- FTSE 100 closes seven points higher
- Index sets new intraday record above 8189
- More UK banks lift mortgage rates
4.43pm: FTSE 100 closes near record high
The FTSE 100 closed 7 points higher at 8,147, having soared to a record high above 8,189 earlier in the session
4.03pm: FTSE 100 off highs
The wind seems to have gone out of the FTSE's sails even though Wall Street is sailing higher.
A 0.5% rise in the pound might be acting as a small headwind, with London's blue-chips up 15 points at just over 8,155, a gain of under 0.2%, well off the new intraday record of 8,189.14.
However, unless it turns negative we're on course for another record close for the index, topping last week's 8139.83.
Top risers today have been Ladbrokes owner Entain PLC, up 3.6%, and Anglo American PLC (LSE:AAL).
Frasers off the back of a share buyback was not too far off, while Prudential was lifted by results for fellow Asia focused insurer AIA.
After a slow start, Lloyds insurer Beazley PLC is looking at a 1.9% gain.
St James's Place PLC rose 1.9% ahead of results due tomorrow, a day that also includes HSBC earnings and Amazon.
Fallers are led by JD Sports Fashion PLC (LSE:JD.), Ashtead Group PLC, Centrica PLC, InterContinental Hotels Group PLC and Rolls Royce Holdings PLC.
3.30pm: Sell in May?
According to one of the most famous market adages, the stars are aligning for the market-beating strategy of “Sell in May and go away, come back on St Leger's day”.
Deutsche Bank has analysed the success of this old trope in what is the second of a new 'myth buster' series of notes.
"If you invested in the strategy in 1987, it would theoretically have outperformed a buy-and-hold strategy quite significantly," said strategist Maximilian Uleer, with a 9.1% annualized performance versus only 7.4% for buy and hold.
But he adds that "we are not big believers in horoscopes, and we would certainly not invest our money based on it".
The strategist and his team tested various versions of the 'sell in May' strategy to give this approach the benefit of the doubt, including hypothetical selling at the end of April and at the end of May, along with reinvesting at the end of August and at the end of September.
"Selling at the end of May and buying at the end of September yielded the best results," he says, assuming an investment in the Stoxx Europe 600 net total return index from the end of September until the end of May, and then switching to cash (without interest) from the end of May until the end of September.
But Uleer said the team's key view on is "the chances of this strategy to outperform Buy and Hold are the same as tossing a coin".
The cumulative performance difference would add up to 1,142%, but he noted that this was misleading as in 23 of 37 years, the strategy would have underperformed a simple buy-and-hold strategy.
3pm: Froth off for the Footsie
An underwhelming start to the week on Wall Street has certainly knocked the froth off the top of the FTSE 100, which a few minutes ago saw its gain down to just 12 points.
This news comes as a further depressing update comes for homeowners with Nationwide making it three big lenders to have raised mortgage rates today.
The building society announced up to 0.25% of higher mortgage rate increases across its fixed rate range, for movers and remortgages, plus those for existing borrowers looking for a new deal.
2.28pm: FTSE fizzles
Some of the early fizz has gone out of Footsie as investors wait for a clear steer on the direction of US markets.
Early indicators are for a decent start led by Tesla, where the news is that the electric vehicle maker has got long-awaited Chinese approval for Full Self Driving.
Boss Elon Musk apparently sealed the deal with a surprise visit to Beijing at the weekend.
In the UK, Frasers is now top of the Footsie pile after its new share buyback plan announced this morning.
Broker Jefferies has been instructed to buy up to a maxmum of £80 million worth of shares.
Shares in the Sports Direct owner are up 3% at 920p.
On the FTSE 250, it is publisher Future pushing the index higher, with a 6% rise to 646p.
12:49: Yen's fall causing some head-scratching
Japan's currency has been a big focus of foreign exchange traders today, with the yen having sunk to a 34-year low on the back of the Bank of Japan meeting on Friday.
The US dollar pair, USD/JPY surged to 160.00 at the end of last week, before it dropped back to 156.00.
