- FTSE 100 falls 27 points to 8343
- Rolls-Royce and Aviva maintain full-year outlook
- Scottish Mortgage gets double boost
4.15pm: Last few stories
Hargreaves Lansdown's co-founder and largest shareholder, Peter Hargreaves, is open to backing a take-private deal, but not at the price that a private equity consortium offered.
The former accountant and computer salesman, who owns around a 19.8% shareholding, has lately held discussions with investors about a transaction, Reuters reported this afternoon, citing three sources.
Moto, the motorway service station giant, is moving closer to being put on the market for over £2 billion by its owners, which includes Hargreaves Lansdown bidder CVC.
A 10% rise in Nvidia shares after its earnings smashed forecasts again has added a whopping $233 billion in value to the chipmaking titan, bringing its valuation to a new all-time high of $2.56 trillion.
“The next industrial revolution has begun,” declared chief executive Jensen Huang, as his company delivered a 262% year-on-year revenue increase to $26 billion.
3.41pm: UK shares down, US data mostly OK
UK shares are heading lower, as US data comes in mostly stronger than expected.
The FTSE 100 is down 35 points at 8335, while the FTSE 250 is down 59 at 20,651.
US PMI data came out a short while ago, with output rising to a two-year high this month, while US consumer confidence improved slightly, but less than expected.
S&P Global’s flash PMI survey shows an acceleration of business growth this month, which signals an improved economic performance.
The service sector was the driving force, with purchasing manager indicating the largest output rise for a year, with manufacturing also stronger.
May's flash composite PMI came in at 54.4 up from 51.3 in April's final report, while the consensus had expected only 51.1.
The manufacturing PMI came in at 50.9 up from 50, which was expected to remain, while the services PMI printed at 54.8, up from 51.3 and 51.3
US consumer confidence improved to -14.3 from -14.7 but not to -14.2 which was expected.
2.20pm: National Grid 'not a good look'
"It’s not a good look when a company reports a slump in profits and then goes cap in hand to shareholders," says AJ Bell's Russ Mould, as National Grid today did when asking current investors to stump up £7 billion to boost its energy network investment.
"Some investors might view this as a bit cheeky, but others will be salivating at the chance to buy shares in a generous dividend payer at a big discount to the market price," he adds.
He said the rights issue has "spooked investors about the state of the utility sector", as seen by falling share prices for United Utilities, Severn Trent and Drax.
"It’s clear that a lot of money needs to be invested to upgrade infrastructure and investors are now speculating that we could see other equity placings across the listed sector."
1.56pm: Royal Mail delay
Royal Mail owner International Distributions Services PLC (LSE:IDS) has confirmed that publication of its financial results has been delayed due to auditors asking for more time, which has historically been a worrying sign for investors.
With no new expected date for publication offered, the shares dropped 2% to 321p on the announcement.
Results had been planned to be published this morning.
Auditor KPMG has "requested additional time to complete the usual standard procedures after their internal reviews were late in the audit timetable, thereby delaying their final audit process".
Office wags suggested that perhaps some important documents had been sent by Royal Mail and this had been the reason for the delay.
The IDS board said it still expects profits adjusted operating profit "broadly in line" with previously published guidance, with the word 'broadly' also generally understood to be code for 'a bit lower'.
1pm: Big bet on the Tories
Although the FTSE is not offering huge excitement today, political betting markets have been active.
Bookmaker Star Sports says a punter has waded in with a five-figure bet on a Conservative majority in the July election.
A £30,000 bet was placed on a Tory Majority at odds of 25/1, following Rishi Sunak’s announcement of a snap election on 4 July.
The bet defies the current polls, which currently predict a large Labour majority.
Star said the odds of a Conservative majority at the general election shortened from 33/1 to 25/1 following Sunak’s announcement.
William Kedjanyi, the bookie's political betting analyst, said: “Sunak’s decision to call a snap election in July has clearly filled one punter with buckets of confidence in his party, who has placed a massive bet with us at 25/1. This would return £750,000 should the Conservatives achieve a majority."
