- FTSE 100 down 61 points at 8,154
- Oil prices to hit US$60 next year
- North Sea oilers hit by Labour plans
3.55pm: FTSE 100 to close lower
London's blue chips are set to close out Thursday lower as the markets react to the possibility of lower oil prices, Labour's manifesto and US inflation easing.
Citi research today revealed oil prices could dip to as low as US$60 per barrel by next year as supply begins to outstrip demand.
Adding salt to the wounds of oil companies was Labour's manifesto, which revealed plans for a publicly owned clean energy company built through the windfall taxes of businesses in the industry.
Starmer also promised to not award any North Sea licences in a bid "ensure a phased and responsible transition”.
Over in the US, wholesale prices unexpectedly slipped by 0,2% in May, emphasising that inflation in the States is starting to ease.
In equities, Halma was top of the FTSE 100 risers after it jumped 13% on the back of record revenues and the lifting of its annual dividend for the 45th consecutive year.
Also trading higher was BT, which jumped 3.5% higher after Mexican billionaire and Latin America's richest man Carlos Slim revealed he had bought a 3% stake in the telecom giant.
Moving the other way was a range of housebuilders including Berkeley and Persimmon, both down 3%, after FTSE 250 firm Crest Nicholson indicated market conditions had been tough in recent months.
Outside the index, Wise, the fintech firm, experienced a rollercoaster day after its shares sunk more than 12% despite it posting a tripling of its profits.
3.31pm: Bitcoin moves backwards as cash pours into ETFs
Bitcoin has slipped back close to 1.5% when compared to the US$, despite research revealing cash poured into crypto ETFs in May, taking assets to record highs.
The world's largest cryptocurrency fell to around US$67,319 on Thursday, offsetting much of the gains made on Wednesday, but leaving it down more close to 3% week-on-week
The assets held in Bitcoin ETF and other cryptocurrency exchange-traded products mushroomed to a new all-time high of $95.40 billion last month, according to research by Fineqia International Inc.
In May alone, the AUM of exchange-traded products with digital assets as underlying collateral increased 18% from $81.00 billion.
Since the start of the year, the AUM of ETPs holding digital assets has risen by 93% compared to the digital assets market cap increasing 51%, growth of 82% in the premium for ETPs relative to the underlying assets.
3.13pm: Shein raises prices ahead of London IPO
Shein has raised its prices, with some of its top products being upped by over a third as the Chinese fast-fashion giant prepares itself for a London IPO.
Prices at the company rose at a faster rate than its high-street rivals H&M and Zara in a bid to boost its revenue before its £50 billion listing, research from retail intelligence company Edited found.
Famed for its low prices that undercut both high street retailers and European rivals, analysts said the price cuts were part of the company's plan to demonstrate its ability to charge more ahead of a float.
Examples of the price rises include a Shein dress which rose to £24.12 in the UK, increasing by 15% in a year, while the same product in Germany, Italy and France lifted by 36%.
“If they can demonstrate that these prices stick then the valuation increases significantly," Alex Romanenko at Pearson Ham Group said to Reuters in an interview.
New research also highlighted that talk of Shein's listing in the UK has caused a 45% rise in its customer base in the country since the start of 2024, according to GWS Magnify.
As of May this year, Shein had around 10.5 million monthly users in the UK, marking a 28% rise in the last twelve months.
2.45pm: US stocks flat at the open
Wall Street has gotten off to a mixed start today, with markets digesting the latest set of economic data, which indicated that inflation is slowing.
The Dow Jones dropped by 120 points or 0.3% to 38,591, while the Nasdaq lifted 0.65% or 114 points to 17,724.
Meanwhile, the S&P 500 rose 0.26% or 13 points to 5,435.
It comes after May's producer price index, which tracks the rises in wholesale prices, dropped by 0.2%, beating guidance for a 0.1% rise.
In equities, Broadcom shares opened close to 14% higher after it beat second-quarter estimates and announced a 10-1 stock split.
Dave & Buster's Entertainment dropped around 7% after it missed revenue guidance in its quarterly update.
2.30pm: Small cap oil and gas firms tank on Labour's North Sea plans
Small-cap oil and gas companies which operate in the North Sea have tumbled after the Labour Party confirmed its plans to create a publicly-owned clean energy business funded through windfall taxes.
As well as creating Great British Energy, Labour has promised to not award any new licenses to oil and gas firms in a bid to "ensure a phased and responsible transition in the North Sea”.