Japan's Ministry of Finance has been jawboning in recent weeks in an attempt to cull the losses, threatening to take action via direct intervention.
The sharp drop back suggests official intervention did take place to stem the yen's weakness, analysts say today, which is a public holiday in the land of the rising sun.
This has "brought violent moves in USD/JPY, though as yet the MoF has not confirmed intervention", said Rabobank, noting that news wires were earlier reporting speculation of a "fat finger" trade.
Daiwa analysts said it give "the distinct impression that the Japanese authorities might well have officially intervened to support the currency for the first time since October 2022".
Japan intervened in September 2022 and again in October of that year.
While this week's move is not yet official, said ING, there are "strong indications that Japan intervened in the FX market this morning". If the same script is followed as September 2022, they said "USD/JPY should remain volatile throughout the session before stabilising around 156-157."
Saxo Bank analysts said: "the yen strength will have to be backed now by either weak US data or a hawkish BoJ narrative which was completely absent in Friday’s announcement. Focus turns to Fed meeting this week, where focus will be on whether a rate hike or QT tapering is on the table."
12.23pm: Hunt-ing for the next London IPOs
Chancellor of the Exchequer Jeremy Hunt is organising a 'summit' with some of the UK’s top fintech and biotech bosses in a bid to rejuvenate London's status as a top stock exchange amid a growing exodus of British stocks.
Bosses from challenger banks Monzo and Starling have been invited to attend the meeting at the Chancellor's weekend residence on May 16, with the Treasury seeking views from companies that could potentially list on the LSE.
Bim Afolami, the City minister, and the prime minister’s chief business advisor Franck Petitgas will be in attendance along with government officials and LSE executives, according to reports.
An invitation to the summit, according to a Sky News report, said the talks will include discussion of "the UK's capital markets and how they can support innovative, high-growth companies such as yours to achieve your growth ambitions".
It comes as Monzo is said to be closing in on a new £500 million round of investment led by US tech investor Hedosophia and Singapore's Government Investment Corporation (GIC).
12.01pm: Tesla revved up by China green light
In pre-market trading in the US, Tesla Inc (NASDAQ:TSLA) is up 9% after the electric vehicle company got its long-awaited China approval for Full Self Driving.
Boss Elon Musk sealed the deal with a surprise visit to Beijing at the weekend.
Tesla will partner with Chinese tech stalwart Baidu for mapping and navigation functions, which analysts said was the key to getting the green light from Beijing.
"This is a key moment for Musk as well as Beijing at a time that Tesla has faced massive domestic EV competition in China along with softer demand," said analysts at US brokerage Wedbush.
"While the long term valuation story at Tesla hinges on FSD and autonomous, a key missing piece in that puzzle is Tesla making FSD available in China which is now a done deal."
If Musk is able to obtain approval from Beijing to transfer data collected in China abroad, Wedbush said "this would be pivotal around the acceleration of training its algorithms for its autonomous technology globally".
11.55am: US stocks set to join the fun
US stocks are predicted to enjoy a fairly decent start to the week after a strong finish to what was a rollercoaster of a week.
Ahead of a week that contains two more earnings from members of the Magnificent 7 and a Federal Reserve meeting, tech stocks are set to resume their position as the bandleader for the morning march higher.
According to futures markets, the tech-powered Nasdaq 100 is pencilled in for a 0.29% gain, followed by S&P 500 up 0.15% and Dow Jones up 0.10%.
11.25am: Two more lenders nudge up mortgage rates
More big lenders have announced increased fixed rates on mortgages this morning as markets see a low chances of a summer cut from the Bank of England.
Natwest has announced a hike across the full range of residential and buy-to-let products from tomorrow, and Santander also unveiled a suite of rate increases for both fixed and tracker by up to 0.25% from Tuesday too.
At the end of last week, Halifax also increased its mortgage rates.
Justin Moy, managing director at EHF Mortgages, said this was not unexpected, following more rises from rivals in recent weeks.
