- FTSE 100 advances 25 points to 8257
- British Gas owner Centrica says performance in-line
- Discount retailer B&M profits hit top end, but no guidance provided
4.02pm: FTSE 100 to close higher
London's blue chips are set to close out Wednesday higher, rebounding from two consecutive days of losses.
Top risers included Smith & Nephew, up 3% on the back of a UBS broker upgrade, while St James's Place, Rightmove and Rentokil also made some healthy gains.
Falling the other way was B&M, which dropped 6.5% after it spooked investors and markets with a lack of guidance in its full-year results and little clarity on its 'volume-led growth'.
Other fallers incldued JD Sports and British Gas owner Centrica.
3.46pm: Lloyds, Santander and others offer cash to switch accounts
Lloyds, Santander, Nationwide and two other banks have all launched a promotion offering Brits as much as £200 to switch their current accounts.
People looking to make the switch must do it through the Current Account Switch Service to be able to receive the bonus payment.
Lloyds said it would pay £175 for those who switch to its Club Lloyds, Club Silver or Club Platinum accounts as long as they have transferred over three direct debits.
Santander will also pay the same amount for those who transfer over to a Santander Edge account, while Nationwide is paying £200 to those who switch over a rival current account to a new or existing FlexDirect account -albeit if they have at least two direct debits set up.
TSB is also offering switchers a £100 bonus and £60 cashback, while First Direct said it would pay people £175 to move across.
All five of the offers feature additional stipulations switchers must meet before they can receive the cash bonus.
15.26pm: Nvidia at record high as Canada cuts rates
US stocks are having a mixed morning session today, with the S&P 500 rising by around 0.22%, or 11 points, after AI tech giant Nvidia soared to fresh all-time highs.
Nvidia opened 2.5% higher, having closed at a record high on Tuesday, with much of its gains driven by its blockbuster earnings report and 10-for-1 stock split announcement last week.
Meanwhile, the Nasdaq rose around 0.74%, or 122 points, and the Dow Jones slipped 0.3%, or 139 points.
Other stocks making moves included Hewlett Packard Enterprises, up 13%, and CrowdStrike, up 6%, after both posted stronger-than-expected results.
Across the northern border, Canada's central bank has become the first of the G7 nations to cut its interest rates.
Borrowing rates were lowered from 5% to 4.75% as expected.
The European Central Bank will meet tomorrow to decide rates in the EU, with markets predicting it too will vote to cut.
3.01pm: McDonald's loses chicken Big Mac trademark
McDonald's will no longer be the only restaurant able to label its chicken burgers 'Big Mac' following a ruling by an EU court.
A trademark for the burger's name was registered by the fast food chain back in the EU in the mid-90s, but a legal challenge from an Irish rival has changed the parameters.
From now on, companies will be allowed to use 'Mac' in the advertising of poultry products or in the name of chains.
It comes after the European Court of Justice said McDonald's failed to show it had made genuine use of the trademark continuously over the last five years.
"McDonald's loses the EU trade mark 'Big Mac' in respect of poultry products," the judges ruled.
'Big Mac' will continue to remain a trademark for the American company.
2.26pm: Tax claim, or 'blatant lie'?
The UK stats watchdog is looking into a claim reiterated by Rishi Sunak on the TV debate last night, where he said Labour would put up taxes by £2,100 if they won, citing Treasury civil servants as the source.
Not true, said Labour, citing a letter from James Bowler, the Treasury’s top man, that the numbers were not produced by the Civil Service but were a Conservative party document.
Bowler wrote to shadow Treasury chief secretary Darren Jones to say that the figures used by Sunak "include costs beyond those provided by the civil service and published online by HM Treasury".
Sunak said Labour has a £38 billion black hole to fill, but this is "patently untrue" said Pat McFadden, the opposition’s campaign co-ordinator, adding it was even prepared to hold a TV debate (another one) to refute the claims
Why Sunak’s £2000 claim misleadingly uses @instituteforgov data - as set out in this @FT report … https://t.co/K3ABP6jZcE pic.twitter.com/tnEKrMQNCT
— Sam Macrory (@sammacrory) June 5, 2024
Parties routinely weaponise and distort each others policies. It's all in the game. This is different. The Prime Minister claimed the civil service had independently costed Labour's tax plans at £2,000. That was false. It's the most blatant lie I've seen in an election campaign.
