- FTSE 100 down 16 points at 8,147
- French political uncertainty hits bond market
- Tesco to see beer sales soar during Euros
3.58pm: FTSE 100 to close out tough week lower
UK blue chips are on track to close out the week lower, putting the index on track for one of the worst runs since the start of the pandemic.
Concerns in Europe have been growing all week following French President Emmanuel Macron's decision to call a snap election.
Today, the country saw its inflation come in hotter than expected while the premiums on government debt rose to their highest points since 2017.
Analysts at Deutsche Bank warned that the financial turmoil in France echoed that of the Eurozone debt crisis from over a decade earlier.
"To be honest, it’s hard to ignore the parallels between our current situation and the time of the sovereign debt crisis, as there’s that familiar focus on election results, sovereign bond spreads and debt sustainability, coupled with no obvious sign about where things are headed next," said Jim Reid, Deutsche Bank analyst.
Meanwhile, in company news, Tesco jumped close to 2% after its first-quarter results showed that it had made yet more market share gains through volume growth.
Looking forward to the Euros this month, the country's largest supermarket said sales of beer, wine, picnic foods and BBQ essentials were all predicted to rocket.
3.42pm: Germany pushes back on EU import tariffs as Mini faces top-end tax
Germany is attempting to stop or at least reduce the EU import tariffs set to be applied for Chinese electric vehicles.
Officials in the German government are said to be optimistic that the EU can flesh out a solution with China, reports from Bloomberg revealed.
Should a workaround fail to materialise, German carmakers could be exposed to any retaliatory actions by China, with more than a third of their sales coming from the Asian country in 2023.
BMW will be one company hoping a solution is found as its all-electric Mini, which is made in China, could face tariffs of 38.1%, according to reports.
Should BMW be hit with these tariffs it could be terminal for the model's sale prospects.
The joint venture between BMW and China's Great Wall Motor to produce the EV Mini failed to provide a substantial amount of information to the EU for its investigation, therefore meaning the car faces the highest of the tariffs introduced.
3.21pm: Superdry rockets as shareholders approve rescue deal
In the world of small caps, Superdry has soared more than 127% today after it dodged insolvency through a £10 million lifeline from its founder Julian Dunkerton.
Back in April, the group warned it could go bust if it wasn't able to undergo vast restructuring including the reduction of rents with landlords.
Dunkerton is set to inject “a significant amount of his own money” as he underwrites a £10 million equity raise, all of which is part of the company's plans to delist.
Creditors such as lenders Hilco and Bantry Bay as well as landlords approved the plans earlier this week before shareholders voted on the move today.
Peter Sjӧlander, Superdry Chairman, said: “This is a crucial step towards delivering the restructuring of the business and ensuring that Superdry is in the best possible shape to complete its recovery and return to growth.”
Dunkerton added: "I recognise all stakeholders have made deep compromises to enable this turn around, and I will be putting a significant amount of my own money behind this too, to ensure that the business continues to survive over the long term. With the court hearing next week, I continue to look forward to a positive future for Superdry."
2.57pm: Euros to see 20 million extra pints poured
England and Scotland's Euros campaign is expected to generate an additional £93 million for the beer and pub sector, industry research has found.
Some 20 million extra pints are set to be poured over the European Championships, which should help lift the total sales over the four weeks to more than £1.4 billion, the British Beer and Pub Association revealed.
Emma McClarkin, Chief Executive of the BBPA said: “Football fans know that the best place to watch live sport, if you can’t be in the stadium itself, is down the pub.
"With a predicted extra 20 million pints set to be poured during the tournament, worth an extra £93 million in sales, I encourage anyone wanting to watch the football to go to the pub and support their local.”
Earlier today, the BBPA along with companies like Diageo, Wetherspoons, Greene King (LSE:GNK) and Fuller's sent a letter to the Times urging political leaders to rethink beer duty, highlighting that it is one of the highest in Europe.
"It is a stark fact that UK pub goers will be paying the highest beer duty than any of the other competing nations in the Euros, including twelve times more than German and Spanish rates," McClarkin said.
2.39pm: US stocks slide at the open
Wall Street stocks have tumbled at the open, with all three of the main indexes dropping by around 0.4%.
The Dow Jones slipped 163 points to 38,483, while the Nasdaq dropped 51 points to 17,620.
Meanwhile, the S&P 500 fell 18 points to 2,344.
Some of the companies making the biggest moves were Adobe, up around 15%, after it posted better-than-expected earnings and increased its full-year guidance, with the outperformance driven by its investment in artificial intelligence.