"With the likelihood of base rate cuts becoming less likely in 2024, longer-term swap rates have continued to increase over the past few weeks, lenders have had little choice other than to follow," he said. "Where will this stop? Low inflation and a general election don't seem enough to make a difference."
Gary Bush, a financial adviser at MortgageShop, said, "household budgets being under control doesn't seem likely in the short term sadly. Hang onto your hats homeowners the bumpy ride continues."
11.15am: Red Sea red-zone is 'game changer' for shipping industry
If the Suez Canal situation is cleared up it would result in a "complete collapse" in shipping freight rates, according to container shipping data experts.
After the Red Sea became a no-go area due to apparent Iran-backed attacks on container ships, this has been an "absolute game-changer" for the shipping industry, said Hua Joo Tan, founder of container market intelligence analyst firm Linerlytica. "It has completely turned the supply and demand equation upside down."
Rates have been lifted due to the current shortage of ships, but Tan told the Freight Buyers’ Club podcast that more than three million containers worth (TEU) of newbuilding shipping capacity is due to be delivered this year, which amounts to net fleet growth of over 9% even after adjusting for scrapping.
Currently the number of vessels now being diverted around the Cape amounts to 330 ships or 4.5 million of container TEU capacity, a figure that will continue to rise through 2024.
If the Suez Canal reopened to container shipping it would prompt “a complete collapse in freight rates”, he said, but he felt this scenario is unlikely.
“I do not expect to see a quick resolution to the Middle East crisis,” he said. “My base case is that this crisis in the Red Sea is going to drag out for many more months, and perhaps even turn into a multi-year issue, so this is a scenario that I think the market needs to prepare for as well.”
11.08am: European wobbles, FTSE strength
Now it's not just Spain in the red, with Germany's Dax and the pan-continental blue chip index Euro Stoxx 50 that have also fallen into the red following the earlier confidence data.
London's FTSE meanwhile remains a beacon of green, up 0.5% and having set a new intraday record of 8189.14 not long ago.
The Footsie is showing energy that investors haven’t seen in the UK market for a long time, say analysts.
Gains this morning mean the FTSE 100’s year-to-date performance of 5.7%) is now better than the Nasdaq 100's 5.3%, India's BSE 100 or Nifty 50 indices and the CSI 300 in China.
"So much for the FTSE’s reputation of being a home for boring, outdated companies," said analysts at AJ Bell.
10.45am: Elementis activist calls for CEO axing
FTSE 250-listed chemicals group Elementis plc (LSE:ELM) has seen its shares get a small boost after major shareholder Gatemore Capital published an open letter criticising the company and calling for the removal of its CEO.
London-headquartered Gatemore said the company had "lost its direction" and been mismanaged.
In a scathing analysis of the latter's tenure since 2016, it said in the letter: "We believe that many of Elementis’ current problems are self-inflicted and demonstrate a continued failure of judgement of the company’s top leadership team, most notably the CEO.
10.40am: Spanish PM hits markets, confidence wobbles
While most of Europe and Asian markets have been moving higher this morning, Madrid is an exception with inflation data and politics on investors' minds.
The IBEX 35 started around 0.5% higher but fell into the red as an announcement was expected from Spain's prime minister Pedro Sanchez, following the launch of a corruption probe into his wife.
Sanchez, whose centre-left party leads the government after three elections in the past five years, said he had told King Felipe VI that he decided to continue in office.
"I have decided to go on, if possible even stronger as prime minister. This is not business as usual, things are going to be different," he said in a TV address.
Ahead of full EU data tomorrow, Spanish inflation also ticked up to 3.4% from 3.3%, which comes as the European Central Bank has been strongly sticking to its guns over an expected interest rate cut in June.
Elsewhere, there has been some EU-wide data this morning, with the eurozone business and consumer confidence data coming in below expectations and remaining mostly in negative territory.
