night on the city of Isfahan, which sits near nuclear facilities among the likes of an airfield and military sites, “serves as a warning,” Mahony continued.
“They could strike such highly sensitive targets in the future should they wish.
“However, the Israeli response has been notably more reserved.”
Markets across Europe fell on Friday morning on the news, with the FTSE 100 down 41 points at 7,835. Gold and oil prices jumped in the meantime.
10.52am: Thames Water could effectively be nationalised under plans - reports
More on Thames Water and plans have been drawn up for a government takeover of the water supplier to London, according to reports.
Known as “Project Timber”, the plans would see Thames’ debt pile added to the public purse, according to the Guardian.
Thames would be placed into government-handled administration under the move, effectively being nationalised, reports said.
Thames Water holds over £15 billion in debt, with this stretching to £18 billion when including other businesses across its complicated structure.
“As a responsible government, we prepare for a range of scenarios across our regulated industries - including water - as the public would expect,” a government spokesperson said.
Thames has reportedly asked regulator Ofwat for permission to raise consumer bills by 56% in its bid for survival, while lenders’ investment also face being cut.
10.34am: Barclays lifts mortgage rates
Barclays PLC (LSE:BARC) has increased mortgage rates after inflation figures this week showed prices rose quicker than expected in March.
Two and five-year mortgage rates have been increased, Barclays announced on Friday, as it unveiled sweeping product changes, which included some cuts.
The lender started charging 4.98% on a 75% long-to-value two-year fixed mortgage from Friday under the move, while five-year deals now include rates of up to 4.8%
This comes after inflation figures on Wednesday showed consumer prices increased by 3.2% in March, against 3.4% in February but above market expectations for 3.1%.
Hopes for interest rate cuts by the Bank of England in the coming months took a blow as a result, with markets left fully pricing in just one reduction this year.
9.48am: Thames Water plans 56% bill increase - reports
Thames Water is reportedly looking to hike consumer bills by 56% over the next five years in its bid for survival.
London’s crisis-struck water provider is said to have proposed the move under new plans submitted to regulator Ofwat, according to The Telegraph.
This follows a previous attempt to ask the regulator to hike bills by 40%, reports say, as the debt-ridden supplier looks to stay afloat, and even possibly away from nationalisation.
Thames emerged as being on the verge of collapse last year, after costs of servicing its £18 billion debt pile have grown recently.
Ofwat had told Thames that a viable plan of action was needed in the coming weeks before the regulator sets out draft determinations for the industry in June.
Under Thames’ plan, called “Project Timber”, bondholders could also see the value of their loans cut by up to 40%, as reported by the Guardian.
9.32am: Markets sceptical as next step in Middle East unclear
Markets across Europe were on the back foot following Israel’s strike on Iran overnight, as onlookers mulled the next possible steps from the two nations.
The FTSE 100 was off 48 points at 7,828, while markets in France, Germany and Amsterdam were among the indexes seeing red across Europe on Friday morning.
Gold and oil prices jumped in the meantime, peaking overnight before scaling back slightly later in the morning... Read more
Having exchanged an attack each over the last week, XTB analyst Kathleen Brooks noted eyes were now fixed on Israel and Iran after what has so far seemed like contained strikes.
“So far, the attacks have been restrained, which is causing some relief to markets,” she said.
“However, the risk premium across asset prices is likely to rise as the future remains unclear.”
The US dollar slipped against the Japanese Yen to as low as ¥153.6 as news of the strike broke, Brooks highlighted, as 10-year Treasury yields also faced a blow.
Volatility is likely to “stick around” as a result, she said, given one mistake [...] could trigger an escalation” from either side.
9.09am: adidas improvements to keep coming - analysts
adidas AG will likely keep seeing improved profit and sales over the coming years after unveiling stronger trading earlier this week, analysts have said.
adidas bumped up full-year guidance midweek after beating first-quarter expectations on stronger profit margins and sales of the likes of footwear products.
Though adidas increased profit guidance to roughly €700 million (£599 million), Deutsche Bank estimated the figure could actually sit higher at €1.1 billion.
“In our view we are still at the beginning of a multi-year improvement in the sales and profit profile for adidas,” the bank said.
“It is important to look at the underlying attractiveness of the sporting goods industry, a broader consumer recovery and the current style trends favouring adidas"... Read more
8.53am: The morning so far
Stocks plummeted when markets opened this morning after days of mounting tensions between Iran and Israel tipped further into all-out conflict.
US officials confirmed that Israel carried out an attack on Iran overnight, following days of knife-edge tensions.
Large-cap airline stocks easyJet and British Airways owner International Consolidated Airlines fell around 2.6% each, with other major fallers including Scottish Mortgage, Rolls-Royce Group, JD Sports and Marks & Spencer.
At the time of writing, the FTSE 100 was trading 47 points lower at 7,829, not helped by sluggish retail sales figures.
Month-on-month retail sales stayed flat in March, undershooting consensus expectations of 0.3% growth. Year on year, they added 0.8% after falling 0.3% in February.
Commodities spiked however, with gold getting sent above the US$2,400 per ounce mark for the second time in a week, almost returning to all-time highs.
The precious metal jumped by 1.6% in just an hour to a peak of US$2,415 overnight, before scaling back to US$2,383 - up 20% from a year ago.
Brent crude jumped to US$90 a barrel, up 4.4%, to a peak of US$90.69, before falling back to US$88.25.
