- FTSE 100 slips 36 points to 8,209
- Pennon boss gets pay boost as chair departs
- French banks tumble after snap election call
4.40pm:
London's bolue-chip index ended down almost 17 points or 0.2% lower at 8,228.48.
4.04pm: FTSE 100 to close lower amid geopolitical nervousness
London stocks are on track to close lower on Monday, having dropped by as much as 58 points at the open following the announcement France called a snap election, creating wider political uncertainty across Europe.
However, the FTSE 100 showed resilience throughout the day, boosted by labour market data which could influence dovish sentiment at the Bank of England meeting later this month.
In company news, Ashtead Group PLC (LSE:AHT) said it was undergoing a review to analyse whether switching its listing from the UK to the US is in the best interests of the company.
Pennon Group PLC (LSE:PNN, OTC:PEGRY), the water utility firm which owns South West Water, revealed its boss recieved a 60% pay increase for the last year, weeks after its subsidiary caused thousands in Devonshire to suffer from diarrhoea and vomiting.
In Europe, the euro suffered a difficult day, with the uncertainty created by the EU parliamentary elections pushing it 0.33% lower against the pound to 84.38p, while the currency dropped 0.4% to US$1.07 against the dollar.
Europe's broader stock index, the STOXX Europe 600, dropped around 0.5%.
3.41pm: Aston Martin offers workers inflation-busting pay hike
Aston Martin has offered its factory workers an inflation-busting wage increase amid plans to increase production of its new models.
As part of a two-year agreement, which was negotiated by Unite union, staff will see their pay rise by 4% in both 2024 and 2025, jumping ahead of the annual inflation rate of around 2.3%.
Manufacturing technicians have agreed to a slightly different deal, with workers receiving a 4% rise this year before a 1.5% jump in 2025, exchanging additional pay for a one-hour-a-week reduction in working hours.
Aston Martin shares tumbled more than 4% following the announcement.
3.23pm: Bitcoin slips lower after strong week
Bitcoin has started the week on a more subdued note after coming close to its all-time high at the end of last week.
The king cryptocurrency looked like it might challenge its $73,000 all-time high on Friday morning, topping $71K and coming close to $72K in the run-up to the release of US non-farm payrolls report, when buying appetite wore out.
Neil Roarty, analyst at investment platform Stocklytics, said the rise was driven by its strongest ETF performance since investment products were launched in January.
But he said the "mood quickly soured" with a drop below $70K by the time the weekend had started, which he linked to strong US jobs data at the end of the week, which is expected to keep the Federal Reserve from cutting interest rates in the short-term.
Bitcoin/USD dropped 0.41% on Monday to US$69,352.
2.34pm: Wall Street opens lower
Wall Street has opened slightly lower on Monday after last week's strong performance, with the markets bracing for the Fed's interest rate decision and May inflation figures.
The Dow Jones opened 0.2% lower at 38,718, while the Nasdaq started the day down 0.24% at 17,086. The S&P 500 began trading at 5,335 down by around 0.22%
Stocks making movements today included KKR, up 7%, CrowdStrike, up 5.5%, and GoDaddy up 2% after all three companies were promoted to the S&P 500, joining the leading index on June 24.
They will replace Robert Half, Comerica and Illumina.
Dell and Palantir both slumped 1% and 2.5% respectively as the two left investors disappointed that they weren't added to the index.
2.16pm: Barclays branches vandalised by protestors
Barclays branches across Britain have been covered in red paint and had windows smashed by pro-Palestine activists.
Some 20 buildings in England and Scotland were targeted by protestors, Palestine Action revealed.
It claimed the driving force for the vandalism was to "demand the bank divests from Israel's weapons trade and fossil fuels".
In a statement, Barclays said: "While we support the right to protest, we ask that campaigners do so in a way which respects our customers, colleagues and property.”
In Bristol, a Barclays bank had its windows smashed and red graffiti sprayed over it, while in Edinburgh a branch had rocks inscribed with the names of Palestinians killed in conflict thrown through windows.
1.58pm: Billions languishing in UK current accounts, new survey reveals
Banks and other financial groups are raking in billions due to people holding large amounts in current accounts paying paltry interest, new research suggests.