As a result, shares in Serica dropped 8%, Deltic fell 14%, Jersey Oil & Gas tumbled 21% and Ithaca slipped 2%.
Cleantech companies also tumbled at the prospect of new competition, with the likes of Inspirit Energy losing a quarter of its market capitalisation.
Keir Starmer talking on the topic today said: "We want the oil and gas companies to pay fair tax on the massive profits that they’re making."
Shell and BP both held flat in reaction.
1.42pm: Wall Street set for mixed session as wholesale prices fall
US stocks are expected to have a mixed day of trading, according to premarket futures, with markets still weighing up the impact of the Federal Reserve's interest rate decision and a cooler-than-expected inflation print.
As expected the Fed kept interest rates at 5.5%, but opened the door for a possible rate cut later this year, buoyed by May's inflation data coming in below consensus.
"With most members split between one or two cuts we wouldn’t be surprised to see market pricing continue to flirt with multiple rate cuts this year,” said James McCann at abrdn.
This afternoon, markets recieved another boost on the route to rate cuts after wholesale prices dropped unexpectedly in May.
The producer price index, which measures the rise in wholesale prices, declined by 0.2% in May, switching from the 0.5% rise in April and beating out consensus forecasts of a 0.1% jump.
1.24pm: Wizz Air ranked worst for delays for third year running
Wizz Air shared dropped more than 1.5% after it was found to be the biggest offender of delaying its flights in the UK, again.
On average, flights from the budget airline leaving the UK depart 31 minutes and 36 seconds after they are scheduled to, research from the Civil Aviation Authority found.
While it is a slight improvement on last year, it wasn't enough to stop Wizz Air being crowned the tardiest airline for the third consecutive year.
Despite the poor punctuality, the FTSE 250 firm saw a slight rise in passengers during May, carrying some 5.13 million passengers, representing a 1.2% rise in capacity year-on-year.
Turkish Airlines was ranked second-worst with an average delay time of 28 minutes and 36 seconds, followed by Tui at 28 minutes and 24 seconds.
Emerald Airlines was found to be the most punctual airline with passengers waiting an extra 13 minutes and six seconds on average, slightly ahead of Virgin Atlantic's 13 minutes and 42 seconds.
"Helping our customers reach their destination is our number one priority and we will continue to invest in our service to ensure they get there on time," a Wizz Air spokeswoman said.
1.05pm: Key highlights from Labour's manifesto
Kier Starmer's Labour Party has unveiled its manifesto ahead of the July 4 election, here are some of the highlights:
- Cut NHS wait times by adding 40,000 more appointments a week
- Crack down on tax avoidance and non-dom loopholes
- New border security unit to fight illegal immigration
- Promise not to increase national insurance, income tax or VAT
- Cap corporation tax at 25%
- Set up Great British Energy, a publicly-owned clean power company paid for through windfall tax on oil and gas companies
- Crackdown on antisocial behaviour
- Hire 6,500 new teachers, remove tax breaks for private schools
- Give 16 and 17-year-olds the right to vote
12.31pm: Royal Mail union boss sets sights on employee-ownership model
Union bosses representing Royal Mail workers are hoping that potential buyer Daniel Kretinsky would be open to giving staff part-ownership through a collective employee trust.
Taking a leaf out of John Lewis's book, Communication Workers Union (CWU) general secretary Dave Ward has said he wants his 110,000 Royal Mail workers to have a say on how the business is run and a share of the profits.
He argued that it is an impossible goal under the current leadership at International Distribution Services, Royal Mail's parent company, pointing to distrust and mutal fear between the union and boss Kieth Williams.
Ward said: "The current IDS board has no strategy to make the Royal Mail successful... The members are demoralised because of the way they are being treated, attacked and alienated by management in a way we have never seen before.”
Therefore he has focused on talks with Kretinsky, whose £3.5 billion bid was waved through by management, and the Labour Party to help develop a “new business and governance model” for the postal service.
"We said we believe the current business model is broken but that there is a chance to align the interests of workers, customers and the company for the benefit of the UK economy," the CWU boss added.
"Unless the workforce are on board, Royal Mail won’t succeed.”
12.13pm: Oil prices to hit US$60, predicts Citi
Oil prices are expected to fall to below US$60 by the end of next year as supply begins to outstrip demand, analysts at Citi have forecast.
Following plans by the Opec cartel to increase production after delaying cuts until later in 2025, the market is set to experience a surplus of 2.5 million barrels per day by next September, the analysts said.
