- Blue chips up 43 points to 8,357
- Wood Group rejects takeover offer
- Wincanton deal probed by CMA
16.49: Another record close
The FTSE 100 ended Wednesday's session with yet another record closing high, adding just over 40 points or 0.5% to finish at 8,354.05.
It was the fourth day of record closing highs.
BA owner International Consolidated Airlines Group SA (LSE:IAG) was the top riser for the day, up 3.7%, followed closely behind by easyJet PLC, aero engine maker Rolls Royce Holdings PLC and aerospace component maker Melrose Industries PLC.
There was no particular news on the day, though IAG is due to report results on Friday and a Financial Times article today focused on "lowly valuations" among airlines.
Tomorrow, we have the Bank of England decision to look forward to – could it potentially be a party pooper, damp squib or keep the party going?
15.58pm: FTSE 100 on track for another record close
London's blue-chip index is placed to close at another record high after rallying 0.5%, or 43 points, to around 8,357.
Helping push the index forward was its largest constituent AstraZeneca, having jumped 1.5% after revealing it would be pulling its covid vaccines worldwide markets.
AZ said the decision was because there is a "surplus of available updated vaccines", despite admitting months ago that its version can cause a rare and dangerous side effect.
Other risers include British Airways owner IAG, Beazley, easyJet and Informa.
Meanwhile, Ocado and Phoenix Group were the only two companies to experience a fall greater than 2%.
In the FTSE 250, John Wood Group rallied around 16.5% after rejecting a takeover bid from Sidara. The deal of 205p represented around a 25% premium to today's opening price.
Wetherspoon also surged close to 4% after it reported a surge in demand at its pubs, thanks in part to the rise of Guinness.
15.43pm: Markets brace for tomorrow's interest rate decision
With the market heading towards yet another record close, investors will be hoping Thursday's Bank of England meeting goes off without a hitch.
UK interest rates were kept unchanged at 5.25% last time by the Bank of England, and the market is expecting more of the same tomorrow.
Rob Morgan, chief investment analyst at Charles Stanley (LSE:CAY) said: "The BoE can cut before the Fed, but it will feel limited in how far it can go if the US doesn’t follow suit. It will therefore view the latest relatively weak US payrolls data as something of a relief.
"It’s a sign that the lagged effect of higher interest rates is finally taking its toll on the American economy and that Fed policy will be reasonably aligned with other central banks.
"The first reduction in UK interest rates from 5.25% will probably occur in August and there could be one, maybe two, further cuts this year.
"This will be seen from the BoE’s point of view as moderately restrictive still, and an appropriate balance given the need to both ensure the downtrend in price rises continues and provide a platform to cut more quickly in the event of an economic slowdown."
15.22pm: Wincanton deal probed by competition regulator
Wincanton's buyer is being probed by the Competition and Markets Authority (CMA) over the £762 million deal to acquire the FTSE 250 group.
GXO Logistics agreed to buy the haulage group back in February of this year, but the watchdog now wants to check if the deal will lead to higher prices for businesses.
Supermarkets like Asda and Sainsbury's are likely to be asked for their opinions on the deal as part of Wincanton's offering includes moving goods across the country for the companies.
The CMA will either clear the deal after an eight-week probe or head towards a longer in-depth investigation which lasts four months.
14.30pm: US stocks open lower
Wall Street opened lower after several big-name tech firms suffered dips in share prices at the open.
The Nasdaq slipped 0.6% to 16,230, while the S&P 500 dropped around 0.4% to 5,169.
Meanwhile, the Dow Jones remained unchanged at 38,861.
Joining Uber in its slump was Intel, dropping more than 2% after it lowered its second-quarter sales guidance.
It comes after Washington revoked certain export licences granted to American chipmakers for supplying goods to Huawei, following the Chinese tech giant's launch of an AI computer using an Intel chip.
America's Department of Commerce did not specify which permits were cancelled, though the decision is part of ongoing US restrictions on technology exports to Huawei since 2019, citing security concerns linked to the Chinese military.