Over £366 billion is languishing in UK current and savings accounts earnings sub 1% a year, according to a new study by the Yorkshire Building Society and data consultancy CACI.
Around 17% of respondents in the survey said they had never checked the interest rate on their savings, while a third said all of thier money was in their current account.
CACI estimated there are nearly 13 million current accounts held in the UK that have balances above £5,001 with the average balance held at £23,700.
1.33pm: Wall Street to open lower
In the US, stocks are set to open lower as the markets react to the growing uncertainty in Europe and digest last week's jobs data, which may lead to some hawkish comments from the Fed at its interest rate meeting later this week.
Futures for the Dow Jones are implying it will open at 38,827, down 41 points, while the S&P 500 is expected to open 5 points lower at 5,353.
The Nasdaq is predicted to begin the week 14 points down at 19,030.
While economists react to the effects of a weaker euro and high interest rates for longer in the US, tech investors will be turning their focus to Apple and its AI strategy, which is set to be unveiled later today.
There’s a sense that the company missed the boat when OpenAI’s groundbreaking ChatGPT large-language model heralded a brave new world of AI-led innovation.
After all, Apple’s age-old rival, Microsoft, provided the financial resources to make ChatGPT a reality. Now Microsoft is on the brink of releasing a new breed of AI-powered personal computers.
Wedbush analysts said: "“In our view, [the event] represents the most important event for Apple in over a decade as the pressure to bring a generative AI stack of technology for developers and consumers is front and center with Cook & Co. set to make history for Cupertino next Monday.”
1.14pm: Euro to fall further, says analyst
Tourists planning on a trip to Europe this summer could get more for their money's worth as analysts forecast further declines in the euro.
The currency has already slipped by more than 0.5% in the last five days, dropping to 84.56p following the European Central Bank's decision to cut interest rates and French President Macron's choice to call a snap election.
However, tourists will have to be quick as the pound could slip next too next week.
Chris Turner, head of markets at ING, said: "Expect to hear much made of the diverging political scenes, where the forthcoming UK general election is expected to present the UK with a very large Labour majority, whereas the French election promises to deliver a parliament diametrically opposed to the presidency.
"We probably cannot rule out EUR/GBP edging a little lower this week - perhaps to 0.8400.
"But we think this sterling rally does not last and probably reverses next week when we hear from the Bank of England next Thursday - likely preparing the market for an August rate cut."
12.59pm: Norwegian sovereign fund votes against Musk's Tesla bonus
Elon Musk's US$56 billion pay package is at risk of being rejected at Tesla's AGM on Thursday, with Norway's sovereign wealth fund revealing it plans to vote against the resolution.
Originally awarded in 2018, but made void in January this year after a US judge found that Tesla’s directors had failed properly to disclose the full details of the package, the new vote is to re-approve the package given the release of more details.
Top proxy advisors ISS and Glass Lewis have both recommended their institutional clients vote against ratifying the package.
Norges Bank, the $1.7 trillion state-owned Norwegian fund, has joined that group. It owns a 0.98% stake in Tesla, worth 78.4 billion Norwegian krone ($7.3 billion).
"While we appreciate the significant value generated under Mr Musk's leadership since the grant date in 2018, we remain concerned about the total size of the award, the structure given performance triggers, dilution, and lack of mitigation of key person risk," a statement from the fund stated.
12.38pm: French banks tumble as political instability ensues
Shares in French banks have tumbled after President Macron called a snap election following a strong performance from to far-right parties in the European Union Parliamentary votes.
BNP Paribas tumbled by more than 4.5%, while Societe Generale fell by around 7.5% in reaction to Macron's announcement.
Government bond prices also fell, leading to 10-year yields soaring close to their highest for the year at close to 3.19%.
The euro is down by around 0.15% compared to the pound at 84p, while the currency has fallen 0.3% against the dollar to US$1.07 - its lowest level in a month.
David Morrison, the analyst at Trade Nation, said: "Not only does the single currency have to deal with last week’s rate cut from the ECB, which makes it less attractive to hold, but now also with the political uncertainty triggered by President Macron’s arguably rash and unnecessary gamble to face down Marine Le Pen’s populist ‘National Rally’ party.
