- FTSE 100 up 52 points to 8193
- Whitbread top riser, Ashtead biggest loser
- Wind power to overtake gas this year
- Grocery price inflation falls, says Kantar
4.09pm: Hargreaves and financial sector stocks lead rally
As we move into the final half hour of the day, the FTSE 100 is not far off its best levels of the day, up almost 47 points or 0.6% at 8189.
The FTSE 250 mid-cap index meanwhile is romping up 234 points or 1.2% at just over 20,394.
Top of the blue-chip leaderboard is Hargreaves Lansdown PLC (LSE:HL.), up 5.15% after receiving an improved offer from a consortium led by private equity firm CVC. The HL board said it would be willing to recommend this offer, having dismissed a lower bid last month.
The bid has sparked interest in other London-listed financial stocks, including platforms such as IntegraFin (LSE:IHP) up 3.6%, online brokers like CMC Markets PLC, which is up 6.8%, though rival IG Group (LSE:IGG) is only up 1.4%.
Other mid-cap financial sector names are also higher, led by Investec PLC (LSE:INVP) up 7.5%, Ninety One PLC (LSE:N91) 6.1%, Jupiter Fund Management PLC (LSE:JUP) 4.3%, Ashmore Group (LSE:ASHM) PLC 3.3%, Close Brothers 3.1%, with investment trusts like APAX Global Alpha, Patria Private Equity, RIT Capital also up. Blue chips St James's Place and Schroders are both up around 2.2%.
Fallers on the blue-chip index are led by Ashtead, after providing a revenue growth outlook for the coming year that was lower than expected.
Other FTSE 350 fallers include housebuilders Barratt, Persimmon, Taylor Wimpey, Vistry and Crest Nicholson.
3.45pm: Barclays UK cost cutting
Barclays PLC (LSE:BARC) will cut around £100 million of annual costs from its UK corporate banking business by 2026, the bank said.
This is part of the wider £2 billion cost-cutting plans announced in February, which some analysts said could result in 17,000 job losses.
Reuters, which reported the new details, said Barclays UK boss Matt Hammerstein assured that investment would continue to be made in the business to deepen corporate lending relationships.
3.38pm: Rare AIM float given cautiously warm welcome
Earlier today, medical technology AOTI Inc made a low-profile debut on AIM after raising gross proceeds of £19.5 million in a rare initial public offer in London in these past two years.
The shares have climbed 3% today from the 132p placing issue price, which had given it an initial £140 million market valuation.
Based in California, AOTI says it is focused on the "hard to heal" wound care market segment, in particular diabetic foot ulcers (DFUs), venous leg ulcers (VLUs) and pressure ulcers (PUs).
The company said it generated $43.9 million in revenue in 2023 and in the past three years has generated compound annual revenue growth of 38% while being profitable at the adjusted EBITDA level since 2017.
"Following a period of significant investment in the company's market access and commercial infrastructure over the past two financial years, AOTI is now entering its next phase of expansion with the foundations for sustainable growth in place," it said in a statement today.
3.13pm: SEC sues over 'bogus offer' for Virgin Orbit
The US financial markets watchdog has sued a self-proclaimed Texas venture capitalist for making a "bogus offer" to rescue Sir Richard Branson's collapsed launch services company Virgin Orbit.
Virgin Orbit, which launched its spacecraft from under the wings of a modified Boeing 747, received a $200 million offer from Matthew Brown in March last year after it ran out of cash, but later ended talks after questioning the purported investor's credibility.
In court filings, the Securities and Exchange Commission accused Brown of falsely portraying himself as an experienced venture capitalist with investments in "over 13 space companies" when he made the offer for Virgin Orbit.
Brown is accused of using a fabricated screenshot showing $182 million of cash in his company Matthew Brown Cos's bank account, though it contained less than $1.
Brown and his company said the SEC allegations are made up of "egregious errors," "fabrications" and "biased allegations".
2.46pm: Mixed open on Wall Street
US stock markets are mixed at the open after weak retail sales data emerged and brought louder calls for a Fed rate cut.
The Nasdaq Composite index flirted either side of the flat line in early trades, slipping four points lower after the first quarter of an hour.
Both the S&P 500 and Dow Jones indices moved slightly higher, up 0.18% and 0.27% respectively.
The weaker US core retail sales data across the board, with weaker revisions, "will fuel more calls for rate cuts in 2024", says Ryan Brandham, head of global capital markets at Validus Risk Management.
"The Fed will need to be confident that inflation is on path to return to target before heeding these calls," he said.
The FTSE 100 has moved to its highest levels of the day up over 0.6% and close to the 8200 level.
2.17pm: US retail spending down
While all that offer action was going on, US retail sales data landed, looking a little soft.