Brent crude, the international benchmark, is expected to rise to US$82 a barrel within the next three months before slumping starting to slide in the fourth quarter, before tumbling to US$60 in the next year.
Elsewhere, the IEA said there would be a "staggering" surplus of oil by 2030, with some 8 million barrels to many expected to be produced per day by the end of the decade.
Max Layton, analyst at Citi, said: “Oil balances look exceedingly weighty, with global balances moving into meaningful surplus even if Opec+ extends all cuts through to end-2025.”
11.52am: Crest Nicholson's bleak performance sends housebuilders lower
Shares in Crest Nicholson have tumbled more than 8% and have sent other housebuilders slightly lower after it reported weaker conditions for the housing market.
The FTSE 250 firm said house sales fell back since Easter due to the volatility in mortgage rates with the election causing more uncertainty.
Interim revenue tumbled to £257 million from £282 million and as a result, half-year profits to end April dropped almost 90% to £2.6 million.
Taylor Wimpey, Persimmon and Barratt all dropped around 1.5% in reaction to the dampening industry conditions.
AJ Bell analyst Russ Mould said: "The company says since Easter it has seen a softening of the momentum which had built up at the start of the year.
"[Crest Nicholson] and the wider sector will hope this relates more to short-term uncertainty around the election than the fact interest rates look set to stick at a higher level for longer than hoped.
“This has translated into volatility in the mortgage market and slowed the hoped-for reduction in borrowing costs which is such a crucial driver of demand.”
11.28am: China hits back at EU's hike in EV import tariffs
A trade war between the EU and China could be brewing, echoing that of the situation between the latter and the US.
Yesterday, the EU announced a rise in tariffs for Chinese-made EVs with companies such as MG, BYD and Volvo facing taxes of as much as 50% on imports.
Now, China has threatened to file a lawsuit with World Trade Organisation.
He Yadong, Beijing's commerce ministry spokesperson, said: "China reserves the right to file a suit to the WTO and take all necessary measures to resolutely defend the rights and interests of Chinese companies.”
Despite the looming trade war, BYD, the Chinese EV group, has seen its shares rally as much as 8,8% in reaction to the tariffs being lighter than initially expected.
BYD cars being imported into the EU face a 17.4% tariff, coming in on the lower end of the taxes for Chinese EV imports.
11.07am: Peel Hunt shares hold flat as market optimism offsets annual losses
Shares in Peel Hunt held flat this morning after its slight optimism for the London Stock Exchange helped offset a loss in the latest financial year.
“We are seeing tentative signs that a recovery from the lows of the last two years is underway,” said chief executive Steven Fine in a statement.
Even so, the small-cap specialist saw losses more than double to £3.3 million (£1.5 million) even though revenues rose by 4% to £85.8 million.
Investment banking sales rose by 39% to £32,6 million but there were declines in both trading and research services.
"It is hard to dispute that 2023 was a dismal year for UK equity market activity," said analysts at Stifel's KBW said.
"Against this backdrop, Peel Hunt's revenue performance to March 2024 (+4%) was arguably more than respectable.
"With the business having consistently delivered PBT of c.£20m+ per annum before the slowdown, we remain positive."
10.49am: Tesla share pop as Musk declares victory over pay vote
Tesla shares have reacted positively to chief executive Elon Musk's claims that he has won the vote to approve his US$56 billion pay package, prior to an official announcement.
Shares in the EV maker lifted close to 5.5% in premarket trading after the SpaceX boss and X owner took to social media to declare victory.
A shareholder meeting is scheduled to take place later today, but it appears Musk has already taken a peak at the preliminary voting.
Both Tesla shareholder resolutions are currently passing by wide margins!
♥️♥️ Thanks for your support!! ♥️♥️ pic.twitter.com/udf56VGQdo
— Elon Musk (@elonmusk) June 13, 2024
Official shareholder votes are yet to be released.
Musk's self-proclaimed victory comes a day after a Wall Street Journal article accused him of sexual harassment and gender discrimination at SpaceX, of which he is the chief executive and founder.
10.06am: Revolut ups London office space as expansion drive continues
While it has been a tough day for listed fintech firms and banks, with both Wise and Virgin Money warning of the impact of lower interest rates eating away at guidance, it hasn't been all negative for the private companies in the sector like Revolut.
This morning, the challenger bank underlined its ambitions in the City by taking the top four floors of a recently refurbished tower in London’s financial district of Canary Wharf.
