- FTSE 100 ends 100 points higher at new record
- BP profits fall short
- Construction industry growing fast
4.50pm: Another record close
The FTSE 100 finished at a new record closing high of 8,313.67 after adding just over 100 points on the day, or 1.22%.
All but three of the top 30 largest companies rose today (BP, Anglo American and Haleon the exceptions), with a mix of sectors sprinkled atop the leaderboard, which was led by a distributor (DCC PLC up 4.6%), a renewable power generator (SSE PLC up 4.15%), a bank (Barclays PLC up 4%), a housebuilder (Persimmon PLC (LSE:PSN) up 3.5%), a precious metals miner (Fresnillo PLC up 3.3%), an energy services group (Weir PLC up 3.2%) and a bookmaker (Flutter Entertainment PLC up 3.15%).
"London’s blue-chip index scaled new heights today as optimism about the mid-term rate hiking cycle powers investor sentiment," said analyst Danni Hewson at AJ Bell.
"There has been no shortage of plot twists in the year to date but at the moment markets are banking on the economic climate reaching that perfect temperature to allow rate setters to finally pivot."
The Bank of England meets this Thursday with market sentiment is "pretty much wedded" to the expectation that interest rates will not change this time around, but Hewson said "there will be plenty of eyes scouring between the lines".
She said housebuilders Persimmon and Barratt were amongst the day’s big gainers, "buoyed by expectations that the market is treading water until mortgage rates begin their anticipated descent and house prices head swiftly in the other direction as would-be buyers take the plunge".
Budget airline easyJet PLC was the biggest faller, after Ryanair boss Michael O’Leary said ticket prices aren’t likely to rise by as much as had previously been expected.
British Airways owner International Consolidated Airlines Group SA (LSE:IAG) also experiencing a bumpy landing.
BP was among the fallers after its quarterly results disappointed.
3.55pm: FTSE 100 to close at record high
London's lead index is set to close at a new all-time high, after it breached the 8,300 mark earlier this morning.
Much of Tuesday's success was helped by continued positivity surrounding the prospects of an upcoming rate cut and hopes issues in the Middle East may be resolved.
BP shares slipped around 1.7% after BP after the oil major reported a profit of $2.3 billion in the first quarter, a significant decrease from $8.2 billion in the same period last year.
Other risers included DCC, Persimmon and Barclays. Fallers included easyJet, Burberry and BP.
3.36pm: Apple announces new iPad designs
Apple has unveiled a new wave of iPad at its virtual event today, as part of its plans to keep in touching distance of tech firms accelerating ahead on the back of the AI boom.
New larger versions of the tablet, including a new iPad Pro and iPad Air design, were released at the Apple Event.
Apple introduces the new iPad Air, now in two sizes: 11" and 13" sizes #AppleEvent pic.twitter.com/v6aoPIt1Kk
— Apple Hub (@theapplehub) May 7, 2024
Apple introduces the new iPad Pro #AppleEvent pic.twitter.com/JJR1jk1WQT
— Apple Hub (@theapplehub) May 7, 2024
It comes hours after reports said the world's largest company was developing chips to power artificial intelligence software in data centres in a move to rival NVIDIA.
Codenamed Project ACDC, the technology giant is said to be designing the chips to run AI models, according to the Wall Street Journal.
3.19pm: Octopus Energy soars to £7 billion valuation
Octopus Energy has been valued at £7.2 billion, making it one of the UK’s top privately-owned companies.
It comes after shareholders Generation Investment Management and Canada Pension Plan Investment Board hiked their stakes in the energy firm.
Both investors recently spent a total of £300 million in upping their stakes in the UK’s largest electricity supplier, Sky News-cited sources said on Tuesday.
Canada Pension Plan Investment Board now has a 12% stake in Octopus while Generation Investment Management, chaired by former US vice-president Al Gore, now holds 13% of Octopus.
At the price of the latest deal, Octopus is worth £7.2 billion or 16% more than the £6.2 billion figure attributed after a fundraising round five months ago.
