- FTSE 100 32 points higher at 8,263
- US tech index falls
- NatWest sees government stake cut
4.08pm: FTSE 100 to close Friday in high spirits
With less than 30 minutes left in the week’s trading session, the FTSE 100 blue-chip index look set to finish Friday over 40 points higher.
It was still a bearish weekly session overall though, with the index shedding some 50 points in total.
3.54pm: British supermarkets set for Euro lift
Market researcher NIQ expects British supermarkets to benefit from the upcoming Euro 2024 football championship to be held in Germany from mid-June.
England and Scotland are both set to make an appearance in the tournament and with 45% of households reportedly planning on tuning in, snacks, drinks and booze sales could see a substantial lift.
NIQ said warm weather in May drove a 3.3% year-on-year sales uplift in the four weeks ending 18 May.
"It was the warm weather which helped to move the dial in terms of shopper spending at the UK supermarkets, more so than food inflation, which is expected to remain at around 3% for the next few months," Mike Watkins, NIQ’s UK head of retailer and business insight.
3.40pm: US markets give mixed signals
Nasdaq 100 opened 1% lower this Friday to trade at 18,339 after the first hour of US trades.
The Dow Jones Industrial Average was 0.1% higher at 38,150, while the broader S&P 500 index dipped 0.4% to 5,214.
Among the top Nasdaq movers were Zscaler Inc, Warner Bros, Sirius XM, Walgreens and Lululemon.
On the macro calendar, the annual US PCE inflation rate steadied at 2.7% in April, pausing after an acceleration in March and matching market forecasts.
2.53pm: Santander hacked
Black-hat criminal hacker group ShinyHunters has allegedly stolen the data of 30 million Banco Santander (LSE:BNC) customers and staff across Spain, Chile and Uruguay.
Santander disclosed a security breach earlier this month, but the extent of the breach has just come to light after hackers put the data up for sale on the dark web.
According to X account ‘Dark Web Informer’, ShinyHunters is selling the data for $2 million (£1.57 million).
????#DataBreach Update: ????
????????#Spain: The allegedly stolen data from Santander has also been put up for sale on the well-known hacking forum BreachForums, directly by the administrator ShinyHunters.
ShinyHunters is the same threat actor who is selling the details of 560 million… https://t.co/P3payBytOb pic.twitter.com/7OnRpjydZu
— HackManac (@H4ckManac) May 31, 2024
28 million credit card numbers and six million account numbers and balances are allegedly in the data package.
Santander told the BBC is "proactively contacting affected customers and employees directly”.
ShinyHunters is linked to a Ticketmaster hack that stole hundreds of million of user details, ticket sales and even card data mere days ago.
Proactive has reached out to Santander to ask weather UK-based accounts have been affected.
2.24pm: European inflation comes in hotter-than-expected
European inflation rose to a fourth-month high in May, potentially throwing a wrench in the works ahead of the European Central Bank's interest rate decision next week.
Inflation rose to 2.6% from 2.4% in April, the largest rise in the figure since February.
Analysts had been preparing for prices to increase by 2.5%, meaning it could impact the ECB's decision on whether to cut interest rates at its meeting on Thursday.
ECB president Christine Lagarde said earlier this week that there was “a strong likelihood” of a June rate cut as long as “the data reinforces the confidence level that we have”.
Markets had been hopeful the ECB would cut rates to 4.25% from its 22-year high of 4.5%.
2.02pm: FTSE 100 looking bullish in afternoon trades
The FTSE 100 has hit an intraday high of 8,281.48 in afternoon trades.
It brings the blue-chip index over 50 points higher from yesterday’s close, supported by solid gains from National Grid, British Gas owner Centrica, Whitbread, BAE and GSK.
1.55pm: NatWest capital returns estimates increased following £1.24bn buyback
NatWest’s £1.24 billion buyback of shares from the Treasury exceeded Peel Hunt analysts’ expectations.
They had initially expected just £1.1 billion in buybacks for the whole of 2023; today’s announcement has forced a rethink of the broker's full-year estimates.
“We view the larger size as a positive, perhaps especially as the parliamentary elections scheduled for 4th July could delay the retail offer,” said analysts.
They now expect £1.4 billion in buybacks for the year. Coupled with a forecasted £1.34 billion in dividends, total capital returns are expected to come to £2.74 billion.
“This estimate now appears conservative and is supported by the 1Q results, which indicate that capital generation within the group remains strong,” said Peel Hunt. “Generally, we view the progressive elimination of the UK Government's holding as positive for the rating of the shares.”
The broker gave NatWest stock a Buy recommendation with a 370p price target.
Shares were swapping for 318p at the time of writing.
1.19pm: Bitcoin unfussed by Trump verdict
The prospect of presidential nominee Donald Trump facing prison time following his conviction on 34 counts of falsifying business records should have had negative consequences for the bitcoin markets.
