- FTSE 100 down 74 points to 8,153
- Blue chips on track for worst session in 2 months
- Lower copper and iron ore prices hit miners
3.58pm: FTSE 100 takes hammering as 'contagion' murmurs lurk
UK stocks are on track to close out one of the worst sessions in recent months as the concerns about France's future and whispers of 'contagion' continue to grow.
Credit ratings agency Moody's warned Macron's snap election could lead to a downgrade for the French government, sending bank shares on both sides of the Channel lower.
Societe Generale slipped 4.3%, while BNP Paribas dropped 3.9%. The effects were also felt in London, with Standard Chartered falling 3.8%, while HSBC, NatWest and Barclays slipped around 2.5%.
Combined with the mining groups falling on weaker iron ore and copper prices and it puts the FTSE 100 at its lowest point since the start of May.
Glencore and Antofagasta slipped by around 3% and 4% respectively, while Rio Tinto dropped 2.5% after it revealed it was set to buy Mitsubishi's 11.7% stake in Boyne Smelters.
Hikma Pharma, Convatec and RS Group were the only three stocks in the FTSE 100 to have registered rises above 1%.
3.28pm: Elvis back in the building?
Elvis could be back in a building near you - albeit in hologram form as the creators of Abba Voyage look to build a new show using the King of Rock and Roll.
Pophouse, the Swedish entertainment firm co-founded by Abba singer Bjorn Ulvaeus, is hoping to develop a live show using a virtual version of Elvis.
Discussions have begun between Pophouse and Sony, which owns the rights to Presley's songs, and Authentic Brands Group, which owns his image and likeness, in the hope of partnering for the project.
Should a deal be worked out it would represent the second Elvis hologram tour in development in recent times, with British group Layered Reality already preparing an AI-powered concert set to take place in London in November before shows in Tokyo, Berlin and Las Vegas.
Abba Voyage took the industry by storm when it opened curtains back in 2022, with the show still being shown at the purpose-built Abba Arena, located in the Queen Elizabeth Olympic Park in east London.
Some two million tickets have been sold over the two years Abba Voyage has been running.
2.50pm: Wall Street slips at the open
US stocks have started the day lower, with both the S&P 500 and Nasdaq falling back from record highs at the close on Monday.
However, it was the Dow Jones which suffered the largest hit, dropping by 0.76% or 294 points to 38,573.
Meanwhile, the S&P 500 dropped 0.4% or 21 points to 5,339, while the Nasdaq slipped 0.06% or 11 points to 17,176.
Some stocks making moves on Tuesday included General Motors, which lifted 1,7% after it announced a US$6 billion share buyback, following the early completion of a US$10 billion stock repurchase programme launched last November.
Eli Lily shares had started the day up more than 2% following FDA advisors recommending the approval of its Alzheimer's drug donanemab, however, the stock quickly slipped and is currently down 1%.
Shopify also jumped at the open before slipping back slightly, with the group receiving a boost after JP Morgan initiated its brokerage coverage with an overweight rating for the stock.
2.31pm: ex-NatWest boss gets first job since Farage debanking scandal
Former NatWest boss Alsion Rose has found a new job around a year after she was left the lender over the Nigel Farage Coutts debanking scandal.
Rose has been hired as a senior advisor at London-based private equity firm Charterhouse, which has previously owned AA and Saga, according to Financial News reports.
The first woman to lead a major British bank is believed to have started her role back in April.
Back in July, NatWest and Rose parted ways after she admitted to being the source of a BBC story about Farage's finances with the lender's wealth management division Coutts.
In November, the bank confirmed that it would pay no more than £1.75 million to Rose for her last year at the company, not the full £10 million that she might have received.
NatWest's board said that as 'good leaver' status is not applicable - though no findings of misconduct have been made against Rose by the group - that share-based payment due to vest after her notice period ends next July will lapse, valued at the time at £4,711,491.
1.43pm: Mortgage arrears hit decade-high
While strikes fall to some of the lowest levels in years, mortgage arrears are on the rise, with new Bank of England figures showing the missed payments are at a decade high.
The value of mortgages with arrears rose 4.2% in the first three months of 2024 to £21.3 billion when compared to the last quarter of 2023.
It represents a 44.5% jump compared to a year earlier, marking the highest point since the period between July and September 2014.
Even though mortgage defaults remain at a historically low point, the surge highlights the pressure that 16-year-high interest rates are putting on homeowners.