2.31pm: Wall Street opens a tick higher
US stocks opened slightly higher on Tuesday as a number of company earnings and reports helped move some stocks in early trading.
The Dow Jones was up 32 points at 38,884, while the S&P 500 jumped 7 points to 5,188.
Meanwhile, the Nasdaq lifted 8 points to 16,357.
Disney shares slipped over 7.5% after it reported stronger-than-expected earnings as it continues its transformation plan.
Revenues for the second quarter of the House of Mouse's fiscal year increased to $22.08 billion from $21.8 billion a year earlier, roughly in line with analyst expectations.
Pre-tax income tumbled 69% to $657 million due to goodwill impairments of $2,052 million to its Star India and entertainment networks.
Shares in exercise bike maker Peloton shot up by more than 16% after reports revealed a number of private equity firms were circling the business.
Peloton was recently forced to undergo a restructuring plan to cut annual run-rate expenses by US$200 million by the end of next year, with its current CEO deciding to step down.
2.16pm: Households spend on TV subscriptions over eating out
Households are opting for subscriptions to Netflix and other digital services over eating out, as new hit TV shows continue to drum up consumer interest.
Retail and fast food spending remained the same or fell backwards year-on-year in April, Barclays revealed after analysing user spending.
Meanwhile, digital content and subscription services experienced a 10.6% increase compared to 2023, with the success of newly released Netflix mini-series Baby Reindeer and Ripley being a key driver.
Restaurant spending fell by 13%, indicating consumers are still wary of overspending, with the potential for interest rates remaining higher for longer still a possibility.
Around half of Britain is believed to be concerned about how much they spend on food and drink, Barclays added.
Some 73% said they actively look out for ways to save cash when doing the weekly shop.
13.52pm: Bitcoin rises after string of volatile sessions
Bitcoin (BTC) lifted around 1% higher on Tuesday to US$63,742, but shifting rate expectations have played havoc on the world's largest cryptocurrency in recent trading sessions.
After plummeting to two-month lows at the tail end of last week, the world’s largest cryptocurrency flew no less than 6.4% higher on Friday, setting the stage for a strong weekend session.
The BTC/USD pair proceeded to fall 1.3% on Monday before a bullish engulfing candlestick pattern erased these losses this morning.
Investors appear encouraged by data released on Friday showing job growth that found the right balance of being strong enough to indicate a healthy economy, but not too strong to spark fears of further interest rate pains.
1.27pm: Wall Street to open flat
US stocks are set to open flat on Tuesday, with investors hoping it can find some more of the momentum which has pushed the indexes higher over the last four sessions.
Both the Dow Jones and S&P 500 are looking likely to edge marginally higher at 39,016 and 5,208 points respectively.
Meanwhile, the Nasdaq is positioned to open 20 points lower at 18,171.
David Morrison at Trade Nation said: "US stock index futures were a tad firmer in early trade on Tuesday, building on gains from the latter half of last week.
"Investors were relieved to wave goodbye to April which proved to be an unsettling one in terms of increased volatility.
"Sentiment soured significantly last month, following an uninterrupted rally since the end of October. But US stock indices have had a strong start to May and last week saw a couple of positive factors which contributed to the turnaround.
"The probability of the first interest rate cut has shifted back to September from November. On top of this, the possibility of two 25 basis point cuts this year has also risen."
1.11pm: UK in strong position ahead of GDP figures
Economists believe strong momentum from the UK's construction industry will add to the growing feeling the economy is recovering, placing it in a healthy position ahead of GDP figures on Friday.
EY UK chief economist Peter Arnold said: "Evidence of stronger activity in the construction sector comes on the back of similarly upbeat reports elsewhere in the economy, particularly from last week’s S&P Global services survey.
"After two years of stagnation, the economic recovery is becoming more established and is broadening.
"On Friday, the EY ITEM Club expects the Office for National Statistics (ONS) to report that GDP grew by 0.4% quarter-on-quarter in Q1. And though it’s still very early days, another solid increase in GDP in Q2 seems a feasible prospect."