Trump, who has pledged to fight the guilty verdict, has been increasingly vocal in garnering votes from cryptocurrency enthusiasts.
Talking at the Libertarian National Convention last week, he promised to “stop Joe Biden's crusade to crush crypto”.
“I will ensure that the future of crypto and the future of Bitcoin will be made in the USA, not driven overseas,” said Trump.
“I will support the right to self-custody to the nation's 50 million crypto holders. I say this with your vote. I will keep Elizabeth Warren and her goons away from your Bitcoin, and I will never allow the creation of a central bank digital currency."
Democratic senator Warren has called for stricter anti-money laundering rules in the crypto sector.
Yet bitcoin seemed unfussed by these unprecedented political developments; in fact, it added 1% against the US dollar on Thursday and has remained buoyant at $68,380 today.
Perhaps, as has been theorised by pundits, Trump’s conviction will only serve to galvanise his support base, thus increasing his chances of reclaiming the White House in November.
In the meantime, the BTC/USD pair is up 1.3% week on week, with Ethereum, the second-largest cryptocurrency, adding 2.4%.
Global cryptocurrency market capitalisation currently stands at $2.55 trillion, with bitcoin dominance at 52.9%.
12.51pm: Nasdaq, S&P to open lower, Trump conviction to command national discourse
Losses are expected to continue on the US stock market this Friday after the three main indexes closed lower on Thursday.
The Dow Jones Industrial Average (DJIA) is tipped to open a touch lower at 38,082, while the Nasdaq 100 tech index is expected to open 0.3% lower at 18,481.
Meanwhile futures contracts for the broader S&P 500 index have it opening 0.15% lower at 5,226.
Undoubtedly, markets will take a backseat in the news cycle in favour of presidential nominee Donal Trump’s conviction on 34 counts of falsifying business records.
Trump unsurprisingly called the trial “rigged” and a “disgrace”, while Trump’s lawyers confirmed they will appeal “as soon as we can”.
Kremlin spokesman Dmitry Peskov chirped up following the guilty verdict, stating: “The fact that a de-facto elimination of political rivals by all possible legal and illegal means is going on there is obvious.”
12.07pm: Rolls-Royce turbines to power Japanese warships
Another quick update on Thursday’s late headlines- Rolls-Royce announced that its MT30 marine gas turbine has been selected to power Japan's new destroyer-class warships.
The MT30 is known for its high power density.
Rolls-Royce senior vice president for defence Sam Cameron said: "The unique power density of the MT30 GT will ensure ship performance is not compromised and will meet the top ship speed requirements associated with the Japan Maritime Self-Defense Force (JMSDF) destroyers."
"Rolls-Royce continues to be at the forefront of naval propulsion technology and we’re proud to be providing the world’s first twin-MT30 hybrid arrangement to power Japan’s destroyer programme," Cameron added.
FTSE 100-listed Rolls-Royce shares were up 0.3% in Friday’s early-afternoon trades.
11.47am: No bonuses for Burberry boss
Burberry chief executive Jonathan Akeroyd received zero annual bonuses last year due to a poor performance at the British luxury clothing brand.
An annual remuneration report published late on Thursday stated: “The Committee judged that progress was made on refining our brand image, evolving our product and strengthening distribution, resulting in some of the strategic objectives being partially met.
“However, in light of the business performance and broader shareholder experience, the Committee and Jonathan Akeroyd agreed that it would not be appropriate for him to receive an annual bonus for FY 2023/24.”
Chief finance officer Kate Berry received a £121,500 bonus, representing 9% of her maximum potential reward.
Burberry’s profits dove 34% in the year to 31 March amid a backdrop of plummeting luxury demand.
Despite announcing cost-saving measures, analysts remain lukewarm on Burberry’s prospects in the current financial year.
Akeroyd’s total earnings for the year, excluding potential share plan incentives, came to £1.19 million.
Burberry shares have been slashed in half over the past 12 months and dipped a further 1.4% this Friday.
The FTSE 100 is currently 33 points higher at 8,264.
11.20am: Vodafone completes Spanish asset sale to Zegona
Vodafone Group PLC (LSE:VOD) has officially completed the sale of Vodafone Spain to Zegona Communications (LSE:ZEG) plc for €4.10 billion in cash and €0.90 billion in redeemable preference shares.
The total enterprise value of €5 billion (£4.26 billion) represents a multiple of 5.6 times Adjusted EBITDAaL and 13 times operating free cash flow for the twelve months ending 30 September 2023.
As part of the transaction, Vodafone will continue to provide certain services to Vodafone Spain.
The disposal was first announced last October. It forms part of Vodafone boss Margherita Della Valle’s strategy of streamlining Vodafone’s global operations in the face of a burdensome debt pile.