Eurozone Consumer Confidence Apr F: -14.7 (prev -14.7)
- Consumer Confidence Apr: 6.0 (est 6.9; prev 6.3; prevR 6.4)
- Industrial Confidence Apr: -10.5 (est -8.5; prev -8.8; prevR -8.9)
- Economic Confidence Apr: 95.6 (est 96.7; prev 96.3; prevR 96.2)
— LiveSquawk (@LiveSquawk) April 29, 2024
Elsewhere, one of the biggest risers today is Dutch health tech giant Philips, which has leapt more than 30% after revealing it had reached a $1.1 billion settlement in the US over personal injury litigation.
This comes after millions of its sleep apnoea devices have been recalled over the last three years, with the company taking a €982 million provision in its quarterly results this morning.
“The approved consent decree and economic loss settlement are significant milestones and provide further clarity on the way forward for Philips,” said CEO Roy Jacobs.
10.25am: Big Puig
The initial public offering from Spanish designer brands conglomerate Puig later this week is set for a valuation of almost €14 billion, the top of its hoped-for range.
Bankers to the Jean-Paul Gaultier and Paco Rabanne owner said investors would be likely to miss out if they tried to buy shares below €24.50 per share, equating to a market cap of €13.9 billion.
Still majority-owned by Barcelona's Puig family, the group earlier this month set an expected valuation range of between €12.7 billion and €13.9 billion, with a free float not owned by the family of up to 23.7% of the total shares.
10.14am: Petrofac whacked as results delayed, funding still sought
A big faller outside the FTSE 350 this morning is Petrofac Limited (LSE:PFC), which has plunged over 30% after saying its shares are likely to be suspended from trading from Wednesday as the company missed tomorrow's deadline for publishing full-year results.
They are not expected until the end of May.
The oil engineer is working to secure new a "comprehensive refinancing solution as quickly as possible," chairman René Médori said.
Net debt stood at US$583 million at the end of December, while Petrofac said a US$130 million loss was expected in its engineering and construction division as costs from the Thai Oil Clean Fuels project look to be recouped.
9.58am: Beazley held back by cyber lull, no surprises from Baltimore bridge
Lloyds insurer Beazley PLC shares have recovered from their initial slide into the red but are still only modestly higher after reporting a rise in insurance written premiums in the first quarter, with growth in property offsetting a fall in cyber.
The FTSE 100-listed Lloyds insurer revealed a 7% rise in insurance written premiums in the first quarter, with net written premiums up 11%.
Analysts at Jefferies added: "Beazley's claims experience for the first quarter is as expected, including the impact of any claims arising from the Baltimore bridge loss."
9.47am: FTSE testing new record highs
The FTSE 100 has taken another leg up, rising 45 points or 0.56% to 8,185.24 as oil giants Shell and BP both turned positive.
Brent crude is down 0.45% today at US$87.81 but not as low as it was a couple of hours ago.
US secretary of state Antony Blinken will travel to Saudi Arabia to try to restart ceasefire negotiations in Gaza, with a delegation from Hamas also travelling to Cairo in parallel and pledging to provide a response to an Israeli proposal focused on an initial hostage release.
Analyst Ipek Ozkardeskaya at Swissquote Bank noted there was a "minor slide" on hope that Blinken’s efforts to convince Israel to a ceasefire, with the White House announcing on Sunday that Israel has agreed to hear out its concerns.
"The barrel of US crude could see support near the $82pb as besides the tense geopolitical landscape in the Middle East, the reflation trade – that relies on softer central bank policies and narrow supply due to OPEC’s efforts – remain favourable for an extension of the rally. Yet a hawkish Fed message this week is a downside risk to this positive outlook – especially if the US finally convinces Israel to cease fire in Gaza."
9.35am: Race for less space
Interesting find in data from lender Halifax, which has found that prices for flats and other smaller homes have been increasing faster than bigger houses.
This represented a switcheroo in the 'race for space' demanded during the pandemic, when COVID lockdowns inspired buyers to searched for bigger homes and more outdoor space.