High-end retailer RH (NYSE:RH) fell around 15% after suffering a larger loss in the first quarter than analysts had predicted.
Hasbro, the owner of Monopoly and other board games, started the day close to 4% higher after Bank of America brokers upgraded the stock from 'neutral' to 'buy', pointing to its digital gaming strategy as a driving force for improved earnings in the next few years.
2.01pm: Boeing suffers new production problem
Boeing shares are set to open slightly lower after it uncovered a new production problem, this time with its 787 Dreamliner jets.
Hundreds of fasteners have been incorrectly installed on the fuselages of some undelivered jets, a report in Reuters said quoting unnamed sources.
According to the report, the fasteners were not tightened or 'torqued' correctly, with the plane maker assessing the issue to see what, if any, action needs to be taken.
"Our 787 team is checking fasteners in the side-of-body area of some undelivered 787 Dreamliner aeroplanes to ensure they meet our engineering specifications. The in-service fleet can continue to safely operate," a spokesperson told Reuters.
1.31pm: Wall Street to fall at open
US stocks are on course to slide backwards from Thursday's close which saw the S&P 500 and Nasdaq finish at another record high.
All three lead indexes are set to open down, with the Dow Jones forecast to drop 225 points, the Nasdaq predicted to shed 22 points and the S&P 500 to fall by 18 points.
Political uncertainty in Europe, and in particular France, is appearing to hurt markets across the globe, despite the prospects of interest rate cuts getting rosier.
“Monetary policy is easing on a net basis globally, but the process isn’t going to happen rapidly enough to offset rising earnings headwinds tied to an environment of cooling nominal growth,” Adam Crisafulli of Vital Knowledge said.
On Thursday, the S&P 500 was able to post its fourth consecutive close at a record high, while the Nasdaq has also been breaking its records this week.
1.20pm: Bridgerton boosts UK economy and thousands of businesses, says Netflix
Shonda RH (NYSE:RH)imes, the US TV producer, has said her hit show Bridgerton has boosted the UK's economy by £275 million throughout its three-season lifespan.
Netflix claims that Bridgerton has helped support some 5,000 businesses over the past five years.
RH (NYSE:RH)imes, the creator of the period drama and boss of the production company Shondaland, was at the London Stock Exchange this morning to open the session.
At the LSE building, she said: "The Bridgerton universe occupies a special space in culture, resonating with young and old alike.
"The shows have also had a seismic impact on the UK economy, boosting it by a quarter of a billion pounds over the last five years and supporting thousands of jobs and businesses.
“It is clear that the business of art and culture can make a huge economic contribution to local communities. I could not be prouder.”
LSE boss Julia Hoggett said he was “thrilled to celebrate the significant economic and cultural impact” of the industry in the UK.
1.03pm: Staff on six-figure salaries at TfL soars by 72%
Over 1,300 workers at Transport for London took home more than £100,000 last year, reports have revealed.
With the government agency having dished out two years of bonuses in the last twelve months, a total of 1,319 workers were paid a six-figure salary, marking a 72% rise compared to the prior year's 766 employees.
Bonuses at TfL had been placed on pause to allow the transport organisation to achieve "financial stability" during difficult periods during the pandemic.
This week, Mayor Sadiq Khan hailed the group's "remarkable achievement" of closing out the 2024 financial year with a surplus of £138 million.
The extra cash is expected to go back into the running of the TfL, but the government is still required to help fund larger projects such as the upgrading of Picadilly Station or extending the DLR in south-east London.
12.43pm: Barratt deal with Redrow faces competition probe
While Crest Nicholson shares have rallied from a rejected bid to consolidate the housebuilding industry, another deal in the industry is facing scrutiny from regulators.
Barratt Developments' proposed £2.5 billion merger with rival housebuilder Redrow is set to undergo an official competition inquiry after the regulator the CMA widened its initial probe.
Inviting comments from interested parties, the CMA said it would consider whether the deal announced in February would hurt competition.
Combined the two firms would build about 23,000 homes a year and make more than £7bn in revenue.
Barratt said: “We are confident that the combination of Barratt and Redrow is in the best interests of customers and will accelerate the delivery of the homes this country needs."
The watchdog said it will report its findings by August 8.
12.18pm: Supermarkets to see alcohol and food sales soar during Euros
Tesco has said it expects to benefit from a surge in sales over the summer with the Euos kicking off tonight.
Sales of beer, wine, picnic foods and BBQ essentials are expected to lift during the football tournament.