Zegona, which was incorporated in 2015 by former Virgin Media executives Eamonn O’Hare and Robert Samuelson, previously said it hopes to “improve efficiency by reducing complexity and driving productivity”.
Back in 2021, Zegona returned over £300 million to shareholders after exiting its investment in Basque Country telecoms group Euskaltel to Masmovil, which bought at a €3.5 billion valuation.
Vodafone shares were flat at 74.75p in Friday morning trades.
11.08am: Flutter officially shifts listing to US
Paddy Power owner Flutter Entertainment PLC (LSE:FLTR) has officially switched its primary listing from the London Stock Exchange to the New York Stock Exchange, effective today.
It marks an “important milestone in the evolution of Flutter”, said chief executive Peter Jackson.
“This closely follows the recent move of our operational headquarters to New York, with both reflecting the increasing importance of the US sports betting and iGaming market to our business.”
Flutter owns and operates FanDuel, which is among the largest sportsbooks in the US. FanDuel’s success was a primary motivator for Flutter’s stateside shift, given its increasingly integral role in Flutter’s revenue growth.
“We have a fantastic position in the US, with FanDuel the clear number one operator, and we look forward to this next step on our journey," said Jackson.
New CFO steps up
In conjunction with today’s relisting, Flutter announced that group chief finance officer Paul Edgecliffe-Johnson will leave the Group in place of Rob Coldrake “with immediate effect”.
Coldrake has been acting as Flutter International’s CFO for four years.
Following Flutter’s transatlantic relocations, there is a “consequent need for extensive executive management time to be spent in the United States”, said Flutter.
“The board has recently engaged in a discussion with Paul Edgecliffe-Johnson concerning his ability to meet that requirement in light of his family commitments in the UK.
“Following this discussion, the board has concluded that it is in the Company's best interests for Paul Edgecliffe-Johnson to step down from his role as Group CFO and Executive Director.”
Flutter retains a secondary listing on the London Stock Exchange.
10.14am: Royal Mail's buyer could scrap jobs and postboxes
Royal Mail's buyer has said he plans to shake up the structure of the postal service, which could lead to thousands of jobs being cut and the removal of thousands of red pillar boxes.
Kretinsky, the Cezch billionaire who could become the owner of Royal Mail's parent company, said he sees Royal Mail's future in the out-of-home delivery market.
“It is important for logistics companies not to miss this out-of-home delivery wave, which means they need to be ready to invest now," he told Reuters.
Under his vision, Kretinsky said he would consider injecting up to £400 million into the company to help set up a network of dropboxes and delivery lockers, removing the need for post and packages to be sent directly to people's homes.
“We believe that if the group [IDS and Royal Mail] doesn’t respond properly on the out-of-the-home solutions it may have a detrimental impact on its market share. And specifically in the UK, any shrinkage of the market share would be fatal," the 'Cezch Sphinx' added.
“It is a moment when the European postal market is once again evolving. It will be probably the next two to three years to come, which will decide what company will play what role in the out-of-home delivery solutions.”
9.57am: More proxy advisors come out aginst Musk's pay
A second of the world's leading proxy advisors has come out against Elon Musk's US$56 billion bonus, imploring shareholders to reject the pay package.
Institutional Shareholder Services (ISS) said investors should reject Musk's record pay, claiming it is "excessive" and "outsized".
The largest-ever US pay deal was agreed upon back in 2018 but was subsequently dropped after a judge found that Tesla directors had failed to properly inform shareholders over the details.
ISS said: "Although the achievement of the grant’s performance hurdles and the substantial growth in the company’s size and profitability are fully recognized, the award value was considered outsized from the start and it has failed to accomplish certain of the board’s stated objectives from 2018."
Stakeholders will now vote on whether to approve the bonus on June 13.
Earlier this week, proxy advisory giant Glass Lewis said it too told shareholders to reject the pay deal.
9.41am: Revolution Bars takes itself off market
Revolution Bars Group PLC, the struggling hospitality group, surged 13% higher after it said it will no longer look for a buyer after its deal with Nightcap fell through and instead will undergo restructuring.
Today will see the end of the bar group’s formal sales process and the beginning of a reorganisation plan that the company says is “in the best interests of all stakeholders.”
Part of the plan, which aims to return the company to profitability, includes “exiting the leases of certain loss-making sites, and proposing a rent reduction on certain other sites to enable them to return to profitability at a sustainable level.”
A sales process was launched earlier this year as the company searched for emergency funding to keep part of its operations alive.
9.03am: The morning so far
JD Sports was among the worst-performing FTSE 100 stocks this morning.
The high-street retailer hit full-year sales targets but undershot on profits; the latter proved a sticking point for the market, with the stock getting slammed 11% lower in opening trades.