12.15am: Pennon chair to step down at AGM
While Susan Davy has recieved a 60% hike to her annual pay, chair of Pennon Group Gill Rider will depart from his role at the utility firm amid fallout from the Brixham diarrhoea outbreak.
Rider will leave the company following its annual general meeting, having been in his role for four years.
Shares in Pennon Group slipped over 1% to 589p, with the company down more than 18% since its subsidiary South West Water allowed a parasite which causes vomiting and diarrhoea to enter the water supply of the seaside town of Brixham.
Despite a £2.4 million cut to its dividend, the company recommended a total return of 44.37p per share for the year, up 3.8% from the previous year.
12.01pm: Pennon boss sees pay surge 60% weeks after Brixham diarrhoea outbreak
Pennon has revealed that under-fire boss Susan Davy got a pay rise of almost 60% last year just weeks after its subsidiary South West Water caused a major diarrhoea outbreak at the Devon town of Brixham.
Davy’s basic salary rose by 3.5% to £492,000 in the year to end March 2024, but on top of that, the chief executive received £298,000 from a long-term share scheme set up in 2021, taking the total to £860,000.
Pennon had been slammed by environmental campaigners for its record of sewage dumping in Devon and Cornwall’s rivers and near beaches on the coast, even before the Brixham incident that left hundreds with stomach problems.
It reduced its dividend in its April results to pay for a £2.4 million fine with a further £3.5 million earmarked for compensation to affected customers in Brixham.
11.31am: Oil prices fall lower
Oil prices slipped further on Monday after the OPEC cartel decided to begin growing supplies later in 2024.
Brent crude oil slipped under US$80 a barrel, continuing on a downward trajectory which saw its prices slip 2.5% last week.
Opec, the cartel of leading oil-producing countries, said it would start reversing production cuts in October last week.
West Texas Intermediate, the US-produced oil, fell around 0.2% to near US$75.
“Investors who overreacted to the Opec announcement last week are trying to grasp the possibility that additional barrels might not end up entering into global supplies," Priyanka Sachdeva, analyst at Phillip Nova said.
11.12am: Tesco recalls chocolate bars over allergy risk
Tesco has been forced to recall chocolate bars which may contain peanuts as the allergy risk was not declared on the label.
An urgent health safety warning was issued by the country's largest supermarket for its own-brand Nutty Nougat Caramel Chocolate Bars Multipack and Dreamy Caramel Chocolate Bars Multipack.
"This poses a possible health risk for anyone with an allergy to peanuts”, Tesco admitted.
A separate warning was issued by the government's Food Standards Agency.
“If you have bought the above products do not eat them. Instead, return them to any Tesco store for a full refund," the orginisation said in a message.
10.55am: Apple AI showcase "most important event in a decade"
Later today after markets in the UK shut, attention will turn to Apple and its annual Worldwide Developers Conference, where it could outlay its progress in the AI sector.
Apple was usurped by Nvidia as the second-largest company in the world last week, highlighting the benefit of the AI boom for tech firms and how Apple have lagged in recent times.
Scheduled for 6pm GMT, the event is expected to showcase Apple's "highly anticipated AI strategy”, according to analysts at Wedbush.
"We believe [the event] will kick off an AI-driven accelerated growth cycle on the iPhone and Services that will be the narrative of the Apple story for the coming years,” the US broker explained.
“In our view WWDC represents the most important event for Apple in over a decade as the pressure to bring a generative AI stack of technology for developers and consumers is front and center with Cook & Co. set to make history for Cupertino.”
10.34am: UK airlines being impersonated by scammers on X, research finds
Airlines are being impersonated on social media by fake scammers attempting to steal personal data from holidaygoers, new research from Which? revealed.
Every major airline has a scam X/Twitter account impersonating them, regularly tricking customers with phishing links in a bid to steal credit card details.
Which?, the consumer protection group, said X had been slow to remove the fake accounts from its platform.
X said it permanently suspends accounts which impersonate organisations and told Which? it had taken down all the fake accounts found in its research.
Fake accounts typically reply to queries or complaints posted by users on social media, with the scammers replying as if they were customer support.
Researchers said they had tried to contact Wizz Air's X account to see if a flight was delayed and immediately recieved responses from two fake accounts.