Some 33 million crates of beer and 9 million packs of sausages have already been purchased in preparation of the Germany vs Scotland game tonight, according to industry figures.
“Scotland’s game against Germany his evening kicks off a great summer of sport," said Ken Murphy, Tesco's boss.
The supermarket will also be offering free blood pressure checks to fans who find the tournament that bit too stressful.
Meanwhile, Asda said it estimates 14 million units of Budweiser will be sold, while expecting to flog over 25,000 large-screen UHD TVs.
M&S said customers were buying fice time more Belgian beer than British, while sales of nibbles were up 15% ahead of the first kick-off.
Shares in the UK's largest supermarket jumped close to 3% today after it reported more market share gains driven by volume growth in its food sales.
11.46am: French financial turmoil echoes eurozone debt crisis, says Deutsche Bank
As France's bond market continues to take the brunt of the fallout from Macron's snap election, analysts are seeing similar signs to that of the eurozone debt crisis from more than a decade before.
Premiums paid on French government debt when compared to Germany are on track for their biggest weekly rise in around 13 years, back when countries like Greece, Portugal and Spain were unable to pay off their borrowings without being bailed out.
"To put the current moves in some perspective, the Franco-German 10yr spread has now risen by 21.7bps since the start of the week, and even if it’s unchanged today, that would be the biggest weekly jump in the spread since the height of the sovereign debt crisis in late-2011," said Deutsche Bank analyst Jim Reid.
It comes after the yield on government bonds rose to its highest level since 2017 this morning, with the gap between French and German 10-year premiums rising by as much as 77 basis points before undergoing a slight recovery.
Reid added: "To be honest, it’s hard to ignore the parallels between our current situation and the time of the sovereign debt crisis, as there’s that familiar focus on election results, sovereign bond spreads and debt sustainability, coupled with no obvious sign about where things are headed next."
11.24am: FTSE 100 on track for worst streak since pandemic start
The FTSE 100 has slumped by 41 points this morning, with the index having dropped around 15 points in the last 30 minutes.
Blue chips are continuing to come under pressure as uncertainty grows surrounding the outlook for interest rates and the political landscape in Europe.
Following today's performance, the FTSE 100 is now on track to register its longest weekly losing streak since the start of the pandemic back in March 2020.
Falling week-on-week by around 1.5%, the lead index is on track for five consecutive weeks of declines, making it seem all that much longer ago when the FTSE 100 was consistently smashing record highs.
Yet, not all investors are put off by the losing streak.
"Yes, we’ve seen several days of choppy trading on the markets but a robust session on Wall Street last night and resilience on the FTSE 100 at the end of the trading week doesn’t portray a picture of an investor with their head in their hands,” said Russ Mould at AJ Bell.
11.08am: Crest Nicholson rallies as LSE "gets a wiggle on"
Over in the FTSE 250, Crest Nicholson is leading the index's top risers after its shares jumped more than 8% after it was revealed it had rejected a takeover offer from rival Bellway.
Shares lifted to 230p on Friday, moving closer to the 253p offer made by its Newcastle-based peer, but not completely offsetting the 11% slide it suffered post-results on Thursday.
Crest Nicholson is one of over 30 companies listed in the UK which have recieved a bid in 2024.
Russ Mould at AJ Bell believes recent merger and acquisition activity may be one reason why the LSE is "finally getting a bit of a wiggle on" as he pointed to the FTSE 100 hitting new record highs this year.
He noted how the average bid premium on offers had slipped back in 2024 from last year's 51% to 48%, but remained ahead of the 34% average seen in 2022.
10.40am: Raspberry Pi (LSE:RPI) rallies on first day of full trading
Raspberry Pi (LSE:RPI) shares made a strong stock market debut this morning as full trading began in London, with the share rising further.
Changing hands at around 478p the newly listed DIY-PC firm was marked up around 15%.
It comes after the company's shares jumped more than 40% in conditional dealing on Wednesday.
IPO shares were orignally priced at 280p earlier this week, which saw the offer generate £166 million of proceeds – of which £31 million was new capital – and had valued the company at £541 million.
The success of the float is being taken as a resounding endorsement of the market in London, which has in recent times struggled for new listings.
10.03am: England and Scotland fans to pay highest duty on pints during Euros
At 8.00 pm tonight the Euros will get underway as hosts Germany take on Scotland, but those watching from the UK while sipping a pint may be paying more duty on their beer than other countries.
That's because Britain charges four times more on duty than the European average and a dozen times more than Germany, reports from the Times revealed.