He said after the punchy bet Star has sliced the odds further into 20/1.
“Despite drifting from 1/12, Labour remain the odds-on favourites at 1/8 for a majority vote in July, with a fair amount of support coming in for there to be no majority at all at 11/2 from 15/2," Kedjani said.
12.21pm: No delivery of Royal Mail results?
The owner of Royal Mail, International Distributions Services PLC (LSE:IDS), has not published final results that were scheduled for this morning (and still confirmed on its investor relations page this afternoon).
A week after the company's board said it was "minded" to agree to a £3.5 billion bid from Czech billionaire Daniel 'the Czech Sphinx' Kretinsky, IDS was due to publish its full-year numbers results at 7am this morning.
Kretinsky's EP Group proposed a bid on May 15.
12.02pm: Read across from HL to AJB
Even if another offer for Hargreaves Lansdown does not come, news of private equity interest "is likely to lead to positive share price read across to AJ Bell and other investment platforms, and sustained support for share prices", says UBS analyst Haley Tam.
"The private equity action could be seen as confirmation that further FCA consumer duty actions in this space are less likely."
What's more, Tam says private equity interest in this sector "could raise expectations of potential consolidation and/or other M&A activity in the space".
Banks and insurers could also see UK investment platforms as "attractive", the analyst adds, offering revenue diversity and boosting returns on invested capital.
"With UK assets widely perceived as inexpensive, the sector could also be attractive to an overseas platform with potential synergy benefits," she concludes.
11.56am: HL bid price 'opportunistic'
Some broker comments on the HL offer.
"Too cheap, still," says Panmure's Michael Caine fan Rae Maile (see below).
"The approach by private equity for Hargreaves echoes the broader trend across the UK market of low valuations being exploited by investors with the freedom to take a longer view."
He calls the approach "opportunistic and pitched at a level which would be a steal for the putative bidders".
A key question for investors, says UBS analyst Haley Tam, "is whether a further, higher offer will be forthcoming".
She does not explicitly state whether she thinks another bid is likely but outlines key factors such as Nordic Capital's experience in this sector, having previously took digital bank Nordnet private in 2016, the necessity of significant shareholder support and HL being midway through its own investment plan.
The 985p offer price is equivalent to 15.3 times 2026 forecast consensus underlying earnings and 15.2 times the 2027 consensus.
"In a hypothetical situation where HL cut platform and stock trading pricing to competitive levels, we estimate the immediate EPS impact could be as much as 25-50%. The potential for longer term upside from a return to market share gain could justify this short term downside to earnings," Tam says.
11.29am: Oilers lift Footsie, utilities drag
Helping the Footsie's recovery in the latter part of the morning has been oil prices rebounding from yesterday's three-month lows.
Brent crude futures are up 0.77% to $82.53 per barrel.
Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) are both up 0.6%, with all but one of the blue-chip index's top 10 in the green.
Top risers in the index are St James's Place, Persimmon, Rolls-Royce, BAE Systems and Scottish Mortgage.
National Grid is the biggest faller, down almost 10% after announcing plans for a £7 billion rights issue at a big discount.
Market analyst Victoria Scholar at ii points out that this wipes out all of its year-to-date gains, landing the stock in the red now so far this year.
Other utilities are also under pressure, with United Utilities and Severn Trent both down 4.5%.
Other former state-owned companies are down too, potentially connected to the election announcement.
BT Group PLC (LSE:BT.A) is down 2.8% and Centrica PLC is down 1.8% among the blue chips, while among the mid-caps Drax Group (LSE:DRX) PLC is down 8.6%, Pennon Group PLC 5.3% lower.
11.13am: AJ Bell blows the doors off
In a note entitled "In the words of Charlie Croker" - the character played by Michael Caine in The Italian Job - Panmure Gordon analyst Rae Maile gave his thoughts on AJ Bell's half-year numbers.