— (((Dan Hodges))) (@DPJHodges) June 5, 2024
2.10pm: Shares step higher ahead of US open
Stocks are adding to earlier gains in most markets ahead of the opening bell in Wall Street.
The Footsie is up 40 points now or 0.5%, though its mid-cap sibling is inching lower, down 0.3%.
Acorss the Channel gains are larger, led by Italy's FTSE MIB, up 1.3%, while the IBEX in Spain has advanced 1.1%, with the Germany's DAX and France's CAC both having gained 0.8%
The Euro Stoxx 600 is added 0.74% so far.
US stock futures have also picked up, with Nasdaq 100 futures pointing to a 0.7% rise, with the S&P 500 and Dow futures up 0.4% and 0.3%.
US job numbers from ADP came out earlier, showing employment rose by 152K in May, slightly below the consensus forecast of 175K.
Economists said that is consistent with forecasts that the official private payrolls measure rose by around 150K in May. Friday's NFP is the real number to watch.
1.41pm: Which taxes could rise after the election?
Labour has already said that it will raise an additional £7 billion by the end of the decade by increasing tax on private school fees, private equity carried interest and clamping down on tax avoidance, but economists say the party has other options too.
Economist Ashley Webb at Capital Economics says whichever party wins, if they want to raise tax revenue more to increase spending there are five avenues to explore, including raising other taxes such as increase inheritance, stamp duty, and council taxes; tweak existing tax-relief policies; expand the tax base, create new tax bases, or last and least likely at this stage, would be to break pre-election pledges.
"Overall, the big picture is that circumstances change and both the Conservatives and Labour are not being completely honest about the fiscal choices that the next government will face. If they want public spending to be higher, without raising borrowing, then taxes will have to be higher too," says Webb.
12.45pm: US futures pointing higher, FTSE also rising
In London the FTSE 100 is mounting a reasonable effort at climbing, up 30 points or 0.36%, while the FTSE 250 is down 35 or 0.17%.
Across the pond, futures are indicating the tech-powered Nasdaq will lead gains as US stocks mostly open higher shortly, continuing the positive momentum from the second half of yesterday's session.
Nasdaq futures are up 0.42%, with Dow futures roughly flat, and S&P 500 futures in the middle, up 0.2% and within 50 points of its all-time high.
Easing inflation fears have been replaced by supposed worries about a US recession after some softer US data this week.
"The emerging story is one of reconvergence taking over from divergence," says market analyst Neil Wilson at Finalto, the US-German 10yr spread down to 180bps from 220bps in mid-April.
Meanwhile the Bank of Canada is seen cutting today, with the meeting at 10.30am Ottowa and NY time, and the European Central Bank expected to do the same tomorrow.
Macro data today includes US ISM services and ADP payrolls.
"Treasury yields declined to a three-week low as job openings fell sharply – the case for a rate cut is building, although it seems likely that it is a bit too late for the FOMC to pull the trigger in June," says Wilson.
David Morrison at Trade Nation notes that the S&P 500 is within 1% of its record intra-day high from a fortnight ago.
"Could the last couple of weeks of pull-back and consolidation have provided the reset required ahead of a rally to take stock indices to fresh record highs? Maybe. But stock market volatility, as measured by the VIX, has also picked up a touch over the last fortnight."
One interpretation, he says, volatility is "returning to more normal levels after falling to lows last seen in 2018. Another is that May’s decline was a final downside blow-off ahead of a more protracted rally as the US stock market becomes a riskier place to invest".
12.22pm: King's head in demand
Pound notes featuring King Charles's likeness have entered circulation today from the Bank of England, leading to queues of keen royalists outside the Threadneedle Street headquarters in London.
Numbers will gradually increase as older ones featuring the late Queen Elizabeth are replaced if damaged or if demand increases, with existing notes remaining legal tender.
"This is a historic moment, as it’s the first time we’ve changed the sovereign on our notes," said BoE governor Andrew Bailey.