Revolut signed a 10-year lease at 30 South Colonnade, which was recently renamed YY London.
Two Revolut logos will blaze out on either side of the building with bank staff expected to be in place by May next year.
Revolut was valued recently at £24 billion and has been on a hiring spree recently with 1,500 new staff slated to be added by the end of this year.
9.46am: Wise plummets as falling interest rates hit outlook
Shares in Wise are down more than 15.5% this morning after analysts flagged concerns over the impact of falling interest rates in the near term.
Calling its guidance "disappointing", analysts at Jefferies said forecasts for underlying total income of between £1.35 billion and £1.41 billion in 2025 was 2% below consensus.
Hannes Leitner, analyst at the US bank, argued that net interest income, which tracks the money generated from deposits, is at risk of "tailwinds" due to concerns that the group is "using interest income to fund its core business, which is transitory”.
"While the announced guidance is disappointing at first glance given the price reduction, however, we think the cuts boost confidence in medium-term growth,” Leitner said.
Wise issued pre-tax profit margin guidance of between 13% and 16% or £175 million to £225 million, which was down by around 19% when compared to the City's estimates of 18% or £247 million, Jefferies added.
It comes despite Wise having reported pre-tax profits trebling in 2024 to £242 million.
9.16am: Virgin Money investors shrug off warning of lower margins
Virgin Money investors have shrugged off its warning that interest rates will eat away at margins this year, with shares keeping flat on the knowledge the lender will be absorbed by Nationwide.
Net interest margin, a key metric for banks, is predicted to fall in the second half of 2024 as it feels the effect of interest rate cuts and growing competition, the company said in its interim results.
Despite the warning, shares in Virgin Money held flat at 214p, like they have for much of the time since it accepted a takeover offer from Nationwide in March.
The building society offered to buy the FTSE 250 bank for 220p per share or around £2.9 billion, with the deal being approved by shareholders but facing a probe by the Competition and Markets Authority.
In the first six months of Virgin Money's financial year, pre-tax profits rose 18% to £279 million compared to 2023's £236 million, while total customer lending lifted by 0.3% to £72.7 billion.
Chief executive David Duffy said: “While we expect there to be headwinds through the second half of the year, we remain well placed to deliver growth in our target segments.”
8.55am: Fuller's benefits from switch to tenanted pubs and site revamps
Fuller Smith and Turner, the pub group, is trading flat this morning despite posting a surge in profits amid plans to upscale its sites while passing management of some onto tenants.
Sales jumped by 11% to £360 million in the year to March, helping pre-tax profits lift close to 39% to around £14.4 million.
Fuller's said it invested some £27.2 million in refurbishing its sites, while around 23 of its managed pubs and hotels were turned into tenanted sites, with management of these sites required to purchase stock from the landlord.
Through making this switch the hospitality firm expects to add an incremental £1 million to its profits.
Ahead of thousands of punters across the country cheering on their country in the Euro this weekend, the group said sales in the last few weeks had already risen year-on-year by around 4.4%.
Boss Simon Emeny said: "Fuller’s has delivered these excellent results in the last financial year, despite the high inflationary environment.
"As of today, those inflationary pressures - especially in regard to food and energy - have reduced, which gives us additional confidence in the coming year."
Mark Crouch at eToro welcomed the results, claiming the "signs are positive for Fuller's" pointing to tourist recovery and a steady return to office work in London.
“A hot summer, should we be so lucky, will speed up the recovery and the company will of course have one eye on the European championships kicking off later this week, which promises to bring pub goers out in force. With England tipped to go deep into the competition, a healthy boost in profits could be coming home for Fuller's," Crouch added.
8.37am: FTSE 100 edges lower
UK stocks have edged lower this morning as the markets reacted to the Federal Reserve's hawkish tone at yesterday's meeting, with policy makers now targetting just one rate cut this year.
Making early movements was Halma, which led the charge, after it posted yet another record profit, leading to management hiking the annual dividend for the 45th year in a row.
BT also experienced a lift after it was revealed Latin America's richest man Carlos Slim had taken a 3% stake in the telecom giant.
Housebuilder Barratt and real estate firm Land Securities slipped in early movements after new industry data revealed the housing market's recovery "slipped into reverse" after the announcement of the election.
New buyer demand and prices dropped in May, as the confidence in the UK housing market began to wane, the Royal Insititute of Chartered Surveyors said.