According to reports both Intel Corp and Qualcomm Inc are affected by the embargo.
Tesla shares stumbled around 3.5% after it reports revealed US prosecutors were looking into whether it committed wire fraud during its analysis of its Autopilot systems.
14.21pm: London missing out on billion pound IPO boom
European stock markets are leaving London in the rearview mirror as new cash is funnelled into mainland exchanges rather than Britain.
In 2024, the UK has taken a measly 2% of the £9.5 billion (US$11.9 billion) raised through IPOs in Europe, data from Bloomberg found.
It places the capital's share of the company's flotation market at its lowest point in decades, having previously secured an average of 31% of IPOs during 2012 and 2023.
UK stocks continue to trade at a considerable discount to both European and US exchanges.
It has also led to a mass exodus of the LSE, with companies swapping listings for the US or being taken private.
Charles Hall, head of research at Peel Hunt, said: “The UK has become relatively unattractive as a listing venue.
“The level of fund outflows has impacted both valuations and capital available for IPOs.”
Hall previously warned that the FTSE small cap index could be empty by 2028 if the current rate of exits continue.
13.57pm: Monzo sets sights on US with new fundraise
Monzo has raised a fresh US$190 million bringing its total funding generated this year to US$610 million.
Google's independent growth fund CapitalG is said to have been involved in the fundraising, joining Airbnb and Uber investor Hedosophia and Singapore’s Government Investment Corporation (GIC).
Valuing Monzo at around US$5.2 billion, the latest fundraising improves on March's funding round, when the group brought in US$430 million on a US$5 billion valuation.
Boss TS Anil says the new cash will be used to build new products, such as a pension offering, and help it expand into new markets, including the US.
“What’s exciting to me is that, as we pursue that mission of changing people’s relationship with money, we’ve built a business model that is congruent with that as well, with this model that is built entirely around the customer," Anil said.
13.36pm: Wall Street set to open lower
US stocks are poised to open lower today, looking to break the long winning streak which started in December last year.
All three indexes are looking to open down, with Nasdaq futures implying a drop of 85 points, the Dow Jones looking at a 46-point fall and an 18-point slip for the S&P 500.
Despite the downturn, there have been several stocks making several pre-market gains following the release of results.
Reddit (NYSE:RDDT) shares popped around 12% after it reported and optimistic first set of results since listing.
For Q2, the social media platform guided adjusted EBITDA between break-even and $15 million, better than the $18.2 million loss expected by analysts.
Revenue is seen in the range of $240 million and $255 million, ahead of estimates of $223.8 million.
Moving the other way was Uber, which slipped around 9% after it suffered an unexpected loss.
A net attributable loss of $654 million was reported for the first quarter and reflected $721 million of net unrealized losses related to the revaluation of equity investments.
13.22pm: John Wood Group turns down £1.4 billion offer
John Wood Group, the FTSE 250 engineering and consulting group, has turned down a takeover offer from its Dubai-based rival Sidara.
Sidara's offer valued the group at over £1.4 billion, or 205p per share, representing more than a 25% premium to Wood's opening price on Wednesday.
In response to the bid, the Scottish company said Sidara had "fundamentally undervalued Wood and its future prospects”.
Shares in Wood Group rallied close to 13% on the back of the news.
Sidara now has until 5pm on June 5 to present an improved offer.
13.02pm: Puma shares rally on optimistic sales outlook
Puma, the sports clothing retailer, saw its German-listed shares rally 5% today after it reiterated its full-year guidance despite demand remaining under pressure.
Sales for the period reached €2.1 billion, a 3.9% year-on-year decrease, during the first quarter of the 2024 financial year.
Much of the decline was led by consumers being more selective in their purchases, macroeconomic challenges and unfavourable exchange rates.
Nevertheless, management reiterated forecasts that sales would grow by a mid-single digit during the full year.