GDP growth rates will be released at 7.00am on Friday.
12.53pm: Sales of Chinese-made Teslas tumble
Chinese-made Tesla sales slipped in April as the competition from domestic rivals continues to weigh heavily on demand for the group's EVs.
Some 62,167 of Tesla's China-made EVs were sold in April, slipping by 18% year-on-year and by 30.2% when compared with March.
Tesla models made in China are also shipped to markets in Europe, but a breakdown of the exports was not revealed.
It comes as Tesla continues to face intense pressure from Chinese rivals, who have been sucking up market share by selling EV models at cheaper price points.
New energy vehicle sales in China are expected to have hit 800,000 in April, rising by 33% compared to twelve months prior.
BYD, Tesla's largest rival, sold 312,048 passenger vehicles during the period, marking a 49% rise compared to 2023.
12.30pm: Oil prices slip on Isreal and Hamas peace talks
Oil prices fell on Tuesday as hopes for a ceasefire in the Gaza Strip grew ahead of a peace talk in Egypt later today.
Brent crude oil initially rose to US$84 a barrel after Israel turned down a ceasefire and sent tanks to Rafah, building on a 0.5% on Monday.
However, as reports revealed both Eygpt and Qatar were helping with talks for peace in the conflicting regions, oil prices slipped around 0.2% to US$83 a barrel.
West Texas Intermediate, the US-produced oil, also slipped 0.2% to US$78 a barrel.
12.11pm: Average UK house price to hit £346,500 in 2028
An average house in the UK in 2028 is expected to increase to £346,500 by 2028, a new forecast from Savills estate agent revealed.
British house prices are set to rise by £61,500 within the coming years after it was found the average value reached £285,000 in 2023.
An improved economic outlook for the UK led the estate agency to increase its predictions from a 17.9% jump to a 21.6% increase.
House prices are expected to rise by around 2.5%, with Savills revising its initial forecasts for a 3% drop.
Despite the predictions, the group believes external factors such as interest rate cuts and the general election will also affect prices.
11.52am: British pound slips ahead of BoE decision
The British pound slipped around 0.2% compared to the dollar, falling to US$1.254, as the economy awaits the Bank of England's interest decision on Thursday.
Matthew Ryan, head of market strategy at Ebury, said: "Sterling has outperformed all other G10 currencies in 2024 save for the US dollar, on the back of high interest rates, expectations that they will be kept high for longer, and now a string of positive developments on growth and the economy.
"The former two will be tested this week at the Bank of England meeting on Thursday, where we expect to see some clarification of the Monetary Policy Committee’s expectations for the timing of the first cut.
"Right now, markets do not expect this to happen till late summer at the earliest.
"Any validation of this outlook from Bank of England officials would add fuel to the pound’s rally."
11.32am: Consumer appetite for EVs weakens
Consumer demand for electric vehicles weakened in April as the private UK car market experienced a drop in sales.
New car registrations experienced its 21st consecutive monthly rise after it jumped 1% to 134,274 units in April, according to industry body SMMT.
However, this rise was solely driven by purchases from fleet operators such as car rental firms or taxi companies.
Fleet registrations rose by 18.5% during the period while private sales suffered a 17.7% drop.
Similarly, for EV vehicles, the overall industry experienced a lift in demand, with battery-powered vehicle sales jumping by 10.7%.
However, this was nearly completely generated from institutional buyers, with consumer purchases slumping by around 22%.
SMMT said: "While the overall increase in BEV demand is positive, urgent action is needed to re-enthuse private buyers into switching.
"The lack of government incentives for private motorists remains a barrier that cannot be overcome by industry alone."
11.10am: Fresh wave of rail strikes take place
More train strikes are set to take place in May as union members continue their long-running disputes over pay.
Aslef members at 16 different rail companies across the country will take part in industrial action between 7 May to 9 May, while also refusing to work overtime between 6 May and 11 May.