Over in the US, attention is turning to the vote on Musk's historic US$56 billion pay package, which he has taken to to Twitter/X to claim he has won.
Tesla investors are scheduled to vote against or for its boss's bonus, with top shareholders and proxy advisors having already come out against the package.
8.20am: Halma shares fly as its post record profits and a 45th dividend hike
Halma shares have lifted 6% at the open after it announced another year of record profits and sales, leading it to raise its dividend for the 45th year in a row.
Annual pre-tax profits jumped 10% to £396.4 million for the year to March end, having risen from £361.3 million the year prior.
Sales lifted to around £2.03 billion, with the lift in financials largely being attributed to acquisitions, strong demand across its products and services and outperformance of the safety and environmental & analysis divisions.
Halma's board recommended a 7% increase to its final dividend, bringing it to 13.20p per share. Together with the interim dividend of 8.41p per share, takes the total dividend per share for the year to 21.61p.
Chief executive Marc Ronchetti said: "2024 was another successful year for Halma. We delivered record revenue and profit, with continued high returns. Strong cash generation enabled us to make substantial investments in opportunities for future growth, while maintaining a strong balance sheet.
"We have made a positive start to the new financial year. Our order intake in the year to date is ahead of both revenue and the comparable period last year.
"We expect to deliver good organic constant currency revenue growth in the year ahead, and an adjusted EBIT margin of around 21%, in the middle of our target range."
8.05am: BT gains new high profile investor
Mexican billionaire and Latin America's richest man Carlos Slim revealed he has bought a 3% stake in telecom giant BT Group PLC (LSE:BT.A) (BT Group PLC (LSE:BT.A)) for around £400 million.
A spokesperson at Slim’s Grupo Carso claimed the move was a “financial investment, like many the group makes”.
He joins other high-profile investors of the company including French billionaire Patrick Drahi through his firm Altice, which owns around 24.5%, and Deutsche Telekom, which holds a stake of around 12%, which it paid around £5.6 billion for back in 2015.
In response to Slim's investment, BT said: "We welcome any investor who recognises the long-term value of our business” and “look forward to engaging with Inbursa, just as we do with all investors”.
Slim has previously held the spot as the world's richest man, having built his wealth from an investment in Mexico's state telephone company, with his businesses now accounting for a fifth of the country's leading stock index.
In May, boss Allison Kirkby said the telecoms company had "now reached the inflection point on our long-term strategy".
She said the next phase of BT's transformation will see a sharper focus on customers in the UK, "by accelerating the modernisation of our operations, and by exploring options to optimise our global business," implying further sales of overseas operations are coming.
7.49am: Wise profits triple on higher interest rates
Wise PLC (LSE:WISE), the fintech firm, has become the latest financial services group to benefit from a higher interest rate environment after its profits more than tripled.
Pre-tax profits soared by 228% year-on-year to £481 million for the year to March end, while underlying earnings also more than tripled to reach £241.8 million.
It comes as around £118.5 billion was moved across borders for 12.8 million customers, representing a 29% increase in its user base compare.
However, it was the group’ interest income which really drove profits, having also more than tripled from £140.2 million in 2023 to £485.2 million this year.
“2024 was another strong year of growth for Wise,” said Wise’s co-founder and chief executive Kristo Käärmann.
“We are investing in infrastructure and customer experiences to serve as much of this huge, under-served cross-border payments market as possible, including starting FY25 by reducing fees further for our customers.”
7.20am: FTSE 100 to open lower
The FTSE 100 is on track to open at around 37 points lower at 8,184, sliding back from a strong session on Wednesday which saw the index jump close to 1%.
Overnight in Asia, stocks rallied on the back of the US's cool inflation print and the Federal Reserve's announcement to cut interest rates once this year.
Asia-Pacific’s broadest index, barring Japanese shares, jumped by around 0.9%, while Taiwanese equities rallied 1.7% and Hong Kong's Hang Seng jumped 1%.
Over in the UK, Mexican billionaire and Latin America's richest man Carlos Slim revealed he has bought a 3% stake in telecom giant BT for around £400 million.
A spokesperson at Slim’s Grupo Carso claimed the move was a “financial investment, like many the group makes”.
Later today, attention will turn to Elon Musk and his US$56 billion pay bonus at Tesla, with shareholders set to vote on whether to approve the record package.
Shareholders like Norway's sovereign wealth fund and proxy advisors ISS and Glass Lewis have already said they do not believe Musk deserves the full salary.