Pippa Stephens, senior apparel analyst at GlobalData, said: "These results show a marked improvement on Q4 FY2023, when revenue dropped by 9.8%, signalling a more positive outlook for the rest of the year.
"Despite its operating profit falling by 9.4% in Q1 to €159.0m, it also expects this to come through relatively in line with last year at between €620m and €700m.
"With several key sporting events happening this year, including the Olympics and UEFA Euros, Puma launched its first global marketing campaign in 10 years in April 2024, which highlights the brand’s focus on speed and features athletes like Jack Grealish and Kai Havertz.
"This will allow it to build top of mind appeal among consumers, and hopefully drive further growth of its core categories throughout the rest of the year.”
12.40pm: TSB to shut branches and axe hundreds of jobs
Banking firm TSB said it would be closing 36 of its branches and axing 250 jobs as it continues its focus on digital banking.
Job cuts will take place in the group's fraud department and for workers at the closing branches, a spokesperson for Unite union revealed, before labelling the choice a "grave mistake".
TSB said: "The decision to close a branch is never taken lightly, but our customers are now doing most of their banking digitally and we need to move to a better balance of digital and face-to-face services.
"We remain committed to a national branch network and through innovation and integration with video, telephone, digital, branch and other face-to-face services TSB customers have more ways to bank with us than ever before."
Andy Case, a Unite regional officer, responded to the decision: "At a time when customers are increasingly concerned about financial fraud and often need support from a local bank branch this is the wrong course of action."
12.24pm: BrewDog founder and CEO steps down
BrewDog co-founder James Watt is stepping down as chief executive of the Scottish craft beer giant after 17 years in the role.
Chief operating officer James Arrow will take over the helm, with Watt remaining on the group's board as a non-executive director.
Watt had told the board about his intentions to step down last year as he looks to move his focus to new projects and interests.
Maintaining his 21% stake in the business, Watt said he will take on the new non-executive role of "captain and co-founder".
An excerpt of Watt's goodbye post Source: Linkedin.com
Read here for more on Watt's history at Brewdog.
12.01pm: Wetherspoon's Guinness sales boost helps owner Diageo
Wetherspoon, the budget pub operator, traded more than 3% higher today after the FTSE 250 said annual profits would come in at the top end of guidance due to renewed demand following a turbulent time for the hospitality industry post-pandemic.
While ales and coffee helped drum up additional sales, boss Tim Martin was left celebrating another pub favourite.
“The gods of fashion have smiled upon Guinness, previously consumed by blokes my age, but now widely adopted by younger generations,” he said, explaining that the stout had been a fan favourite over recent periods.
However, it wasn't just Wetherspoons cheering.
Diageo, the owner of Guinness, saw its shares pop more than 1.8% to become one of the biggest FTSE 100 risers today.
Earlier this year, Diageo boss Debra Crew said the drink was shaking its image as a ‘rugby lad’ beverage and is instead attracting more female drinkers.
Thanks to influencers and celebrities such as Kim Kardashian and Kate Middleton showcasing their love for the drink, female Guinness drinkers rose by 24% in the UK.
11.44am: Bitcoin steady as ETF outflows rise
Bitcoin traded flat on Wednesday as it hovered around the US$62,360 mark, with the world's largest cryptocurrency having closed 1.3% lower on Tuesday.
Net outflows in the exchange-traded fund space continue to cause price compression on spot prices.
Matteo Greco, research analyst at Fineia International, stated: “Last week continued the trend of net outflows for BTC ETFs for the fourth consecutive week, indicating a short-term negative trajectory observed over recent weeks.
“ETFs with BTC as the underlying asset saw approximately $433 million in outflows during the week, up from the $325 million outflows seen the previous week."
11.23am: London Eye kept permanently on London's South Bank
Merlin Entertainments (AIM:MERL), the owner of tourist attractions such as Legoland and Thorpe Park, has welcomed the Lambeth Council's decision to keep the London Eye permanently on the capital's South Bank.
Councillors in the London borough agreed to discharge a condition in the attraction's original 2003 planning permission, which requires the authority to decide on keeping it beyond 2028.