Dates for rail strikes:
Tuesday: c2c, Greater Anglia, GTR Great Northern Thameslink, Southeastern, Southern, Gatwick Express and South Western Railway
Wednesday: Avanti West Coast, Chiltern Railways, CrossCountry, East Midlands Railway, Great Western Railway and West Midlands Trains
Thursday: LNER, Northern Trains and TransPennine Express
10.49am: UK construction grows at fastest pace in over a year
Output from the UK's construction industry grew at its fastest pace in over a year, adding to signs the UK economy is improving.
S&P Global's UK construction PMI, which measures the industry's output every month, came in at 53 in April, improving from 50.2 the month prior and remaining above the 50 mark which separates indicates whether the sector is in decline or is expanding.
While the research found the sector was at its highest output in 14 months, the survey also indicated the housebuilding slowed at its worst rate since January.
Tim Moore, economics director at S&P Global, said: "Commercial construction outperformed in April and civil engineering also provided a solid contribution to overall growth.
"Lacklustre market conditions in the house building segment continued to weigh on activity."
10.30am: FTSE 100 holds onto early gains
London's blue chips are holding higher on Tuesday after jumping at the open to around the 8,300 mark, catching up with some of the healthy gains made by European and US markets on Monday.
“Whoever followed the advice to sell in May and go away will be kicking themselves if they disposed of UK shares from their portfolio. A new set of batteries has been fitted to the FTSE 100 and this bunny keeps on hopping,” Russ Mould, investment director at AJ Bell, said.
Gains to the lead index have come as hopes for a ceasefire between Israel and Hamas grow, with the two expected to participate in peace talks in Egypt later today.
Oil giant Shell also showed its influence on the index this morning, after its shares rallied 1.5% on the back of reports that it was selling its Malaysian gas station business to Saudi Aramco.
Other risers include DCC, Holiday Inn owner IHG, British Airways owner IAG, and Glencore.
Fallers include Phoenix Group, Smith & Nephew and Haleon.
9.59am: Accounting giants fined for £237 million bond firm collapse
Two of the big four accountancy firms have been hit with multimillion-pound fines for their audits for collapse minibonds group London Capital & Financial (LC&F).
LC&F collapsed before the pandemic after failing to have enough funds to pay back bondholders, leaving around £237 million owed to as many as 12,000 people.
PwC and Ernst & Young were fined by the Financial Reporting Council (FRC) for their involvement in the failed firm's finances.
E&Y will pay £4.4 million, while its auditor Neil Parker was fined close to £47,000 for the group's involvement in LC&F's 2017 accounts.
Meanwhile, PwC was given a £4.9 million sanction for its 2016 audit, with Jessica Miller, an auditor at the firm, receiving a £105,000 fine.
9.34am: House prices facing bumpy 2024 as interest rates hold
Economists have warned that UK house prices will continue to face pressure throughout the year, despite a slight lift in April keeping them flat for 2024 so far.
Peter Arnoal, EY UK's chief economist, said: "The recent rise in mortgage rates is likely to dampen the recovery in the short-term.
"And looking ahead, the recovery in prices is unlikely to be rapid given that poor affordability continues to significantly limit the pool of potential buyers and mortgage rates are only likely to fall back slowly."
Knight Frank's head of UK residential research Tom Bill added he expects house prices to rise by 3% in 2024, due to the increased downward pressure on prices as hopes of a rate cut "drifts further into the distance."
The Bank of England will meet on Thursday to decide on interest rates and is expected to maintain them at their current levels.
Victoria Scholar at Interactive Investor said: "It looks like mortgage rates will continue to remain elevated with the Bank of England poised to keep interest rates at 16-year highs of 5.25% this Thursday.
"Financial markets have been pushing back their forecasts for the timing of the first rate hike this year, with August currently pencilled into the diary, although that could certainly change depending on the data."
9.12am: Heathrow airport criticised for fresh cost-cutting round
Heathrow needs to drum up £400 million in funding after it was revealed by the aviation regulator that it would need to lower the amount it charges airlines to use its airport.
Boss Thomas Woldbye has launched a cost-cutting plan to combat the deficit, with one of his first moves being to outsource hundreds of security staff roles to third-party contractors.