In other company news, FTSE 250-listed fund manager Man Group saw net cash outflows of US$1.6 billion over the three-month period ending 31 March, but this was sufficiently offset by market appreciation of its assets under management (AUM). The stock fell 5%.
William Hill owner 888 Holdings’ revenues came in slightly ahead of expectations, sending shares 2% higher.
8.33am: Gold, oil higher after Israel strikes on Iran
Gold and oil prices reacted to news on Friday morning that Israel had launched an attack on Iran overnight.
Gold went above the US$2,400 per ounce mark for the second time in a week on the news, almost returning to all-time highs.
The price of the precious metal jumped by 1.6% in the space of an hour to a peak of US$2,415 overnight, before scaling back to US$2,383 - up 20% from a year ago.
Oil prices also jumped. Brent crude jumped to US$90 a barrel, up 4.4%, to a peak of US$90.69.
Brent then also fell back, to US$88.25 a barrel, up 8% on the same time last year.
US equivalent West Texas Intermediate was up 4.5% overnight to US$86.23 a barrel, before slipping to US$83.96 later.
Explosions were reportedly heard early on Friday morning around the Iranian city of Isfahan.
According to US sources, an Israeli missile had struck Iran overnight, with the latter claiming three drones were destroyed in the attack.
Iran has since claimed that no missile landed in its territory, with Isfahan home to an air base and several military sites, including nuclear facilities which have reportedly not sustained any damage.
Israel’s strike comes after Iran launched missiles and drones at it last week with a response threatened earlier this week.
“We will likely see a further flight to safety before the weekly closing bell on fear of further escalation of tensions during the weekend,” Swissquote analyst Ipek Ozkardeskaya warned while discussing commodities.
-Josh Lamb
8.23am: FTSE 100 opens lower
The FTSE 100 blue-chip index was down 33 points in opening trades, a better result than pre-market futures contracts had anticipated.
Markets will be highly volatile as tension between Israel and Iran tip over into conflict.
Among the top fallers include airlines easyJet and British Airways, Scottish Mortgage and JD Sports.
Footsie was trading at 7,842 at the time of writing.
8.18am: William Hill owner’s shares higher following revenue beat
William Hill owner 888 Holdings PLC (LSE:888)’s revenues came in slightly ahead of expectations over the first quarter and should jump in the second.
At £431 million, revenue over the three months to March was ahead of previous guidance of up to £430 million, but down 3% on a year ago.
Revenues across the company’s four divisions fell, including by up to 7% in 888’s retail wing on shop optimisation plans and challenging comparables from last year.
Average monthly active customers increased by 6% to 1.84 million, fuelled by a jump in 888’s UK and online segment, including from hiked spending at Cheltenham Festival.
Shares bounced 2.7% higher on the results.
7.59am: Man Group sees higher AUM despite net cash outflows
FTSE 250-listed fund manager Man Group PLC (LSE:EMG) saw net cash outflows of US$1.6 billion over the three-month period ending 31 March, but this was sufficiently offset by market appreciation of its assets under management (AUM).
AUM increased by 4.9% sequentially in the first quarter of its financial year, bringing the total to US$175.7 billion (£141 billion) as of 31 March.
The high-margin absolute return segment saw AUM increase from $US$47.7 billion to $50.3 billion. Long-only funds also saw inflows, partially offset by a decrease in multi-manager solutions.
On a year-on-year basis, total AUM across all funds increased by more than 21%.
7.42am: Gold, oil prices higher
Gold and oil prices jumped after Middle East tensions tipped over into hostilities between Iran and Israel.
Israel reportedly hit targets in the Western Iran city of Isfahan, which houses military and nuclear facilities.
Brent crude jumped 4%, exceeding US$90 a barrel, prices have since fallen back below US$89 a barrel.
Gold prices spiked as investors commenced a ‘flight to safety’ amid escalating tensions. Spot prices have the precious metal trading at US$2,379 an ounce, up around 0.15%.
“We will likely see a further flight to safety before the weekly closing bell on fear of further escalation of tensions during the weekend,” predicted Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
7.25am: Retail sales fail to grow in March
Month-on-month retail sales stayed flat in March, undershooting consensus expectations of 0.3% growth.
Year on year, they added 0.8% after falling 0.3% in February.
Commenting on today’s data print, ONS senior statistician Heather Bovill said: “Retail sales registered no growth in March. Hardware stores, furniture shops, petrol stations and clothing stores all reported a rise in sales.
“However, these gains were offset by falling food sales and in department stores where retailers say higher prices hit trading.
“Looking at the longer-term picture, across the latest three months retail sales increased after a poor Christmas.”
7.12am: Stocks to fall over 70 points
The FSE 100 is expected to plummet when markets open today as tensions between Iran and Israel tip further into all-out conflict.
US officials confirmed that Israel carried out an attack on Iran overnight, following days of knife-edge tensions.
Blue chips are also being impacted by a poor showing from US stocks, with the S&P 500 chalking up its fifth straight day of losses yesterday.
On today’s macroeconomic calendar, retail sales were shown to have stayed flat month on month in March, undershooting the 0.3% rise anticipated by analysts. Year on year, retail sales added 0.8%.
There is little in the way of company earnings today, barring an update from FTSE 250-listed fund manager Man Group PLC (LSE:EMG).
Futures contracts have the footsie opening 72 points lower at 7,812.