Scottish punters will have to pay 54.2p in duty, significantly more than the 4.6p paid in the host country, while England fans, who face the same 54.2p surcharge, will be paying more than fans of its first opponent Serbia, which add on an extra 12.7p.
Leading industry body the British Beer and Pub Association said it was writing to the country's top politicians in a bid to receive "fair recognition" of the industry's value.
“[It is] imperative that the next government provides a sustainable and proportionate fiscal and regulatory framework," the BBPA said.
Beer duty rates have been frozen at the same level since 2020 due to government plans to support the industry through the pandemic and cost-of-living crisis and are set to stay the same until February 2025.
The BBPA hopes once the freeze is lifted the government will start to lower duty, bringing it closer to the European norm.
In the letter, the organisation also calls for a reduction in business rates and the scrapping of VAT on non-alcoholic drinks and food.
Bosses at Greene King (LSE:GNK), Fuller's, Stonegate, St Austell Brewery and other pub groups have all signed the letter.
9.38am: Adobe rallies as AI integration drives earnings beat
Over in the US, Adobe shares have rallied 15% in after-hours trading following better-than-expected earnings and revenue and an increase to its full-year guidance driven by its investment in artificial intelligence.
David Wadhwani, president of Adobe’s Digital Media business, said he had been pleased with the adoption of AI functionality within products such as the best-selling Creative Cloud along with early monetisation of innovations.
For the fiscal second quarter ending May 31, Adobe posted adjusted earnings per share of $4.48, above the expected $4.39, and revenue of $5.31 billion, surpassing the anticipated $5.29 billion. This represented a 10% year-over-year revenue increase.
For the fiscal third quarter, Adobe anticipates adjusted earnings per share between $4.50 and $4.55 and revenue between $5.33 billion and $5.38 billion.
9.14am: Tesco shares pop as analysts praise 'exceptional' performance
Tesco shares have jumped more than 2% on the back of its first-quarter results, making it one of the FTSE 100's top risers today.
Markets welcomed the group's ability to post another quarter of market share gains, helped by rising volumes, a focus on value and better-than-expected sales growth in Ireland.
"Tesco has done exceptionally well to grow market share given rising competition," said Sophie Lund Yates at Hargreaves Lansdown.
She argued that its "enormous scale means it operates more like a utility" which is underpinned by a "reasonably generous dividend yield, too".
"Moving forwards, investors will want to see further growth kicked out from wholesaler Booker – as well as a clearer understanding on what the next chapter looks like for food,” the lead equity analyst added.
Richard Hunter at Interactive Investor hailed the group's "unassailable position as the largest UK grocer" and added today's results were made that bit more impressive as it is growing "progressively difficult for Tesco to exceed expectations."
"Even so, the group is showing few signs of fatigue as its presence weighs heavily on competitors as it continues to hone its focus on value, quality and service," he said.
Meanwhile, analysts at Shore Capital have rated the stock a 'buy', arguing it is now a "consummate cash compounder, with admiration and growing respect."
8.48am: France at risk of financial crisis as inflation accelerates
Concerns over how the instability in France's political scene will cause economic turbulence have been raised this morning amid fears of a financial crisis in the country.
French inflation rose by more than expected in May, figures today revealed, with prices lifting by 2.3% compared to 2.2% in April.
Analysts had expected the rate to remain the same as April's figure, but say the increase was driven by gains in food and energy prices.
Meanwhile, France's economic and finance minister warned that the turbulence created by Macron's bet on a snap election could cause a financial crisis.
Bruno Le Maire highlighted fears regarding the premium France pays on its government bonds when compared with Germany, after yields lifted to their highest point in around seven years.
France's lead index the Cac40 is also suffering from political uncertainty, having undergone its worst session yesterday since July last year.
This morning, French blue-chips continued on the downward trajectory, with the Cac40 dropping by more than 0.8%.
8.27am: FTSE starts off flat
London's blue-chip index has kicked Friday off flat, failing to experience much of the AI rally which has pushed US indexes to record highs over the last few days.
Overnight in the US, Elon Musk had his US$56 billion pay package approved by Tesla shareholders at its AGM, marking the biggest bonus of its kind in history.
Shares in Tesla closed the session close to 3% higher and have kept flat in pre-market trading, but still remain down over 26% for the year.
Meanwhile, in the UK, FTSE 250 housebuilder Bellway revealed it had an offer for fellow industry rival Crest Nicholson rejected last month.
The deal valued Crest Nicholson at around £650 million, or 253p per share, but management believed it "significantly undervalued" the company and its future prospects.