The average price of a flat increased by 2.7% in the year to February, versus a 1.7% rise for a semi-detatched home, 2.0% for a detached home and 2.6% for the average terraced property, Halifax found.
9.22am: Ocado faces CEO pay revolt
Ocado Group PLC (LSE:OCDO) is facing shareholder pushback at its annual general meeting over the bonus of its chief executive, Tim Steiner.
In the AGM season that has seen pay battles over AstraZeneca CEO's £18.7 millio pay and LSEG boss David Schwimmer’s £13 million package, Steiner is hoping to have a potential bonus of up to £14.8 million approved by shareholders.
Advisors Glass Lewis have urged investors against the decision, joining fellow proxy adviser ISS, which raised objections earlier this month.
Responsible lobbying group Share Action also said it was keen to hear from Ocado’s management and board and find out why it was happy to provide huge pay packets for its executives when “refusing to pay hundreds of its workers a real living wage of £12 an hour”.
9.09am: Mixed housing market but signs of life
The number of UK home sales agreed grew 12% in the four weeks to 21 April compared to the same period last year, according to data from Zoopla today.
House price inflation is broadly static, according to the latest Zoopla House Prices Index (HPI), but homes in the south of England are currently seeing negative price inflation despite improving consumer sentiment.
"Static house prices are good for buyers, who are already struggling to cope with a 60% increase in mortgage payments in 2024," the property listing website said.
Average property prices were 0.2% lower year-on-year, a similar fall to the previous month.
There has been a higher number of homes going under offer in the first four months of 2024 compared to the same period last year.
"The housing sales pipeline is now rebuilding after a period of lower sales, when mortgage rates spiked higher in 2022 and 2023," said Zoopla's director of research, Richard Donnell.
His data shows that the housing market is on track for 1.1 million sales completions in 2024, up 10% on 2023.
8.39am: Pound slightly higher
The pound is up 0.3% against the US dollar today at $1.2533, having been buffeted by Bank of England and Federal Reserve rate expectations for many weeks now, while versus the euro it's flattish with EUR/GBP at 0.8555.
There's not many domestic drivers for GBP this week, with the UK calendar including only some lending figures, housing figures and the final PMI reports on Wednesday and Friday, while BoE officials will not be able to comment on monetary policy as the pre-meeting quiet period starts.
Following the "recent rollercoaster in BoE policy comments and a substantial repricing higher in US rates", says ING forex analyst Francesco Pesole, have left the market "attached" to the prospect of an August rate cut, with reluctance to fully price in more than one additional cut this year.
"That might be leaving sterling in a stronger position than the euro this week – especially considering EUR downside risk for EZ inflation – but we still believe EUR/GBP will ultimately find a more stable upward path as investors price in larger BoE cuts. For now, the pair has erased almost all recent gains and can push back below 0.8550."
8.29am: Bouyant mood for markets
Markets are in a buoyant mood this morning, after a new intraday high of 8,185.59 was set by the Footsie in early trading, and Europe's major indices are all in green.
"Sentiment is upbeat at the start of the week, fuelled by relief that inflationary pressures in the US aren’t as bad as feared, and hopes return that a ceasefire could be negotiated in the Middle East," says Susannah Streeter, head of money and markets at Hargreaves Lansdown.
The index is up 3% so far in April, with tomorrow the last day of the month, or 11% over the past six months, helped by the weaker pound against the dollar, though GBP/USD is up 0.3% today.
"Investor optimism has been buoyed by a rally on US markets on Friday, and developments in the Middle East. Negotiators from Israel and Hamas expected to meet in Egypt, while US Secretary of State Antony Blinken ups diplomatic efforts at the World Economic Forum in Riyadh, Saudia Arabia," said Streeter.
Anglo American PLC (LSE:AAL) shares are being bid on hopes that BHP's takeover offer will not be the end of the story. Analysts at Stifel said "a sweetened offer [is] expected should BHP want to secure Anglo’s coveted copper assets" while those at Jefferies said they "would be surprised if other bidders didn't emerge".