12.05pm: Small cap risers
A couple of some small cap movers in London worth flagging this morning.
Empire Metals Ltd (AIM:EEE) has published another bullish update from its Pitfield project in Western Australia, sending its shares up 17%.
After drilling already found huge titanium shows, Empire has now revealed a discovery of weathered material at the surface which it says is high-grade ore easily accessible and relatively straightforward to process.
Pantheon Resources PLC (AIM:PANR, OTCQX:PTHRF) is up even more, jumping 28% after signing a gas sales precedent agreement with a subsidiary of the Alaska Gasline Development Corporation.
The agreement to supply up to 500 million cubic feet per day of natural gas at a base price of $1 per million is an "opportunity to create a win-win for the state of Alaska and for Pantheon as we turn the fantastic exploration and appraisal success of the past five years into the development of two giant oil and gas fields", says Pantheon executive chair David Hobbs.
Elsewhere, Insig AI, a company using AI to "visualise, explain and discover patterns in financial market data", after raising £0.813 million to invest in sales and marketing. The shares are up 16% to 14.8p after the fundraising was completed at a price of 12.5p.
Most of the subscription is from a new investor, NR Holdings Limited, which appears to be the private vehicle of Neil Richards, partner at Triple Point Investment Management, while Insig chair John Wilson also subscribed for £62,500 of shares.
CEO Richard Bernstein said: "We're delighted to welcome a new investor of this calibre at a time when the company is laser focused on converting its strong machine learning repository and data science capabilities into client wins and growing and sustainable revenues."
Angle PLC, the liquid biopsy specialist, shares are down 11% after it unveiled plans to raise up to £10.56 million to fund the next generation of products and support the commercial roll-out of its technology.
A total of £8.5 million will come through a placing and direct subscription of newly minted shares which will be sold for 15p each, with a further £2.06 million spought via an open offer. The shares closed at 18p yesterday but were below the 15p offer price for most of March and April.
Angle said it has "a strong current pipeline of opportunities that has more than doubled year to date, with significant potential growth opportunities across a variety of end customers, including large pharma."
11.50am: Don't expect a BoE rate cut this month
Don't expect a rate cut from the BoE this month, reckons Marc Cogliatti, head of capital markets at Validus Risk Management.
After the services PMI report, he said it "aligns with our long-standing belief that the BoE will not reduce rates anywhere near as aggressively as the market had anticipated at the beginning of the year.
"This is partly because there is no urgent need to stimulate growth and partly due to the potential risk of inflation rising again later this year."
Currently, markets anticipate approximately 37 basis points of rate cuts by the end of the year, which Cogliatti says suggests "a 25 basis point cut in November with another cut expected in March 2025".
In the foreign exchange market, the pound is little moved against both the dollar and the euro, which he says also reinforces his "optimistic outlook for sterling as we enter the latter half of the year".
11.35am: Bitcoin testing record highs again
Bitcoin is testing all-time highs again, with yesterday's 2.5% over the pat 24 hours versus US dollar to stand close to $71K.
The king crypto hit an all time high of $72,800 in April, which is less than 3% from current spot prices – our daily crypto report has more.
11.19am: Mid-caps in the red
The FTSE 100 continues to dawdle just above the flatline, while the FTSE 250 has fallen into the red, down 20 points.
Biggest fallers are Ninety One PLC (LSE:N91), down 6% after publishing annual results showing lower adjusted PBT, though it was 3% above consensus expectations, principally due to stronger revenues.
The company provided analysis showing that fund flows were more negative than expected, down £9.4 billion, which analysts at Peel Hunt said implies an acceleration in the second half to offset better-than-expected market movements and FX.
It is followed by an oil & gas sector trio, E&P groups Energean PLC (LSE:ENOG) and Harbour Energy PLC, along with services provider Hunting PLC, down either side of 2%.
10.53am: PMIs positive news on inflation
Economists say the PMI survey suggests UK growth will slow in the second quarter compared to the first, but offers good news on inflation.
Rob Wood at Pantheon Macroeconomics says the "big news" in the PMI survey was further signs of easing inflation pressure, which he said provided encouragement for the Bank of Engand's monetary policy committee, as the services input and output price indices both dropped.