At least 1% of the London Eye's annual turnover must be paid towards the upkeep of the giant wheel and surrounding areas, but will now remain permanently in its location.
Owner Merlin Entertainment renamed the attraction the Lastminute.com London Eye back in 2019 after agreeing a sponsorship deal with the travel giant.
Scott O’Neil, chief executive of Merlin, said: "It is impossible to imagine the London skyline without the iconic structure of the London Eye, and with its long-term future secure, we will continue to invest and expand Merlin’s presence."
11.01am: Pound falls ahead of BoE rate decision
Britain's pound has slipped again ahead of the BoE's decision on interest rates tomorrow.
Sterling dropped around 0.2% compared to the dollar, reaching US$1.248. It was also down 0.2% versus the Euro at 86p.
Markets aren't expecting a rate cut at tomorrow's meeting but are hoping for clearer evidence of whether the first round of lowering will come in June or August.
Jessica Shuman at Insight Investment said: "Although we haven’t heard from many members of the Monetary Policy Committee it is highly unlikely that the Bank of England will adjust its policy rate this week but, with the start of the easing cycle rapidly approaching, all eyes will be on the signalling that comes from both the voting patterns and accompanying statement.
"Ultimately, April’s inflation data, released later in the month, is likely to prove critical in any decision.
"A better than expected number could see July come into play, but if inflation proves stickier than expected there is no rush to cut.
"We have long held the view that this easing cycle will be later and shallower than many people expect, with inflation likely to be structurally higher in the decade ahead."
10.44am: British biotech joins LSE exodus
Oxford Cannabinoid Technologies, the pharmaceutical company, has become the latest company to exit the London Stock Exchange after it felt the market was undervaluing it.
The cannabinoid medicine developer issued a statement detailing its intention to delist from the LSE and should shareholders approve the plans, the stock is expected to be removed by June 6.
It comes as hordes of companies exit Britain's stock exchange, searching for better valuations in other countries or for being snapped up by privately owned buyers.
Last month, UK-based biotech firms C4X and RedX both departed the stock exchange.
Clarissa Sowemimo-Coker, chief executive at Oxford Cannabinoid Tech, said: "The UK capital markets are facing particularly challenging times and many biopharma businesses like ours are re-evaluating whether it is the right home for them.
“These market conditions compromise our ability to deliver on our core mission - bringing help to people living with debilitating conditions. We anticipate that as an unlisted company, a far larger pool of capital may be available to us, and therefore it is right for us to make this change."
10.17am: Softbank closes in on troubled UK semiconductor manfuacturer
Softbank is circling Graphcore, the troubled British semiconductor startup which once reached a valuation of £2.3 billion.
A sales process for the microchip firm was launched back in February after it struggled to find a sustainable route into the AI industry.
New funding would help offset the heavy losses suffered by Graphcore over recent years and keep the company in a position to remain in operation.
Softbank is believed to have begun discussions with the tech group a few months ago, but the talks have entered an advanced stage in recent days, reports revealed.
Some stakeholders in Graphcore have marked up the valuation of their shares in recent months, indicating that a new deal could see the company valued at around £400 million.
A buyer would also need to find a way to grow demand at the company, with it having experienced a 46% decline in revenues last year despite interest in the microchip industry booming.
9.55am: AstraZeneca jumps on covid vaccine withdrawal
London's blue-chip index is holding higher on Wednesday, continuing the rally which has seen the FTSE 100 smash its records multiple times.
Helping push it higher today was AstraZeneca, the index's largest constituent, which surged 1.6% after it said it would be withdrawing its COVID vaccine from global markets.
AZ said the decision was because there is a "surplus of available updated vaccines", despite having admitted months ago that its version can cause a rare and dangerous side effect.
Other risers included British Airways owner IAG, Informa and Melrose.
Meanwhile, Antofagasta and BP were the only two stocks to fall by more than 2%, the latter of which still feeling the bite from reporting a shrinking of profits during its most recent quarter.