Abigail Fernandes at Pepper Advantage, the credit intelligence provider, said: “However, the state of the housing and mortgage markets is not the same across the whole of the UK, with disparity between regions.
"We found that the arrears growth rate increased during Q1 for both the North East and North West regions while it decreased in other areas, including the South East and Greater London."
1.20pm: Strikes at lowest level in two years
Strikes in the UK fell to its lowest number in more than two years, according to Bloomberg reports.
In April, the number of days lost through strikes fell to 17,000, bringing it to the lowest level since February 2022.
Walkouts across industries soared during the cost-of-living crisis, with high inflation leading to a peak of more than 800,000 days lost at the end of 2022.
Rail, postal and NHS workers all underwent industrial action for better pay over the last few years.
A slow of strikes may be short-lived, however, as junior doctors look to stage a walkout and several unions threaten strikes no matter the outcome of the election.
UK strikes ease to lowest in 2 years ahead of election https://t.co/jEIrlSQVDj via @tomelleryrees pic.twitter.com/FpiWjEFANQ
— Zoe Schneeweiss (@ZSchneeweiss) June 11, 2024
1.00pm: Tories go big on national insurance in its manifesto
Rishi Sunak has put another national insurance cut and immigration at the heart of the Conservative campaign to get re-elected.
Launching the Tory manifesto today, the Prime Minister said that his party would bring“ lower immigration, lower taxes and protected pensions”
Tax has already played a major role in the earlier skirmishes between the two main parties but the immigration element reflects the ground being lost to Nigel Farage’s Reform Party.
Reform’s poll results have been rising while the Tories have dropped even more and Farage is now confidently predicting it will oust Tory MPs in some seats.
In the manifesto, Sunak said he would reduce national insurance by a further 2% following the cut to 8% from 10% in the last Budget having already cut it from 12%.
That will cost more than £10 billion a year by 2028/29 but with the drop added to the earlier cuts, the manifesto claims that for someone earning £35,000 a year, it will save them £1,350.
12.38pm: Wall Street to open lower
Wall Street is on track to open lower this afternoon showing that the current concerns in Europe are being felt across the globe.
Dow Jones futures were down 150 points at 38,771, while the S&P 500 and Nasdaq are predicted to drop by 15 and 60 points respectively.
Economists are also preparing for the Federal Reserve's decision on interest rates on Wednesday and while expectations are that they will remain the same, guidance for summer cuts could prove vital in stimulating the market.
“We’ve got two big events coming in the middle of this week: the CPI print on Wednesday morning and the Fed meeting on Wednesday afternoon," said Zachary Hill at Horizon Investments.
“We’re kind of just biding time a little bit ahead of those.”
While traders await Wednesday's decision, tech investors have continued reacting to Apple's AI announcements from yesterday, in particular its partnership with OpenAI.
Shares in Apple fell 1.9% on the day and in premarket trading on Tuesday were down another 0.5% to $192.18.
Twitter owner and Tesla and SpaceX boss Elon Musk threatened to ban Apple devices from his companies if ChatGPT is integrated at the operating system level, as it is “an unacceptable security violation”.
“Unimpressive,” was the short review of the investor reaction from Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“None of it surprised or impressed investors,” she said, with the “cherry on top” for financial markets being Musk’s reaction. “The announcement from Apple didn’t go down smoothly the market’s throat yesterday,” said Ozkardeskaya.
Others were much more impressed. Not surprisingly, this included perma-bull analyst Dan Ives at Wedbush.
“Apple Intelligence changes the game for Apple... [it] is taking the right path to implement AI across its ecosystem while laying out the foundation for the company’s multi-year AI strategy," he said.
12.23pm: FTSE 100 takes a tumble
London stocks have plunged ahead of lunch, with the FTSE 100 down more than 70 points despite having started the morning in the green.
Blue chips looked like they had initially shrugged off mixed data regarding the labour market after both unemployment and wage growth soared to their highest points since the pandemic.
The FTSE 100 held flat in reaction as the markets attempted to guess whether the data would weaken or drive the chance of interest rate cuts this summer.
However, with the volatile European political landscape continuing to drive concerns, the index slumped.
Credit ratings agency Moody's warned Macron's snap election could lead to a downgrade for the French government, sending bank shares lower.