"The PMI suggests April’s blowout services inflation print was a flash in the pan and should not be taken as a sign of strong annualised inflation continuing. Slowing services inflation can keep the MPC on track to cut rates in August, as we expect," Wood says.
Peter Arnold, EY UK chief economist, says the PMI indicates quarter-on-quarter GDP growth will slow from the 0.6% increase in Q1.
“On the inflation front, May's services survey reported that input costs rose at their slowest pace for three years, after the large national living wage increase had caused a significant rise in labour costs in April.
"Together with evidence of a further slowdown in prices charged inflation, this is consistent with the idea that services inflation will continue to cool through the summer," says Arnold.
10.20am: New US alternative stock exchange in Texas?
A story broke last night about a new splinter national stock exchange in Texas, looking to offer an alternative with lower regulation and fees that the New York Stock Exchange and Nasdaq.
The new Texas Stock Exchange group, which is being backed by Wall Street heavyweights BlackRock and Citadel Securities, has raised approximately $120 million.
The Texas Stock Exchange CEO James Lee told The Wall Street Journal that the group plans to file registration documents with the US regulator, the Securities and Exchange Commission, later this year, to start trading in 2025 and welcome a first listing in 2026.
10.02am: Net fund inflows for first time in 11 months
New fund flow data from Morningstar points to a turning point, with UK-domiciled funds gathering £861 million in April, the first positive outcome in 11 months.
Flows into fixed-income strategies were the key driver, while passive strategies recorded net inflows at the expense of actively managed strategies, which saw further redemptions.
Investors put money into global large-cap equity funds and those focused on Japan, while the flow out of UK equity funds was continued.
Breaking the trend of previous months, Morningstar said sustainably labeled strategies saw lower inflows compared with their mainstream counterparts.
In terms of individual funds, Fidelity Index World saw continued growth in assets with year-to-date net inflows surpassing £1 billion, while the biggest outflows were from Federated Hermes Short-Term Sterling Prime and Jupiter UK Special Situations.
9.48am: Private car sales 'remain weak'
The SMMT data "remains weak, suggesting consumer caution", says economist Rob Wood at Pantheon Macroeconomics.
With private sales dropping 12.9% year-over-year, the twelve-month average of monthly private registrations is the weakest since October 2021.
"Seasonally adjusted private sales have fallen 2.6% so far in 2024. Some of that weakness, however, could reflect the strength in Business and Fleet registrations, which continue to rise."
He says car registrations are "performing worse than even the weak major purchases balance of GfK's survey would suggest".
The push-back to expectations of a first Bank of England interest rate cut will depress car sales, Wood said, but he still expects sales to recover later this year "as household real incomes continue to grow strongly and the underperformance of registrations over the past three years suggests leads to strengthening replacement demand".
9.36am: UK services sector has good news on inflation
The UK services PMI for May is in, coming in at 52.9 as expected, down from the high of 55.0 in April.
Following the manufacturing survey released earlier in the week, the PMIs imply GDP growth of around 0.3% so far in the second quarter.
Hiring activity rises but labour market tightness is a constraint, says S&P Global, which carries out the survey, with better news on inflation, with the slowest increase in prices charged for over three years.
Joe Hayes, principal economist at S&P Global, said the survey showed "another reasonable rate of expansion in the UK service sector".
"Of particular interest to the immediate outlook for the UK economy will be the prices measures, with the Bank of England potentially moving to cut interest rates as soon as this month.
"The PMI surveys show prices for UK services rising at the slowest pace for over three years. That's now three months on the trot that selling price inflation in the service sector has eased – this will be very encouraging to the Monetary Policy Committee and suggests the trajectory of services prices is moving in the right direction.
"It is worth noting however that the PMI's gauge of UK services inflation is still sitting well above its pre-pandemic trend, which may give more weight to those suggesting the Bank of England hold out until August to loosen policy."
9.24am: UK new car market enjoys May, private sales down
The UK new car market enjoyed its best May in three years, the Society of Motor Manufacturers and Traders (SMMT) reports, with the number of new registrations grew for a 22nd consecutive month.