9.36am: Sweden joins in on cutting interest rates
Sweden has joined the likes of Switzerland and the Czech Republic in cutting interest rates, dropping to 3.75% from 4%.
Riksbank, the country's central bank, slashed its policy rate for the first time in eight years after inflation began to slow to its target.
Markets had expected the cut and were told by the central bank to prepare for an additional two more in the second half of 2024.
Riksbank kicks off easing with first Swedish rate cut since 2016 https://t.co/FTkODH1KRT via @nicrolander pic.twitter.com/Id7tkRKsAd
— Zoe Schneeweiss (@ZSchneeweiss) May 8, 2024
Switzerland became the first major economy to cut its interest rates back in March, dropping from 1.7% to 1.5% before Czech and Hungarian central banks followed suit.
Europe's central bank is likely to join in cutting rates in June should inflationary pressures continue to subside, while economists are predicting an August rate cut for the UK.
9.11am: Hundreds of defence companies debanked by high street lenders
High street lenders have begun debanking hundreds of defence companies as they become more strict on their internal ethics policies, sparking fears that the UK's national security may be at risk.
Santander and Lloyds closed the accounts of around 300 "public administration and defence" companies throughout last year, reports from the Telegraph revealed on Wednesday.
Other leading lenders failed to provide a breakdown of their debanking statistics, indicating the figure may be higher.
While some of the accounts were removed for prolonged inactivity, others were cut due to the ethical concerns surrounding working with a weapons company.
The findings have been met with backlash from both MPs and members of the defence industry.
Treasury Committee chairman Harriett Baldwin said: “We cannot have organisations in this country systematically debanking legitimate firms or industries because their board turns its nose up at their line of work. If their work is legal then they should be able to access a bank account.”
8.52am: The morning so far
As has been the running theme for a while now, the FTSE 100 index chalked up another record high this morning.
Blue chips surged 36 points to 8,350 in opening exchanges, following yesterday’s supersized 100-point rally.
No single constituent was responsible for this morning’s sustained momentum, with top risers including Informa, easyJet, Diageo, British Gas owner Centrica, DS SMith and HSBC.
On the company news front, FTSE 250-listed motor insurer Direct Line restated its £100 million cost-cutting spree in a first-quarter update that saw gross written premiums and associated fees for ongoing operations rising by 15% year on year.
Firm-wide in-force policies were 1.8% lower year on year, with the motor segment the main culprit due to “the continued repricing of the motor book”. Shares were down 2%.
JD Wetherspoon boss Tim Martin had a few things to be chipper about in the pub chain’s trading update, with like-for-like sales increasing 5.2% and year-to-date sales up 8.3%.
“The gods of fashion have smiled upon Guinness, previously consumed by blokes my age, but now widely adopted by younger generations,” exclaimed boss Tim Martin. The pub chain’s shares added 3.5%
Things weren’t so great at online fashion retailer Boohoo. Revenues decreased 17% to £1.46 billion in the 2024 financial year, leading to statutory losses before tax of £159.9 million compared to £90.7 million of losses in 2023.
Net debt multiplied from just £5.9 million to £95 million due to increases in capital expenditure and inventory purchases to facilitate US-based expansion. Shares were off 4.1%.
8.28am: Footsie marches higher
The FTSE 100 is on the move again today, adding another 35 points to hit a fresh all-time high of 8,348.
A diversity of blue chips are leading the charge, with Informa, easyJet, Diageo, British Gas owner Centrica and DS Smith at the top of the risers list.
8.17am: German production stalls
Industrial production stalled in Germany in March, dropping by 0.4% month on month from a 1.7% gain in February.
It marks a disappointing retreat for Europe’s largest economy, which has struggled to crawl out of a recession caused by surging energy and borrowing costs.
As much as the full batch of encouraging and more positive data over the last few weeks had been balm for the German economic soul, this morning’s industrial production data is a good reminder that a bottoming out does not automatically lead to a strong recovery,” said Carsten Brzeski, global head of macro at ING.