"Interim results are so far ahead of estimates that we made a moment of thinking that we were looking at the wrong company," the analyst chirps.
PBT of £61.4 million compared with Panmure's estimate of £48.9 million that were towards the top end of expectations, while revenue was also ahead of estimates and costs were lower.
"In the words of Charlie Croker … We expected a decent set of results, the outcome more than blew the doors off."
11.10am: PMI data doesn't change much
There was not much of a reaction to the UK PMI data earlier, says market analyst Kathleen Brooks at XTB, though the FTSE 100 and 250 are both in positive territory now.
She notes that GBP/USD fell to $1.27 on the news, but is now recovering. "Stocks are moving in unison after Nvidia results boosted overall market sentiment. Global sovereign bonds are mostly rallying, the UK is seeing bond yields fall back slightly after Wednesday’s big surge higher after the stronger than expected CPI print for April."
As the PMIs are often volatile from month-to-month, economist Peter Arnold of the EY ITEM Club said the strength of last month's balance "did look like an outlier compared with other indicators", so he "does not see May's softer outturn as being problematic".
"Indeed, it is consistent with GDP continuing to grow at a solid pace in Q2, and the recovery becoming more firmly entrenched."
One interesting point, Arnold says, is on inflation, with input cost inflation the weakest in seven months and output prices at their slowest growth in over three years.
"Following on the back of yesterday's large upside surprise for services inflation, these results offer some cause to hope that the official data will cool in the months ahead," he says.
"But the chances of a June rate cut look very low after yesterday's data, and softer survey data is unlikely to do much to change that."
10.55am: Book sales exceptional for Bloomsbury
Bloomsbury Publishing PLC (LSE:BMY) hailed an "exceptional" year following a 57% rise in annual profits and upgraded its forecasts for the current year.
Success has been driven by strong sales of titles from Sarah J Maas, Katherine Rundell and Samantha Shannon and the continued popularity of Harry Potter, 26 years on from the publication of 'The Philosopher's Stone'.
Maas, whose 16th book with Bloomsbury, 'Crescent City: House of Flame and Shadow', hit the bestseller list in January, notched an impressive 161% growth in sales that contributed to the 49% jump in revenues from Bloomsbury's consumer division.
10.43am: Rio Tinto should drop UK listing
An activist investor has called for Rio Tinto PLC to give up its primary London quote and therefore also its FTSE 100 listing, like rival BHP did three years ago.
London-based Palliser Capital, which has built up less than a 1% stake, has argued Rio’s dual Anglo-Aussie corporate structure made it difficult to pull off big acquisitions, the Financial Times reported.
It reckons Rio is trading at a $27 billion discount, or so it told a Sohn Hong Kong investment conference on Thursday.
Palliser’s chief investment officer James Smith, who is reported to have been in contact with management about its dual listing, said he believed there was upside of “nearly 40 per cent” in Rio’s shares.
9.59am: PMI services weaker
The UK's services sector has seen some cooling this month, according to the preliminary 'flash' PMI survey from S&P Global, though manufacturing is rebounding.
The composite purchasing managers’ index fell to 52.8 midway through May from 54.1 in April, taking the balance back to the level seen in March.
This was caused by a fall in the services PMI to 52.9 from 55.0 as growth in new orders cools.
On the flip side, the manufacturing PMI rebounded back into positive territory at 51.3 from 49.1 in April.
Another interesting development in May's flash survey was the weakness in the costs and prices balances, with input cost inflation the weakest in seven months, while output prices rose at their slowest pace since February 2021, with the service sector being the source of weakness in both sectors.
9.51am: Tate & Lyle climbs on Primient sale
Tate & Lyle PLC (LSE:TATE) climbed on Thursday morning after unveiling stronger profit for last year and the sale of its remaining stake in Primient.
Pre-tax profit climbed 18% to £287 million in the year to March, the food and beverage firm said on Thursday, despite a 2% fall in revenue to £1.65 billion on softer demand.