Private sales however dropped 12.9% year-over-year, with rises in fleet and other business purchases offsetting this.
As a resul, there were 147,678 cars sold last month, up 1.7%, though this is still 19.6% below 2019 levels.
The battery electric vehicle (BEV) market share rose to 17.6% in the month and 16.1% in the year to date.
Retail update of BEV declined less than the overall private market as manufacturers subsidise ongoing transition, the trade body says.
SMMT chief executive Mike Hawes says: "As Britain prepares for next month’s general election, the new car market continues to hold steady as large fleets sustain growth, offsetting weakened private retail demand."
9.09am: Euro-area PMI data
Some European data has been flying in this morning, with the most recent being the eurozone services purchasing managers' index (PMI) survey for May, which printed at 53.2, down slightly from 53.3 in April.
The eurozone composite PMI for May was 52.2, up from April's 51.7 to a 12-month high.
S&P Global said business confidence was at a 27-month high as inflation rates cooled.
Germany's services PMI for May was 54.2, an increase from the previous 53.9.
France's services PMI for May was 49.3, down from 51.3 in the previous month.
UK PMIs are due at half past. The pound is up 0.1% versus the euro at £0.8510, while versus the dollar there's not much movement.
8.59am: Asia update: India election, Chinese growth question
On India, the main stock market indices are all up more than 2% this morning, with the final election count indicating that Narendra Modi's BJP party looks set for 240 seats, losing their majority.
Here's Deutsche Bank's Jim Reid: "While Modi can still form the government if his alliance sticks together, it provides a much more uncertain environment than was anticipated as we woke up on Monday.
"As a result Indian equities had their worst performance in 4 years with the Nifty 50 falling -5.93% yesterday after bouncing +3.25% to an all-time high on Monday. This morning it is slightly higher as I type early in the session. Last night our economist published an initial reaction to the surprise result, one that he doesn't see derailing India's impressive growth prospects."
Shilan Shah at Capital Economics says: "Narendra Modi will begin his third term as India’s Prime Minister with a weakened mandate and that will make the passage of contentious economic reforms more difficult.
"But he will still be able to work as the head of a stable coalition, and the broader embrace across the political spectrum of the value of economic reform means the new government could still do enough to keep potential growth at 6-7%. That would leave the economy on course to more than double in size over the next decade."
Looking to Asia, early morning data showed that China's Caixin services PMI accelerated at the fastest pace in 10 months, jumping from 52.5 in April to 54.0 in May on improving local and overseas demand.
However, Reid notes that the private survey data contrasted with official PMI data released last week, which showed that services sector activity grew at a slower pace in May than April.
8.50am: WH Smith impresses
WH Smith PLC (LSE:SMWH) shares are also on the up, climbing 3% on the back of results, with the retailer's Travel arm, which relates to sites located in airports and train stations, generating 8% growth in sales in the 13 weeks to June 1.
Performance continues to be strong in UK & RoW travel, but North America was flat on a like-for-like basis.
“Looking ahead, the group is well positioned as we enter our peak summer trading period. Good trading momentum continues across all three Travel divisions,” the FTSE 250-lisetd company said...read more.
8.31am: Paragon of FTSE
The FTSE 100 has not been able to hold onto all its initial gains, which are now 0.2%, making it the least impressive of the main European stock markets indices this morning.
Spain's IBEX is in the lead, up over 0.8% thanks to a 4.5% gain for Zara owner Inditex on the back of results earlier. Germany's DAX and the FTSE MIB in Italy are both up around 0.5%.
London's mid-cap index, the FTSE 250 index, has climbed 70 points or 0.35% to 20,788.
Top of the FTSE 350 risers is Paragon Banking Group PLC (LSE:PAG), up almost 7% to its highest since 2007, after the specialist lender's half-year profits beat forecasts, hiked its interim dividend and announced a further share buyback
Operating profits for the half-year to 31 March increased by 14% to £146m, ahead of consensus expectations of roughly £140 million.
The interim dividend was increased 20% to 13.2p and the company announced a further share buyback of £50 million, taking the total for the year to £100 million.
8.13am: B&M falls on 'curious' results
Another Footsie faller is discount retailer B&M European Value Retail SA (LSE:BME), despite reporting profits hitting the top end of guidance.