Societe Generale slipped 2.7%, while BNP Paribas dropped 2.4%. However, the effects were also felt in London, with Standard Chartered falling 3%, while HSBC dropped 2.% and NatWest and Barclays slipped around 1.5%.
Also pushing the index lower were falls from mining companies like Glencore and Antofagasta, down 3% after copper futures slid over 2%.
Rio Tinto also slumped 2.5% after it revealed it was set to buy Mitsubishi's 11.7% stake in Boyne Smelters.
12.00pm: Raspberry Pi rallies 40% in early dealings
Raspberry Pi has seen its shares jump more than 40% three days before it is available for retail investors to trade.
Shares have begun "conditional dealing" allowing institutional investors to submit orders ahead of full trading on Friday.
Originally priced at 280p, shares in the DIY computer maker lifted to 392p.
Raspberry Pi will list with a market capitalisation of more than £540 million, with the Cambridge firm raising around £166 million from the float.
Eben Upton, chief executive of Raspberry Pi, said: “The quality of the interactions during the marketing process has underlined our belief that London has the right calibre and sophistication of investor to support growing, ambitious technology businesses such as Raspberry Pi.
11.37am: Oil prices hold onto biggest rise in months
Oil prices have held onto their largest gain since March this morning as the prospects of greater fuel demand this summer grow.
Brent crude prices slipped 0.28% to US$81.40 a barrel, while West Texas Intermediate fell 0.36% to US$77.46.
Tomorrow Opec, the oil cartel, will provide an insight into the commodities outlook with its monthly report, while forecasts from the US and the International Energy Agency are also expected to guide the market.
Yeap Jun Rong, market strategist with IG Asia, said: “Market participants are hoping to tap on some optimism around upcoming summer demand.”
11.08am: Moody's warns of downgrade to French credit rating
Moody's may downgrade the French government's credit rating if the political uncertainty caused by Macron's call for a snap election continues.
France's government was warned by the rating giant that "potential political instability is a credit risk", especially in a country where the “debt burden is the highest among similarly rated peers”.
Macron called the surprise vote over the weekend after his party suffered heavy defeats to the right-wing group National Rally in the European Parliamentary elections.
Should Macron's party lose control of parliament to the French National Assembly, economists have expressed concerns that the government will increase spending at a time.
This would add to the current deficit faced by French parliament, which at the end of 2023 stood at 110.6% of GDP.
Moody's believes that if National Rally seize power spending could rise to 115% of GDP within the next three years, which would leave the country "more susceptible to a rising cost of funding."
Analysts at the New York firm said: “The outlook, and ultimately the ratings, could move to negative if we were to conclude that the deterioration in debt affordability – which we measure as interest payments relative to revenue and GDP – will be significantly larger in France than in its rating peers.”
10.43am: M&G tidies balance sheet with bond redemption plan
M&G PLC (LSE:MNG), the fund manager, has decided to use its excess capital to reduce its debt pile and improve the quality of its balance sheet.
Up to £450 million worth of bonds will be redeemed through tender offers for outstanding lower-grade Tier 2 and Tier loan notes.
“We would expect the £216m restriction to Tier 2 and Tier 3 capital reported at the 2023 FY Results to become immaterial following the conclusion of these deleveraging actions, which would meaningfully improve the efficiency of M&G's balance sheet,” said a statement.
M&G announced a final dividend costing £311 million with its 2023 results, but even with that outlay added its financial ratio Solvency II was 203% or well above its regulatory requirement.
10.21am: Tata Steel continues with Port Talbot job cuts despite government uncertainty
Tata Steel said it is still going ahead with plans to shut down its Port Talbot blast furnaces despite feeling "apprehensive" that the closures "may be put in peril" by the incoming Labour government.
Restructuring plans are expected to continue over the next months, predicted to cause thousands of job losses as the company looks to move into greener forms of production.
Labour had urged Tata Steel to avoid continuing with the closure until after the results of the election.
Nevertheless, the Indian steel maker said: "The company confirms that it will continue with the announced closure of the heavy end assets and restructuring program at Port Talbot in the coming months.”
As part of Tata's changes, it is aiming to use an electric arc furnace, which requires fewer workers and will see a £1.3 billion investment into clean tech.
It urged both political groups “to adhere to and safeguard the agreed terms” of its restructuring plans.
Alasdair McDiarmid, assistant general secretary at Community union, said: “It would be wrong for Tata to make irreversible decisions before such a consequential election.”