Retail sales increased 0.1% in May compared to the preceding month, while April’s figure was revised to a 0.2% m/m decline from a flat reading initially.
Motor vehicle sales rebounded 0.8%, helping offset a price-related 2.2% decline in gas station sales, with building material sales also weak amid unseasonably wet weather in the west, and spending down at restaurants and bars.
Michael Pearce at Oxford Economics says: "The modest rise in retail sales in May and the downward revisions to previous months' gains leave real consumer spending on track for a slowdown in Q2."
Following annualised growth of 2% in the first quarter, Pearce says new data points to consumption growth slowing to 1.8% in the second.
"Consumer spending is slowing because real incomes growth is moderating and because some consumers are becoming credit constrained amid elevated interest rates and rising credit card utilization," Pearce said.
"However, with unemployment unlikely to rise much and the state of households balance sheets still looking strong in aggregate, we expect consumer spending growth will remain close to its current pace in the second half of the year."
2.10pm: HL deadline extended
The new deadline for a final offer for Hargreaves Lansdown, which had been due tomorrow, has been extended to 19 July.
HL warns investors that "there can be no certainty that any firm offer will be made for Hargreaves Lansdown, nor as to the terms on which any firm offer might be made."
2pm: Hargreaves receives new offer
Hargreaves Lansdown PLC (LSE:HL.) shares have spiked back up, after the investment and pension platform revealed it has received a new cash offer.
The new offer is priced at 1,140p per share, up £1.55 from the offer rejected last month
This proposal from the consortium made up of private equity companies CVC and Nordic Capital, and the Abu Dhabi Investment Authority, was announced less than an hour after the Sky News story suggested the price would be nearer 1,050p.
The HL board indicated the new bid is "at a value that the board would be willing to recommend unanimously" to shareholders, should a firm offer be made.
1.46pm: Taylor Swift impacting economics again
Eurozone inflation data released this morning suggest that the surprisingly large jump in services inflation may have been due to Taylor Swift.
Package holidays and accommodation services inflation both rose quite sharply in Spain and Portugal where Swift performed on her 'Eras Tour'.
"France also hosted four dates on the Eras tour in May, but the effect there seems to have been smaller, perhaps because the economy is bigger so a small number of concerts has less of an impact on the average level of prices," says Jack Allen-Reynolds at Capital Economics, noting that last year a Beyoncé concert in Sweden also affected economic data.
If the jump in services inflation is due to the impact of the concert, "to some extent, the ECB can 'shake it off'," says Allen-Reynolds, who apologises for his knowledge of the US pop star's songs.
1.20pm: Hargreaves offer to remain a low-baller?
Hargreaves Lansdown PLC (LSE:HL.) shares spiked before falling on news that talks with the consortium of suitors that tabled a fairly low-ball bid almost a month ago do not seem to have come up with a significantly improved bid.
Bosses of the Bristol-based fund supermarket, according to Sky News, is in "detailed talks" with the consortium, which is made up of CVC Capital, Nordic Capital and a subsidiary of Abu Dhabi’s sovereign wealth fund, following the rejection of a 985p-per share offer last month.
Shares in the FTSE 100-listed company, which were trading flat around 1,071p before the news emerged, spiked to above 1,112p but have now dropped and are down more than 2% to 1,048p.
With the put-up-or-shut-up deadline at 5pm tomorrow, the story suggests the deadline may be extended but that discussions about revising the offer higher will incorporate a final dividend of "more than 40p-a-share", which would take the offer to around 1,025p.
12.58pm: Mixed start expected for Wall St
Wall Street is set for a mixed start today after the record closing highs for both the S&P 500 and Nasdaq overnight.
Futures for the tech-laden Nasdaq 100 are trading up 0.14% ahead of the open, with S&P 500 futures flat and those for the Dow Jones down 0.1%.
Stocks are "defying all the odds that a recession may be looming or that the economy may be weakening or that rates could stay higher for longer if the data in the days ahead surprises", says Kenny Polcari, chief market strategist at Slatestone Wealth.
He notes that today we are going to get five more talking Fed heads – Dallas Fed president Lorie Logan, Richmond president Tommy Barkin, Chicago's Austan Goolsbee, St Louis' Berty Musalem and Fed governor Adriana Kugler.
"It’s too chaotic," says Polcari. "If they don’t support the newest narrative, they just cause more chaos in the markets."
12.40pm: HSBC money laundering failure
The Swiss banking arm of HSBC "seriously violated financial market law" and has been temporarily banned from doing business with "politically exposed persons" after breaching money laundering prevention rules.
The Swiss financial regulator, Finma, said HSBC Private Bank failed to carry out adequate checks concerning two "high-risk business relationships" with politically linked individuals over a 13-year period.