"Both used near-identical language, apologising for the inconvenience, stating that they had ‘already escalated this matter to the relevant department’ and requesting a ‘reachable WhatsApp number for assistance’ via DM [direct message],” Which? said.
9.57am: Cazoo closes in on sale of brand and marketplace
Online car dealer Cazoo is close to selling its brand and marketplace arm to privately owned Motors.co.uk, according to reports over the weekend.
The former SPAC crashed spectacularly into administration last month having been valued at more than US$8bn when it initially floated in the US.
No price was mentioned, but Sky News reported it would be a ‘significant discount’ to Cazzo's spending on widespread sports sponsorships, which included the Hundred cricket competition, premier league club Aston Villa and darts and snooker events.
In March, the company sold off its remaining stock and switched to a new online marketplace model, allowing used car dealers to list vehicles for sale on its platform, and wound down its European business.
9.45am: Morning so far
London stocks have continued to hold lower on Monday amid rising political instability across Europe, with only two FTSE 100 constituents, M&G and Rolls-Royce, having registered gains of more than 1%.
Macron called a snap election for the end of June in France over the weekend after a surprisingly strong performance for far-right parties in European elections.
This injects a big dose of the uncertainty which markets hate," Russ Mould at AJ Bell said.
“Financial stocks were among the worst performers in London as investors digested the news. Also affecting sentiment were Friday’s better-than-expected US jobs numbers which push back against the narrative that rate cuts are imminent."
Europe's STOXX 600, which tracks some of the largest companies across Europe, sunk around 0.55%, while Paris' Cac 40 tumbled 1.7% to 7,863.
In company news, Ashtead could become the next company to leave the London Stock Exchange in a move to the US, after it was revealed the company was currently completing a review of its listing.
Board members at the FTSE 100 group are concerned that the company, which operates largely in the States, is trading a "significant" valuation gap to that of its US rivals, the Sunday Telegraph revealed.
“What makes the reports about Ashtead’s potential listing switch intriguing is that the motivation appears to lie in staff remuneration, not equity valuation. There is a suggestion that Ashtead’s US-listed peers have their pockets lined with gold whereas the UK business only pays out silver or bronze," Russ Mould added.
“Theoretically, Ashtead could propose a big bump in the remuneration package for its directors without having to switch listing – it would simply need shareholder approval. Yet pay deals attract considerable public scrutiny and Ashtead might want to avoid being seen as the house of fat cats on a relative basis to UK-quoted peers.
“Sitting on the US stock market side-by-side to other companies doling out the riches to senior staff might not attract as much negative attention.”
9.24am: UK job market en route to recovery, says recruiters
Britain's drop in full-time hiring was its weakest in over a year in May, data from the Recruitment and Employment Confederation revealed, fueling hopes that the recruitment market may be on track for recovery.
Permanent hiring fell by the smallest amount in 14 months, the REC report showed, potentially providing a boost for the UK as the Bank of England scrutinises the study ahead of making a decision over when to cut rates.
"The jobs market looks like it's on its way back, with clear improvements over last month on most key measures," REC Chief Executive Neil Carberry said.
He added that the upcoming election and the prospect of interest rate cuts could remove employers' hesitancy over hiring new workers, which could help boost the performances of recruitment firms.
The FTSE 100 has held lower this morning, down around 0.33%, despite the positive boost in the recruitment sector.
8.59am: Shein IPO in London a "betrayal" to workers, says campaigners
Shein, the Chinese fast-fashion company, is facing pressure from campaigners ahead of its rumoured London IPO, with activists for workers' rights having said an admission to the FTSE would be "yet another betrayal to working people everywhere and the planet”.
Labour Behind the Label campaigner Alena Ivanova said the Britsol organisation had reacted "with dismay" after hearing reports Shein was close to launching a £50 billion listing in the UK.
Ivanova claimed the lack of transparency about its supply chain and ethical concerns, including allegations of forced labour in the Uyghur region of China and its “cavalier approach to design appropriation”, should be cause for concern.
It compounds on comments made by Mathias Bolton, head of commerce at UNI Global Union, who said: “Shein shouldn’t be rewarded with the credibility of being listed in the City, or anywhere else, given the lack of transparency in their supply chain and shocking reports of severe labour violations.”