Finally, Tesco has hailed food sale growth, driven by rises in fresh produce volumes, as a key aspect in extending its leading market share position further.
The country's largest supermarket increased its market share by 59 basis points to 27.6%, helped by growth in all its channels including food sales which rose by 5.1% year-on-year.
8.06am: Tesco flexes market share gains and volume growth despite flagging wholesale business
Tesco said it underwent a fourth consecutive quarter of market share gains in the first three months of the financial year, helped by growing volumes, despite mixed sales in the period.
The country's largest supermarket increased its market share by 59 basis points to 27.6%, helped by growth in all its channels including food sales which rose by 5.1% year-on-year and was helped by "strong volume growth" in fresh food.
Meanwhile, sales across the group's entire retail operation increased by 3.4% on a like-for-like basis to £15.3 billion, helped by a better-than-expected performance in the Republic of Ireland.
Irish sales lifted 4.4% in the three months to £731 million, beating out analyst guidance which forecast a 2.5% to 3.5% rise.
Meanwhile, UK sales growth came in slightly under the consensus of 5% -6% at 4.6%, having posted £11.3 billion in revenues.
Central Europe sales lifted by 0.6% to £975 million, which was in line with estimates, while Booker, the group's wholesale business, experienced a surprise 1.3% drop to £2.23 billion.
Analysts at Shore Capital had forecast growth of between 3% and 4%, having labelled the business a “highly successful wholesale business”,with a “market-leading position in the UK.”
Tesco said Booker's poor performance was led by declines in the tobacco market, weakness in its fast-food section serviced by Best Food Logistics and tough comparatives from the year before.
Looking forward, the grocer expects adjusted operating profits of £2.8 billion for the financial year, generating free cash flow within its guidance range of £1.4 billion and £1.8 billion.
"We continue to be the cheapest full-line grocer and are the most competitive we've ever been, with our value, product quality and service driving better brand perception and customer satisfaction," boss Ken Murphy said.
"Our market share reflects this, growing more than at any other time in the past two years.
"Following another strong quarter, we're pleased to reiterate our guidance for the full year, with sales trends in line with our expectations and the business well-positioned for the months ahead."
7.40am: Crest Nicholson rejects takeover offer from Bellway
Housebuilder Bellway has closed out the week confirming press speculation that it made an offer for Crest Nicholson, the fellow home construction company whose shares sunk more than 11% yesterday on the back of poor results.
Bellway said it made an offer on May 7 but Crest Nicholson's board rejected it.
Under the terms of the offer, Bellway had promised to give Crest Nicholson shareholders 0.093 shares in the former for every share owned in the latter, representing an implied value of 253p per CN share.
Had the deal been approved, Crest Nicholson shareholders would have held 17.1% of the entire Bellway share capital, with the offer for each share representing a 30% premium at the time when it was made and a 20.5% premium to the Chertsey firm's three-month average of 210p.
Shares closed on Thursday at just under 213p.
Bellway's board justified the move by claiming it would create significant synergies, strengthen each business, reduce both risk profiles and lead to lower indebtedness.
Crest Nicholson's board said after deliberating on the offer, they "concluded that it significantly undervalued Crest Nicholson and its future standalone prospects and was not in the best interests of Crest Nicholson's shareholders."
"Crest Nicholson remains confident in its standalone prospects, in particular... the review of provisions for completed development sites supported by external consultants, its highly attractive land portfolio and the new leadership of Martyn Clark," a statement said.
7.21am: Blue chips to start day in the green
London's FTSE 100 is on track to open higher at around 8,195 up by close to 40 points on Friday, futures revealed, with stocks looking to close the week in the green.
Overnight, Japanese shares outperformed weaker Asian markets, with the yen slipping lower after the Bank of Japan revealed it would be cutting down its bond purchases in the future, surprising some traders who believed the central bank would have started earlier.
Japan's Nikkei lifted by around 0.7%, while the yen dropped to its lowest in close to two months at US$157.98 per dollar.
Meanwhile, in the US, Elon Musk won his Tesla vote allowing him to receive a US$56 billion bonus, the biggest compensation package in history.
“I just want to start off by saying, hot damn, I love you guys!” Musk said while on stage at the EV maker's AGM.
Over in the UK, attention will be turning the country's largest supermarket Tesco as it reports first-quarter results where disinflation, market share gains and a successful wholesale business could all feature.
Sales during the first three months of the financial year are expected to lift by between 5-6% in the UK, by 2.5-3.5% in Ireland and by 0-1% in central Europe, according to Shore Capital’s veteran retail analyst Clive Black.