Funds originating from a government institution in Lebanon were transferred to an HSBC Switzerland account before flowing back to different accounts in Lebanon.
The transactions were deemed "high risk" and totalled more than $300 million, but "at no time did the bank clarify why a transitory account held with it was used for these transactions," Finma said.
Shares in HSBC Holdings PLC (LSE:HSBA) are little moved on the news.
12.11pm: Wind power to overtake gas this year
Wind power will overtake gas as the main source of electricity in the UK later this year, with the renewable energy having already outperformed the latter in the first four months of the year.
Offshore Energies UK, the trade association, said it expects the trend to continue throughout the rest of the year.
“It is possible wind (onshore and offshore) will be the largest supply source of electricity this year," said the organisation in a new report.
“Wind has provided more supplies than gas in the first four months of the year. This led to the carbon intensity of the UK grid falling to its lowest daily level on April 15, at 19g of CO2 per kilowatt hour.”
In 2023, wind produced 82 terawatt hours of power, while gas generated 96TWh and nuclear created 37TWh.
This year, several wind farms have come into operation, including the world's largest farm Dogger Bank located 75 miles off the Yorkshire coast, helping push wind power generation higher.
Dogger Bank is expected to power electricity for six million home a year through its 277 giant offshore turbines, and is set to push the country's wind output to record highs.
11.47am: Union to protest at Whitbread AGM over job cut confusion
The Unite union is set to protest Whitbread's proposed 1,500 job cuts today at its annual general meeting, with the former claiming the hospitality firm has refused to consult them or answer basic questions about the redundancy protest.
Back in April, the Premier Inn owner said part of an ongoing cost-cutting scheme it would be closing 200 restaurants and axing 1,500 workers.
"Rarely is a company so shameless as to celebrate leaping profits and dividends by announcing mass job cuts. But generating runaway profits while trampling workers is business as usual for Whitbread," said Sharon Graham, general secretary at Unite.
Premier Inn owner Whitbread saw its shares surge more than 2.5% today after it reiterated its guidance and said its German business was close to breaking even.
11.23am: Britain ranks bottom of G7 for private investments
Britain has ranked the worst G7 country for private investment for the third year running, new data from a left-leaning think tank revealed.
During 2022, the UK ranked 28th out of a select 31 countries for investment into the economy by private companies, with only Greece, Luxembourg and Poland behind it, the Institute for Public Policy Research revealed.
In terms of total investment, which includes cash pumped into public, household, non-for-profit and private ventures, Britain has ranked the lowest of the G7 in 24 of the last 30 years.
Economists would need to travel back to 1990 for the last time Britain's total investments matched the average of the G7 countries (Japan, the United States, Germany, France, Italy and Canada).
Ahead of the election, the think tank is urging whichever party gets elected to increase public investments in sectors such as renewables, EVs, education and healthcare.
"If the economy is an engine, then investment is its fuel. The UK’s dire productivity performance is the single biggest driver of our dire living standards," said George Dibb, director of economic research at the IPPR.
"Without resources flowing into new investment, it’s hard to see how UK economic performance can improve."
10.58am: British Airways owner touted for fresh share buyback - analyst
British Airways owner International Consolidated Airlines shares rose 1.5% after it was revealed it could launch a buyback later this year to support a "modest dividend", according to analysts at RBC.
After a meeting with the airline group's chief finance officer, RBC was reassured that full-year underlying earnings estimates of €3.6 billion were in line with trading said to be "positive overall".
IAG also quelled concerns driven by industry rivals after they scaped back summer growth estimates, with management telling RBC there was little read across.
Despite forecasts of a modest reduction in second-quarter sales growth, the Canadian bank is confident it can achieve growth in the full-year.
RBC said: "Unit cost pressures were in line with expectations overall, although with industry-wide maintenance, repair and operation pressures notable.
"Further ahead, there was scope for buybacks to supplement a modest dividend if previously outlined conditions on shareholder returns were satisfied."
RBC keeps its 230p share price target, which represents around a 40% premium to its market value, and rates the stock 'outperform'.
10.16am: Euro stocks rise on inflation data
Eurozone inflation has come in as forecast, giving a boost to European stocks, with all the major indices rising in the past few minutes, lifting France's CAC 40 index out of the red.
The eurozone consumer price index in May was up 2.6% on a year ago, same as the last reading and in line with economists' predictions.
The CPI was up 0.2% month-on-month, also as expected, with core CPI also in line with forecasts.
Germany's ZEW economic sentiment reading was also published, improving less than expected, with the reading of 47.5 up from 47.1 previously but below the 50.0 consensus forecast.
The DAX is up 0.21% now, the CAC 40 is up 0.2% and Spain and Italy's benchmarks are up either side of 0.3%.