Tate & Lyle also announced the sale of its remaining 49.7% stake in ingredients producer Primient for US$350 million (£275 million).
“The sale of our remaining stake in Primient represents an important milestone for our business,” chief executive Nick Hampton said.
“With this sale, the transformation of Tate & Lyle into a fully-focused speciality food and beverage solutions business is complete.”
Shares climbed 4.7% to 708.50p.
9.19am: National Grid slumps on £7bn rights issue
National Grid PLC (LSE:NG.) fell almost 9% after unveiling plans for a rights issue alongside its full-year results, raising £7 billion.
The 645p price will raise funds for a £60 billion energy infrastructure investment plan.
“The board unanimously believes this comprehensive financing plan will allow the group to fund a significant increase in capital investment, maintain its strong investment grade credit rating, deliver for customers, and continue to achieve attractive shareholders returns,” National Grid said.
News of the plan sent shares down 8.7% to 1,030p in early trading.
“Understandably, this and the dilution effect of the rights issue have led their share price to plunge, eToro analyst Adam Vettese said.
National Grid was “ordinarily a steady-eddie defensive stock,” he added.
National Grid also reported that pre-tax profit slipped 15% to just over £3 billion, while per-share earnings fell 19% to 60p.
8.40am: Platforms in demand
Hargreaves rival AJ Bell PLC (LSE:AJB) is topping the FTSE 350 risers, up 10% after its half-year results impressed and it got a read-across boost from the sector bid interest.
Revenue rose 27% and pre-tax profit 47% as the platform steadily increased its share of the investing platform market, having passed the half-a-million customers mark in April.
A 21% interim dividend increase was also announced, with the mid cap also announcing a review of its capital-allocation policy toward a “progressive” policy.
The wider FTSE 250 is up 16 points while the FTSE 100 continues to sink, down 18 points or 0.22% now.
8.33am: Top risers
Let's brighten up the day for investors by looking at the blue-chip leaderboard.
One of the top risers is
Scottish Mortgage Investment Trust PLC (LSE:SMT), which is getting a double benefit today, as its results showed a return to positive growth and one of its big shareholdings, Nvidia, is due to heading higher today.
The return to growth followed two consecutive years of negative returns, with net asset value of its portfolio holdings increasing 11.5%, which was principally thanks to the trust’s two largest investments – chip sector giants Nvidia and ASML – benefitting from the AI boom.
The index's other big investment trusts are also in the green, F&C Investment Trust PLC (LSE:FCIT) and 3i Group PLC, up just under 1%.
Top of the list though, is St James's Place PLC, with many other financial sector names prominent in the leaderboard on the back of the Hargreaves Lansdown bid interest, even though it seems a bit of a lowball offer.
St James's is up 4.9%, Schroders PLC 1.2% and Barclays PLC, Prudential PLC (LSE:PRU), HSBC Holdings PLC all around 0.8%
Marks & Spencer Group PLC is continuing to rise as its numbers from yesterday are further chewed over.
8.15am: FTSE 100 falls again
The FTSE 100 climbed a few points higher in initial trades but has quickly resumed its familiar pattern from recent days by squelching into the red.
After a quarter of an hour, the blue-chip index was down 10 points at 8360.
Four blue-chips stocks going ex-dividend is knocking 1.84 points off the total, those being Imperial Brands, Whitbread, Diploma and DCC.
Rolls-Royce is one of the fallers, down 1% after its first-quarter update.
Aviva is down 0.1% after its own. Both companies kept their outlook unchanged for the year.
8am: Not-West?
Rishi Sunak's calling of a general election for the first Thursday in July is likely to derail the government’s retail sale of NatWest Group PLC (LSE:NWG).
The multibillion-pound sale to private investors had been a key plan of Chancellor Jeremy Hunt, which he confirmed in the Budget in March.
Treasury officials have told various media that those plans have now been paused, with one source telling Sky News that the plans have been put "in the deep freeze".