Full-year underlying earnings reached £629 million, compared to guidance of between £620 million and £630 million, marking a 9.7% jump year-on-year.
It comes as 78 gross new stores were opened during the 53 weeks to March 30, with fresh sites being launched in the UK and France.
However, analyst Clive Black at Shore Capital said it was a "curious statement" which contained no guidance for the new financial year.
While adjusted profits were up, adjusted earnings per share was broadly flat, up 0.9% and while the group mentions volume-led growth its like-for-like volume "appears elusive", says Black, with "no indication of PBT/EPS expectations or current trade".
Suggesting that investors keep an eye on house broker forecasts, he concludes: "B&M has been a high-quality bargain store play but maybe it is reaching a point where it should evolve into something more cash compounding, but it is not, which is a bit of a worry."
8.06am: FTSE 100 starts on front foot
The FTSE 100 has opened in the green, climbing 29 points or 0.35% to 8261 in initial trades.
Top risers are Smith & Nephew and Ocado. Primark owner AB Foods is up there too, possibly due to read-across from Inditex.
Centrica shares are down 2.5% after the British Gas owner's trading update earlier, where it said its performance was on track to meet forecasts.
7.49am: Confusing time for markets
The last week has proved to be a "real challenge for markets to work out whether weaker US data is good or bad news for equities", says Jim Reid at Deutsche Bank.
"This marks a bit of a change as in recent months both good and bad data were used as a justification for a rally. It does seem we've moved to a more nuanced debate."
As mentioned earlier, Reid notes that markets have raised their expectations for Fed rate cuts this year, with the number of cuts expected by the year-end rose for the fifth consecutive day, supported by another fall in oil prices bringing further relief to inflation fears.
Meanwhile the major European data point of the day was German unemployment, which jumped 25k, helping contribute to investors dialling up the expected number of ECB cuts through to year-end by a few basis points.
7.40am: Centrica profits also in line
British Gas owner Centrica PLC says it expects to meet full-year profit forecasts, with the performance so far this year in line with expectations despite a "more normalised" market backdrop, in other words gas prices have retreated from the highs following the Ukraine invasion.
The average analyst estimate currently stands at 18.3p.
Ahead of its annual general meeting today, the FTSE 100 group said profits are likely to be strongly weighted towards the first half of the year, as usual.
This is helped by energy price hedging, which is expected to underpin a "resilient" first half for the infrastructure businesses, as gas prices fall, with second half results expected to reflect lower commodity prices.
7.26am: Results in line from Zara owner Inditex
Zara owner Inditex grew revenues 7% in the first quarter, in line with analysts’ expectations, with profits in line too.
The Spanish-owned group, the world’s largest listed fashion retailer with brands that also include Massimi Dutti and Pull&Bear, posted operating income of €1.6 billion for the three months to April 30, on revenue that rose 7.1% to €8.2 billion.
7.16am: FTSE 100 tipped to start higher
The FTSE 100 and other European stock markets have been tipped to come out firing on Wednesday.
London's blue-chip index has been called 56 points higher on spread-betting platforms, having closed almost 31 points lower at 8232 the day before.
Wall Street finished up overnight, after overcoming early wobbles, with the Dow Jones ending up 0.36%, while the S&P 500 and Nasdaq Composite both closed just under 0.2% higher.
Asian markets are mixed this morning, but India's main indices are back up, with the Sensex and Nifty both rising over 2% so far.
Yesterday's US JOLTS jobs openings was softer-than-expected, and this boosted appetite in US treasuries and increased the probability of seeing the first Federal Reserve cut in September, says market analyst Ipek Ozkardeskaya at Swissquote Bank.
"The US 2-year bond yield – which tracks the Fed expectations – eased and the probability of a September cut rose to around 65%, while the US dollar index consolidated and equities eked out small gains."
Today, we get services sector PMI data, plus the US ADP jobs report, and an interest rates decision from the Bank of Canada. A cut is expected, as with the ECB tomorrow.
Oil prices have consolidated near four-month lows, with Brent crude roughly flat at $77.54 per barrel this morning.