8.40am: GSK jab receives label expansion from US regulator
GSK shares have slipped 1% despite it confirming it had recieved approval for RSV jab Arexvy by the US Food and Drug Administration.
Arexvy can now be used to help prevent respiratory syncytial virus in adults aged 50 to 59 at increased risk of severe outcomes from the cold-like infection.
GSK estimates over 13 million US adults fall into this category. The vaccine, already approved for adults aged 60 and older, is now available for younger at-risk adults.
Today's approval may struggle to clear the overhanging concerns regarding GSK's exposure to more than 70,000 lawsuits in relation to its discontinued heartburn drug Zantac.
Earlier this month, Judge Vivian Medinilla of the Delaware Superior Court ruled that expert witnesses can testify in court that the drug may cause cancer, which resulted in GSK shedding over £6 billion in value.
8.17am: FTSE 100 tumbles at open
London's blue-chip index sunk nearly 45 points lower at the open on Monday to 8,198 after markets reacted cautiously to a French snap election being called on Sunday.
Unemployment data also highlighted concerns for the UK economy after it was revealed the labour market had weakened, with the number of people looking for a job rising to its highest rate since 2020.
A mix of increased job cuts and fewer hiring meant a rise in unemployment in May, marking the 15th consecutive month of rises and taking the figure to the highest since December 2020.
Over in Asia, markets closed mixed with Japanese stocks having been boosted after its economy shrunk at a slower pace than analysts had expected.
In the first quarter of 2024, the Japenese economy contracted by 1.8%, beating out estimates of 2% and causing the benchmark Nikkei 225 index to close 0.9% higher at 39,038.
7.55am: Top THG investor joins calls to axe chairman
A top shareholder at THG, the e-commerce group, has joined a horde of activist investors in calling for its chairman to be removed.
Ophorst Van Marwijk Kooy Vermogensbeheer, the Dutch investment firm and THG's tenth-largest owner with a 1.89% stake, said it would be joining activist investor Kelso in voting against the re-election of Charles Allen as chairman.
Kelso, the investment fund which owns 0.55%, has been pushing for Allen's axing as it claims he is central to a "lack of action" on the company's strategy and the "disappointing" market valuation.
Ophorst said it would join the likes of Oliver Cookson, the founder of Myprotein who holds a 1.6% stake in THG, and Kelso in voting against the group's chairman at its AGM on June 24.
7.36am: Ashtead mulls switch to US
Ashtead, the industrial equipment provider, is considering joining the London exodus by switching its listing to the US, according to reports.
Board members at the FTSE 100 group are concerned that the company, which operates largely in the States, is trading a "significant" valuation gap to that of its US rivals, the Sunday Telegraph revealed.
"Ashtead is essentially a US business operationally, with over 90 per cent of its revenue and over 95 per cent of its operating profits being generated in North America," Lucinda Riches, a non-executive director at Ashtead said.
A company review is in its preliminary stages to see whether it is viable to make the same switch as done by Flutter, the betting group, CRH, the building materials supplier, and plumbing firm Ferguson.
A switch has been a focal point for the company for over a year, with boss Brendan Horgan having previously talked down the potential for a move.
“[Its] a topic that the board periodically takes under review and our position remains to be a FTSE constituent," he said back in March last year.
7.17am: FTSE 100 to open lower
The FTSE 100 is expected to open around 70 points lower at around 8,183 this Monday according to futures this morning.
Asian markets tumbled overnight as concerns the US would not cut rates until later this year were felt across the globe, with the MSCI’s broadest index of Asian-Pacific stocks tumbling 0.33%.
Meanwhile, in Europe, the euro slumped to its lowest level in nearly a month after French president Emmanuel Macron called a snap election after suffering a heavy defeat in the European Parliament votes.
The euro dropped around 0.4% against the pound at 84p, while it dropped 0.5% compared to the dollar at US$1.07.
Leading company news is water utility firm Pennon, which will unveil their boss’s pay package weeks after subsidiary South West Water apologised for a diarrhoea outbreak in Brixham.
Susan Davy declined her bonus last year, taking home a basic salary of £543,000 compared to £1.53 million the year before when she received a hefty performance-related boost.