However, said cost efficiencies have been criticised by unions such as Unite, which said it wants to challenge the £400 million figure as it believes a revised amount was provided by the Civil Aviation Authority in March.
Instead union officials believe Heathrow will gain £217 million from changes to passenger fees rather than the estimated loss.
Sharon Graham, Unite's general secretary, said: “Heathrow has no justification for outsourcing these workers’ jobs, other than its own greed.
“It is peddling the same old tired myths about the need for cost savings. But in truth, it is one of the world’s busiest airports and it has been making money hand over fist since the pandemic. Unite will not sit back and let these members be exploited.”
8.54am: The morning so far
The FTSE 100 notched up another record this morning after surging more than 80 points in opening exchanges to surge above 8,300 for the first time in history.
Shifting expectations of near-term rate cuts both in the UK and across the Atlantic are fuelling much of the market optimism.
Disappointing UK retail sales today could heap further pressure on policymakers to cut rates sooner rather than later.
Retail sales in the UK dropped 4.4% on a like-for-like basis in April 2024 from a year ago, far below expectations for a 1.6% growth and the worst reading since November 2019.
“Dismal weather and disappointing sales led to a depressing start to spring for retailers, even accounting for the change in timing of Easter," said Helen Dickinson, chief executive at the BRC.
Housing prices were also on the macroeconomic calendar today. The Halifax House Price Index edged up 0.1% in April after falling in March. The index is now up 1.1% year on year, with the average house in the UK now costing £288,949, representing a £168 gain from a month ago.
BP was the main point of focus on the company news front. The oil major reported a profit of $2.3 billion in the first quarter, a significant decrease from $8.2 billion in the same period last year.
The less-favourable comparison reflected exceptionally strong gas marketing and trading results in the first quarter of 2023, weaker fuel margins, and lower production at 914 million barrels of oil equivalent- 5.7% lower year on year. Shares fell 0.75% to 506.5p.
Haleon, Phoenix Group and Melrose were also down.
Despite the poor retail print, JD Sports and Marks & Spencer were among the top morning risers, alongside Ocado and Holiday Inn owner IHG.
The FTSE 100 came off slightly from the morning’s all-time high and was swapping for 8,281 at the time of writing.
8.41am: BP making a difference where it can
This is what Derren Nathan, head of equity research at Hargreaves Lansdown, said of BP’s first-quarter results: “Commodity prices are out of BP’s control but where it can make a difference it is.
“There’s a new plan to deliver cost savings of at least $2bn by the end of 2026 and some of the effects of lower prices have been offset by increased production.
There’s new production on stream in the Caspian Sea as well as onshore United States in the Permian basin. There’s also development activity in the North Sea and exploration in Africa.
“This may disappoint environmentalists but there’s also progress in the low-carbon space. It’s upped its ownership of key wind projects in the US, and closer to home its JV Net Zero Teesside Power, which aims to be one of the world’s first commercial-scale gas-fired power stations with carbon capture, is investing big with infrastructure contracts of around $5bn awarded.
“BP is investing in the future with $16bn investment still planned for both this year and next, but there are some pressures on current trading. Its refining margins are feeling the squeeze from higher input costs and at the pump the same dynamics are playing out in its fuels business.”
8.28am: FTSE 100 soars
The FTSE 100 rocketed up over 80 points in opening exchanges, briefly touching 8,300 for the first time ever.
As of 8.28am, the index was trading at 8,293, with the top risers including Fresnillo, British Airways owner IAG, JD Sports and Ocado.
8.20am: Time to ACT to list on Aquis
The Aquis challenger stock exchange is getting another member as engineering group Time to ACT seeks admission of its ordinary shares on the Aquis Stock Exchange Growth Market.
Time to ACT, which was incorporated in 2011 as GreenSpur Renewables, is seeking to raise £1 million to “de-risk growth”.
New and existed investors can participate in a placing and retail offer via the Winterflood Retail Access Platform.
Chris Heminway, executive chairman of Time To ACT, said: "Today marks a pivotal moment for Time To ACT as we embark on the next phase of our journey to address opportunities in the energy transition supply chain.