7.57am: Aviva hails 'excellent' start
Likewise, Aviva PLC (LSE:AV.) has also reported a strong start and kept its full-year outlook unchanged.
General insurance premiums increased 16% to £2.7bn and workplace pensions business generated net flows of £2bn as 136 new schemes were won.
In the bulk purchase annuity market, retirement sales were up 13%. A solvency shareholder cover ratio of 206% was above some analyst forecasts.
The life insurer's boss Amanda Blanc felt the first-quarter numbers were "excellent" and said the group was in "great health".
"We have clear competitive advantages - in our brand, our scale, and our diverse business - which are driving consistently strong performance, and giving us real optimism about 2024," she said.
7.39am: Rolls-Royce has 'strong start'
Rolls-Royce Holdings PLC (LSE:RR.) chief executive Tufan Erginbilgic said the engine maker made a "strong start" in the first four months of 2024 and maintained guidance for the full year.
In the FTSE 100-listed group's civil aerospace arm, the keenly watched long-term service agreement large engine flying hours (EFH) figure was said to have returned to 100% of the levels from pre-pandemic 2019.
This was lower than some more optimistic analysts expected.
A key driver was the continued recovery of international air traffic in Asia and the growing fleet of aeroplanes that have RR engines installed.
For the full year, Erginbilgic said expectations for large EFH at 100%-110% of 2019 levels, 1,300-1,400 shop visits and 500-550 OE deliveries are all unchanged.
He said Rolls remains "on track" to deliver the annualised cost reduction of £200 million by the end of next year, with redundancy consultations "advanced".
7.24am: Hargreaves Lansdown rejects offer
The board of Hargreaves Lansdown PLC (LSE:HL.) has rejected a bid from a consortium of private equity and the Abu Dhabi investment fund.
A price of 985p per share was the latest of two approaches from the consortium made up of CVC Advisers, Nordic Capital, SCSP and Platinum Ivy (a subsidiary of Abu Dhabi Investment Authority), which issued a statement after markets closed yesterday.
Hargreaves shares finished yesterday at 979p, after a late spike as speculation about a bid filtered through, having started the day at 931p.
"The board confirms that it unanimously rejected the Proposal on the basis it substantially undervalues Hargreaves Lansdown and its future prospects," a statement this morning says, adding that it will update the market at the full year results on 9 August.
7.16am: FTSE 100 to inch higher
After a two-day pullback, the FTSE 100 is predicted to hold its ground on Thursday, after confirmation that a general election is coming in six weeks.
In fact, spread-betters have called the blue-chip index four points higher, following a day when it lost 46 points to close just above 8370.
Overnight, the major US stock indices finished in the red but NVIDIA jumped 6% after the closing bell as its earnings continued to roar higher and beat Wall Street estimates.
The Dow Jones finished 0.5% lower, the S&P 500 down 0.3%, the Nasdaq Composite 0.2% and the small cap Russell 2000 dropped 0.8%.
"Markets had an eventful day yesterday, with various headlines that drove swings in both directions. As we go to press this morning, sentiment has turned more positive," says macro strategist Henry Allen at Deutsche Bank, pointing to futures on the S&P 500 up 0.65% following an upbeat outlook from Nvidia.
He said markets lost ground earlier in the day after the minutes of the latest Fed meeting were "on the hawkish side", while bonds sold off after UK inflation surprised on the upside to serve "as a reminder that the path back to target may not be a smooth one, and led investors to dial back the chance of rate cuts across Europe".
Market analyst Ipek Ozkardeskaya at Swissquote Bank said the UK election news combined with the inflation print washed out the expectation of a June rate cut from the Bank of England and lifted the pound, which hit the FTSE.
"Consequently, Cable is pushing higher above the 1.27 level right now, but the upside potential will likely remain capped as – if nothing – the uncertainty surrounding the UK general election will most probably tame appetite for sterling in the next six weeks," she said.