Paddy Power owner Flutter, which is in the process of moving its primary listing stateside, fell over 9%, extending a slump following a recent betting tax bill passed in Illinois.
Primark owner Associated British Foods PLC (LSE:ABF) shares are not responding well to news that controlling shareholder Wittington Investments has cut its stake in the company. Shares were off 3.1%.
Ocado Group PLC (LSE:OCDO), St James’s Place plc and Burberry Group PLC (LSE:BRBY) were also among the biggest fallers.
National Grid PLC (LSE:NG.) has switched to recovery mode following a recent slump due to a discounted fundraise. The electricity and gas supplier added 1.8% in opening trades.
British Gas owner Centrica PLC (LSE:CNA) was also on the move, validating Barclays’ recent assertion that the stock is oversold. Shares added 3.3% this morning.
Better-than-expected house price data failed to move the needle for housebuilding stocks.
Monthly house prices in the UK grew by 0.4% in May 2024, marking a reversal from a 0.4% decline in April and exceeding the market consensus of a 0.1% gain.
Yet housebuilding blue chips Persimmon and Taylor Wimpy were slightly down.
Elsewhere in company news, Nationwide is facing a competition probe into its Virgin Money takeover, while the government has sold down its stake in NatWest by another £1.24 billion.
8.44am: Nationwide to face competition probe over Virgin Money takeover
The Competition & Markets Authority (CMA) has launched an investigation into Nationwide Building Society’s £2.9 billion takeover of Virgin Money.
Nationwide’s surprise bid for the bank has already proved controversial, with some Nationwide members staging a revolt over the deal, while analysts consider the 220p-per-share offer opportunistic.
Now, the CMA is considering whether the merger “will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”
The regulator is calling for comments from the public, with a window open until 24 June.
8.29am: FTSE 100 inches higher
The blue-chip index added nine points to 8,240 in opening exchanges, following on from yesterday’s 48-point gain.
Top morning risers include Centrica PLC (LSE:CNA), National Grid PLC (LSE:NG.) and GSK PLC (LSE:GSK, NYSE:GSK), while the biggest fallers include betting companies Flutter and Entain, JD Sports and Primark owner ABF.
8.04am: Government reduces NatWest stake by another £1.24 billion
The Treasury has sold £1.24 billion worth of shares back to NatWest Group PLC (LSE:NWG), bringing the government’s stake down from 27% to 22.5%.
It comes after the government announced an expected delay in the eagerly awaited retail offer due to Prime Minister Rishi Sunak announcing an election set for 4 July.
The Treasury has been steadily selling down the government’s stake in the bank that it acquired as part of a bail-out package following the Global Financial Crisis.
7.47am: House prices outperform
Monthly house prices in the UK grew by 0.4% in May 2024, marking a reversal from a 0.4% decline in April and exceeding the market consensus of a 0.1% gain.
According to Nationwide data, house prices rose by 1.3% on a year-on-year basis, accelerating from a 0.6% increase in the prior period, which was the softest pace in three months.
This is the fourth consecutive month of rising home prices, driven by strong wage growth and lower inflation.
“Modest increases in mortgage rates since the Spring have slowed the housing market but not derailed it,” said Rob Wood, chief UK economist at Pantheon Macroeconomics.
7.36am: JD Sports hits sales expectations, adjusted profit slightly undershoots
JD Sports brought in £10.54 billion worth of sales in the 2024 financial year, matching broker expectations leading up to the results.
Profit before tax and adjusting items fell 8% to £917.2 million, which was slightly below the guided range of £915-935 million previously laid out by the company.
On a statutory basis, profit before tax surged 67% to £811.2 million, helped by a reduction in adjusting items of £398.7 million.
One particular highlight was JD Sports’ premium range, which saw 11% growth in organic sales.
Chief executive Régis Schultz painted the results as proof that JD Sports is making “strategic progress” in a challenging market, namely increased operating costs and a highly promotional market environment.
The company also experienced a net reduction of 73 stores, largely due to the divestment of non-core businesses and a strategic withdrawal from South Korea.
“We have started the new financial year with Q1 in line with our expectations in a volatile market and we are on track to deliver our profit guidance for the full year,” said Schultz
“Looking further ahead, we have a strong business model and a clear strategy to deliver long-term growth and value creation for our shareholders."
7.11am: Stocks to creep higher
Stocks should edge higher when trading commences this Friday, as the blue-chip index attempts to recover losses in what has been a ropey week for the market.
Shares recovered some lost ground yesterday when the FTSE 100 closed 48 points higher, but the index still remains around 90 points lower from last Friday’s closing price.
Housebuilding stocks could provide support, given Nationwide housing prices increased 0.4% sequentially this month, beating the expected 0.1% list.
For now, FTSE 100 futures contracts predict 12 points of gains to 8,246 when markets open.