Prudential PLC (LSE:PRU) is up almost 3%, which is likely to be read across from fellow Asia-Pacific insurer AIA Group reporting strong results that sent its shares up 6% in Hong Kong.
Sports Direct owner Frasers Group PLC (LSE:FRAS) is another riser, up 2.3%, after the retailer said it is launching a new £80 million share buyback programme today.
AstraZeneca PLC (LSE:AZN) shares are being boosted by two drug updates: a combination of its Truqap and Faslodex drugs has been recommended in the EU for advanced ER-positive breast cancer, reducing disease progression risk by 50%; and its Enhertu has shown significant progression-free survival improvement in metastatic breast cancer in a trial.
BA owner IAG (LSE:IAG) is little moved by the news that its Air Europa takeover is facing EC competition objections, with the shares down only a couple of pennies.
Among the fallers, JD Sports Fashion PLC (LSE:JD.) is down 2.2% on a Barclays note, downgrading to 'equal weight' from 'overweight' and with the target price cut to 140p from 165p.
8.16am: FTSE 100 sets another new high
The FTSE 100 has started the new week on the front foot, as expected, setting a new intraday high.
London's blue chip stocks have continued the positive momentum from the past couple of weeks, adding 30 points or 0.37% to climb to 8,169.71.
A notable riser this morning is Anglo American PLC (LSE:AAL), which at the end of last week rejected BHP's £31 billion all-share bid as "opportunistic".
7.58am: Boost for Royal Mail owner IDS
Royal Mail owner International Distributions Services PLC (LSE:IDS) has received unexpected support from its main trade union in its effort to reduce its letter delivery requirements.
In a report from the Times, the Communication Workers Union appears to have conceded to accept a proposal from the company that would abandon its duty to deliver all letters six days a week.
Under the Universal Service Obligation legislation from the privatisation process in 2011, Royal Mail is obliged to provide six-day postal services, but against the background of a £3.1 billion takeover bid from its largest shareholder, 'Czech Spinx' Daniel Křetínský, the union’s deputy general secretary conceded the "USO as a six-day option is no longer financially viable"... Read more.
7.43am: IAG deal for Air Europa faces objections from EC
British Airways owner International Consolidated Airlines Group (LSE:IAG) has been told by the European Commission's antitrust regulators that they think the bid for Air Europa could be anti-competitive.
A preliminary view from the EC following the in-depth investigation it has been carrying out since January, is that the proposed acquisition "may restrict competition in the market for passenger air transport services, in particular for routes within, to and from Spain", with concerns that it may result in prices and/or decreased quality of services.
IAG, which owns Iberia and low-cost option Vueling, and Europa already operate many domestic routes in Spain, short-haul routes within the Europe and neighboring countries as well as long-haul routes, in particular to and from North and South America.
The EC said IAG can now reply to these objections, request a hearing and/or put forward remedies to address these preliminary competition concerns and can submit them at any time before a deadline of 10 June.
7.27am: New offer for Hipgnosis
Hipgnosis Songs Fund Limited (LSE:SONG) has agreed terms on another, high cash offer from Blackstone.
This one is priced at US$1.30 in cash, equivalent to 104p, and is up five cents on a second rival offer last week from record company Concord and six cents from a previous Blackstone offer a week ago.
Directors intend to unanimously recommend this offer, so have withdrawn their unanimous recommendation of last week's Concord offer.
7.13am: FTSE 100 tipped for another new high
FTSE 100 was being called higher again on Monday after the spate of record-breaking in the past seven days.
Financial spread betters had London's blue-chip index adding around 40 points in early trades driven by expectations of another good week on the earnings front.
Week ahead: Shell, Next and a heap of blue chip earnings
A host of big names report both in the UK (Shell, HSBC, GlaxoSmithKline, Standard Chartered and Next) and US (Amazon and Apple) and if recent updates are a guide, any surprises should be on the upside. The US Federal Reserve also meets this week.
Strong gains this morning in Asia should add to the good mood when the market opens in London.