“Our decision to float on the AQSE Growth Market underscores our commitment to fostering innovation in this sector and developing engineering-led solutions for a cleaner, greener world.
"It's important to highlight that Time To ACT is well funded and does not require additional capital to list. Nonetheless, we believe that by broadening our investor base, including amongst retail investors, through the Placing and WRAP Retail Offer, we are providing the opportunity for new investors to become part of our exciting journey. I look forward to updating investors on our progress."
A specific listing date was not given in the regulatory announcement.
8.05am: Halifax House Price Index shows market is ‘wonky’
The Halifax House Price Index edged up 0.1% in April after falling in March.
Year over year, the index is up 1.1%, with the average house in the UK now costing £288,949, representing a £168 gain from a month ago.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said that while house prices have stabilised, with the index staying relatively flat over the first four months of 2024, “look a little closer at the annual figures and the market is wonky”.
Coles highlighted the north/south divide, with prices climbing in the former and dropping steadily in the south.
“This is a function of the fact that mortgage rates remain so stubbornly high,” said Coles.
“In the south, prices tend to be higher – the priciest are in London where the average home costs £539,336. It means mortgages are bigger, and so higher rates hit harder.
“Buyers are having to wait, and hope that rates fall, in order to afford the kind of property they really want to live in – or lower their ambitions and buy somewhere they can bear to live with instead.
“As a result, demand is down, and property prices are level or falling.”
Housebuilders were up following the HPI print, with Persimmon PLC (LSE:PSN) adding 2.1% and Barratt Development plc adding 2.3%.
The FTSE 100 is currently up 81% to 8,294.
7.45am: Retail sales fall short
Retail sales in the UK dropped 4.4% on a like-for-like basis in April 2024 from a year ago, far below expectations for a 1.6% growth and the worst reading since November 2019.
The British Retail Consortium said consumption was hit by wet weather and the early timing of easter, alongside persistent inflationary pressures and high borrowing costs.
Helen Dickinson, chief executive at the BRC, said: “Dismal weather and disappointing sales led to a depressing start to spring for retailers, even accounting for the change in timing of Easter.
“A dull, wet April dampened sales growth for clothing and footwear, especially outdoor sportswear, as well as DIY and garden furniture.”
7.37am: BP profits fall, seeks $2bn in cash cost saving
BP plc reported a profit of $2.3 billion in the first quarter, a significant decrease from $8.2 billion in the same period last year.
The less-favourable comparison reflects exceptionally strong gas marketing and trading results in the first quarter of 2023, weaker fuel margins, and lower production at 914 million barrels of oil equivalent- 5.7% lower year on year.
BP’s chief executive Murray Auchincloss said the oil major is seeking $2 billion in cash cost savings by the end of 2026 “through high grading our portfolio, digital transformation, supply chain efficiencies and global capability hubs”.
Shareholder returns remained strong though. The dividend per share was announced at 7.27 cents, up from 6.61 cents in the first quarter of 2023. BP also announced a $1.75 billion share buyback.
Looking ahead, BP expects upstream production to be “slightly lower” in the second quarter, though both reported and underlying upstream production for the full year should be “slightly higher compared with 2023”.
7.10am: Stocks to chalk up another record
The FTSE 100 is expected to breach 8,300 for the first time in history when markets open today.
This follows a killer week which saw the blue-chip index close Friday at a record 8,248.
Shifting expectations of near-term rate cuts both in the UK and across the Atlantic fuelled much of the market optimism.
Lacklustre UK consumption data released this morning could fuel even greater hopes of an interest rate cut sooner rather than later.
Retail sales in the UK dropped 4.4% on a like-for-like basis in April 2024 from a year ago, defying expectations for a 1.6% growth.
Meanwhile the Halifax House Price Index grew 0.1% from a month ago. While marking a solid turnaround from March’s 0.9% drop, it still fell slightly short of expectations of a 0.2% rise.
Footise futures have stocks opening at 8,302.