9.59am: Musk threatens to ban iPhones across his businesses
Elon Musk is preparing to ban Apple devices from all his companies should it go forward with its partnership with OpenAI.
The Tesla boss said workers would not be permitted into his offices if they have an iPhone which has OpenAI's technology integrated into its operating system.
Last night, Apple revealed it had stuck a deal with OpenAI to integrate ChatGPT into iOS, iPadOS, and macOS later this year.
This will allow Siri to utilise ChatGPT’s capabilities, enhancing features such as text generation and image creation within Apple's Writing Tools.
“If Apple integrates OpenAI at the OS [operating system] level, then Apple devices will be banned at my companies. That is an unacceptable security violation," Musk posted on Twitter/X.
He claimed Apple weren't "smart enough" to produce its own AI technology and asked how OpenAI would protect the privacy and security of its users.
Musk, who co-founded and was involved in OpenAI before falling out with boss Sam Altman, is also facing pushback from Tesla shareholders ahead of a vote for his US$56 billion pay package, with many expected to vote against the record bonus.
9.37am: GSK appeals Zantac court ruling
Shares in GSK lifted a little over 0.5% after it and other pharmaceutical companies asked a Delaware court to allow an appeal of a ruling permitting over 70,000 lawsuits claiming Zantac causes cancer.
Analysts had expected the UK drug giant, along with Pfizer, Sanofi and Boehringer Ingelheim to contest the original ruling.
Judge Vivian Medinilla of Delaware Superior Court will decide if the appeal can go directly to the Delaware Supreme Court. If denied, the companies will request the Supreme Court to hear the case.
Earlier this month, the Delaware state court allowed plaintiffs' expert testimony in Zantac trials, contrary to a previous Federal court decision dismissing all multi-district litigation (MDL) cases.
GSK insists there is no reliable evidence linking Zantac (ranitidine) to certain cancers and remains confident in its defence.
Separately, the pharma giant announced that a woman dropped her Zantac-related breast cancer case before trial.
9.14am: Unemployment rate at its highest since pandemic
Bank of England economists will be scratching their heads ahead of next week's interest rate decision after official data offered a mixed view of the labour market.
Wage growth rose by 5.9% in the three months to April, its highest rate since the pandemic highlighting strength in the economy and indicating that there is some way to go before rates can be cut.
However, in contrast, unemployment figures also soared to their highest level since the pandemic, having lifted 4.4% in the same period.
Analysts had expected jobless rates to remain unchanged from the 4.3% jump seen in three months to March.
Kathleen Brooks at XTB said: "The market is now pricing in the chance of an August cut with a 40% probability, however, there is still only one cut fully priced in for the UK this year.
"We think an August rate cut is still unlikely, however, the movement in interest rate expectations could keep the pound under pressure on Tuesday."
8.53am: Government sells another portion of NatWest stake
NatWest has confirmed that the government has further reduced its stake in the lender by an extra £57.3 million, bringing its stake from 22.5% to 21.93%.
Some 18.4 million shares were flogged by the Treasury in the last week, with the government having previously said it sold £1.24 billion of its stake at the start of the month.
When Sunak called the election a few weeks ago, the government was forced to put its eagerly awaited retail offer on hold until after the vote.
It is now expected to be after the election when investors will get a chance to buy shares from the government.
NatWest intends to cancel over half of the repurchased shares and hold the remaining 170 million in treasury, given the option to cancel or reissue the shares at a later date.
The Treasury has been steadily selling down the government’s stake in the bank acquired as part of a bail-out package following the Global Financial Crisis.
8.29am: FTSE 100 opens higher despite blow to rate cut hopes
London stocks have ticked slightly higher on Monday as the markets reacted to the prospect of interest rates staying high for longer.
Wages in the UK grew at a faster-than-expected pace of 5.9% in the three months to April, according to the Office of National Statistics, knocking hopes that the Bank of England would begin slashing interest rates this summer.
When accounting for inflation, wages rose by 2.7% between February and April, marking the single largest three-month jump since September 2021 and the highest since 2015 when excluding the pandemic.
Bank of England economists have previously said wage growth must not threaten inflation and should be rising modestly before they can feel confident about cutting borrowing rates.
Meanwhile, in company news, Raspberry Pi confirmed it would be listing at 280p a share, the top end of its pricing guidance.