“In fact, demand for German industrial goods has not yet turned around and after an initial inventory correction at the turn of the year, the expected inventory reduction has stalled again.
“Also, capacity utilisation in German industry has been on a declining trend since the war in Ukraine started and industrial production is still some 8% below its pre-pandemic level.”
8.07am: JD Wetherspoon marches higher, ‘Gods of fashion’ smile upon Guinness
“The gods of fashion have smiled upon Guinness, previously consumed by blokes my age, but now widely adopted by younger generations.”
JD Wetherspoon boss Tim Martin had a few things to be chipper about in the pub chain’s trading update for the 13 weeks to 28 April.
Like-for-like sales increased 5.2%, despite the comparable period in 2023 containing a bank holiday weekend.
Year to date, sales are up 8.3%.
Alongside the newly trendy Guinness, Martin said traditional ales are picking up momentum, “with Abbot Ale, Ruddles Bitter and Doom Bar showing good growth, as indeed are ales from the many small and micro brewers with which we trade”.
Wetherspoon said it expects profits in the current financial year to be “towards the top of market expectations”.
Shares bounced 3.4% higher in opening exchanges.
7.46am: Direct Line restates £100mln cost-cutting plan in first-quarter update
Direct Line has published a first-quarter trading update that focused on the numbers rather than the takeover speculation that has engulfed the motor insurance firm this year.
Total gross written premium and associated fees for ongoing operations rose by 15% year on year in the first quarter.
Motor saw an 18.3% increase in premiums to £424.3 million, while the smaller home and commercial segments increased 14% and 15% respectively.
Motor claims trends and margins developed as expected, with estimated written margins maintained above 10%.
Firm-wide in-force policies were 1.8% lower year on year, with the motor segment the main culprit due to “the continued repricing of the motor book”.
Chief executive Adam Winslow reiterated his intention to bring costs down dramatically at the FTSE 250-listed group.
“We have announced a number of significant hires over the last few weeks. I am confident that with the new leadership team in place, we can deliver run-rate annualised cost savings of at least £100 million by the end of 2025 and a net insurance margin, normalised for weather, of 13% in 2026,” he stated.
7.29am: Losses, debt pile up for Boohoo
Online fashion retailer Boohoo’s revenues decreased 17% to £1.46 billion in the 2024 financial year, leading to statutory losses before tax of £159.9 million compared to £90.7 million of losses in 2023.
All the while net debt multiplied from just £5.9 million to £95 million due to increases in capital expenditure and inventory purchases to facilitate US-based expansion.
Cash inflow was minimal at £100,000, significantly reduced from the previous year's inflow of £130.9 million.
Chief executive John Lyttle attempted to redirect focus on forward opportunities for the group.
“We continue to take actions to deliver on our goal of bringing the entire group back to profitable growth,” he said.
“In FY24, we completed our investment cycle with the launch of our US distribution centre and the successful delivery of our Sheffield Automation project. Sheffield is already delivering significant efficiency improvements, which, together with the traction of Debenhams marketplace, is generating margin improvement across the group.
“We have also taken steps to transition several of our labels over onto Debenhams marketplace to drive enhanced profitability. This proved effective during the year and is something that will drive additional profitability going forward.
“These factors, combined with improving market conditions, give us strong confidence in our medium-term outlook.”
7.09am: Stocks to move higher after closing at record
The FTSE 100 is expected to gain 15 points to 8334 when markets open today after notching up a new record on Tuesday.
Blue chips flew a full 100 points yesterday as all but three of the top-30 constituents chalked up green candlesticks, thanks to optimism about interest rates coming down soon.
The Bank of England convenes tomorrow and while a cut is not widely expected, attention will be on forward guidance and messaging.
There is no major macroeconomic news today, barring used car prices in the US this afternoon.
On the company news front, Boohoo and JD Wetherspoon will soon have their earnings out, while Shopify, Airbnb Uber and Arm report in the US