It means the DIY computer kit maker will raise around £166 million and have a market cap of £540 million.
While Raspberry Pi limbers up for a listing, the LSE suffered a fresh blow after reports said the owner of pharmacy chain Boots would no longer be pursuing a London listing for the retailer.
Finally, shares in FirstGroup, the rail and bus operator, plunged more than 4% after it suffered a £24 million loss in 2024, having been faced with a £146 impairment charge for exiting to pension scheme.
8.12am: FirstGroup slides to a loss as it suffers hit from quitting pension schemes
FirstGroup PLC (LSE:FGP), the rail transport group, posted a statutory loss before tax of £24.4 million this morning, mainly due to it suffering a £146.9 million hit related to the termination of its participation in two Local Government Pension Schemes.
First Bus revenue increased to more than £1 billion from £902.5 million in 2023, driven by higher passenger volumes, while operating profit rose to £83.6 million, up from £58.4 million the previous year.
Management said the division, which owns multiple bus companies across the country, remains on track to achieve a 10% adjusted operating profit margin by H2 2025.
FirstGroup revealed it has committed to significant investment in the electrification of its bus fleet, aiming for a zero-emission fleet by 2035.
First Rail, which owns franchises such as South Western Railway and TransPennine Express, also grew over the year, with adjusted operating profit increasing to £105.6 million from £93.3 million.
Graham Sutherland, CEO, said: "We will continue to lead in environmental and social sustainability, including building out our adjacent electrification opportunities in First Bus, and investing to grow and diversify our portfolio to ensure our business remains profitable and resilient in the long-term.”
FirstGroup proposed a final dividend of 4.0p per share, bringing the total annual dividend to 5.5p per share, a 45% increase from the previous year.
7.55am: Boots looks for take private sale following LSE snub
Plans for a sale of Boots have been in the works since 2022, but were held on pause after an "unexpected and dramatic change" in the market backdrop.
At the time, buyers considered to be interested were Apollo, the private equity owner of Wagamama, Indian conglomerate Reliance Industries and the Issa brothers, the Asda owners whose empire has come under pressure in recent years and has seen Zuber exit his stake in the supermarket.
Other private equity rivals such as Bain Capital and CVC were also believed to have been interested.
A Walgreens spokesperson said: "We do not comment on rumours or speculation.
“Walgreens Boots Alliance is conducting a strategic review of our assets to drive sustainable long-term shareholder value. All options are on the table.”
Despite, Boots turning its back on the LSE, Raspberry Pi's listing and rumours of Shein filing for an IPO in the near term have provided a well-needed boost for the market and could pave the way for more floats.
Take a look at some of the other rumoured floats here.
7.36am: Raspberry Pi to list on Friday at top end of pricing range
Raspberry Pi, the maker of DIY computer kits, has confirmed it will undergo its IPO on Friday and will see shares listed at 280p each, confirming reports which indicated the group was eyeing the upper end of its pricing guidance.
It means the company will enter the LSE with a market capitalisation of more than £540 million, with over 45.9 million shares set to be sold by the Cambridge firm when it lists.
A further 2.1 million shares will be flogged by other shareholders of the company, while 11.2 million new shares will be issued, raising around £31.4 million.
In total, the offer size is around £166 million and represents a little over 30% of the total ordinary shares in admission.
A further 3% of shares are being held by the company and will be made available should an "over-allotment" option be exercised, bringing the total raised to £179 million.
7.20am: FTSE 100 to open higher
The FTSE 100 is looking likely to open at around 8249 up by more than 20 points this Tuesday as stocks look to bounce back from a sluggish start to the week, according to pre-market futures.
Asian markets saw a period of subdued trading as the continent remained cautious, still uncertain about what European political instability will mean for the wider world.
Asia-Pacific’s broadest index, barring Japanese shares, slipped by around 0.5%, while Chinese markets fell 1.2% after having been closed on Monday.
Overnight in the US, Apple announced a major partnership with OpenAI to integrate ChatGPT into Siri as part of its new push into AI.
Named “Apple Intelligence”, the plans look to optimise user experiences by rewriting, suggesting, and summarising text, and even editing photos based on context or specific request
Meanwhile, London’s stock market suffered another blow when the Walgreens Boots Alliance revealed it had axed plans to list the high street pharmacy chain.
Hopes for a UK float have been swapped with plots for a sale, with private equity firms believed to be interested in the group, Bloomberg revealed.