The Euro STOXX 50 is up 0.29%.
London's FTSE has also been carried higher, now up 0.4%.
9.56am: European markets mixed
The FTSE 100 is one of the better performing European markets this morning, up 0.4%, while France's CAC 40 started higher but has slipped into the red.
Germany's DAX and Spain's IBEX are just above flat, while Italy's FTSE MIB is up 0.66% and the wider Euro Stoxx 600 is up 0.2%.
Let's hear the thoughts of some market commentators.
Kathleen Brooks at XTB points out that the S&P 500 hit its 30th record high of the year on Monday "and this is driving enthusiasm towards European and Asian shares".
"Tech stocks have driven the US market higher in recent days. The top performers include Broadcom, Apple, Adobe and Oracle, they are all higher by more than 10% in the past five days, Broadcom is higher by nearly 30% after reporting a strong set of earnings earlier this week."
The FTSE 100 is higher on Monday but is lagging its European peers after some mixed corporate results, she notes.
"The FTSE 100 has opened higher after confident trade in New York overnight, and a good showing for Asian equities," says Guy Lawson-Johns at Hargreaves Lansdown.
"Focus will be on eurozone inflation data in the late morning, followed by a reading on the health of the US consumer in the afternoon."
He also highlights firm oil prices, noting that Brent crude has held above $84 per barrel after gaining about 2% yesterday.
"This comes amid an improving global demand outlook and expectations that major oil producers will keep supply tight. On the supply side, key OPEC+ members such as Russia and Iraq reaffirmed their adherence to production quotas. Saudi Arabia also indicated a willingness to adjust output in response to market conditions," says Lawson-Johns.
9.45am: EV startup stops
US electric vehicle startup Fisker Inc (NYSE:FSR) has filed for bankruptcy after failing to complete a rescue deal.
Filings were made overnight after a deal with a large automobile manufacturer fell through in March.
The firm raised concerns over its ability to continue operations in February 2024, having made a loss of $463.6m during the fourth quarter of last year.
The month after it paused production while it sought a rescue deal with a “large auto maker” but trading of the stock was suspended later that month after it told investors a rescue deal had fallen through.
9.37am: Whitbread results 'largely in line'
Whitbread is still topping the FTSE 100 leaderboard, with its shares up 3.7%.
Barclays analyst Vicki Stern says she thinks the first-quarter numbers are "no major event today", adding that they were "largely in line with expectations".
What's more, she said the full-year consensus may be slightly lowered due to softer revenue per available room (revPAR), though this is partly offset by lower costs.
The tone of the outlook was positive, Stern felt.
There's more of a flourish in the comments from Richard Hunter, head of markets at Interactive Investor, who says: "Whitbread may not have fully recovered from the ravages wrought by the pandemic, but progress is continuing apace as the group continues to build on its position as the UK’s largest hotel chain."
He adds: "Challenges inevitably remain, not least of which is the fact that heightened borrowing costs and pressure on disposable customer incomes are real headwinds, both in the UK and Germany. In addition, while the shares are now 44% higher than when Covid first hit, they remain down by 29% to the level just prior to the pandemic. In addition, some of the competitors in the sector benefit from geographical diversification, whereas Whitbread’s footprint is more confined.
"However, a clear recovery from the pandemic is ongoing, with cost inflation and efficiencies adding to the positive mix."
9.15am: Asda in danger of losing third spot as sales keep leaking
Looking at the supermarket numbers earlier, Asda continues to be the worst performer in the sector, with falling sales revealed again.
It is losing market share and putting its place as the UK's third-largest supermarket in danger of being grabbed by discounter Aldi.
Asda, which is mostly owned by private equity group TDR after one of the Issa brothers sold his stake, saw sales tumble 4.0% in the 12 weeks to 9 June, according to Kantar's data.
Its market share fell to 12.8% in the period, down from 13.7% a year ago as its owners apparently are prioritising paying off debt rather than growth.
9.06am: Ashtead outlook 'a little soft'
Shares in Ashtead are now down almost 5% on the back of this morning's fourth-quarter update.
The results are "broadly in line with consensus", says analyst Edward Prest at Liberum.
But Allen Wells at Jefferies notes that PBT for the fourth quarter was circa 5% below the consensus forecast, due to provisioning against a customer bankruptcy, though US rental revenue growth was "stable" at 9% and ex-provisioning results were in line.
The updated 2025 outlook details "look slightly weak", Wells adds, with US rental growth set at 4-7% while the consensus was looking for +8%.
Free cash flow guidance of $1.2 billion is "again looking conservative", says the Jefferies man, adding that he expects the consensus "may drift lower on US rental growth guidance".
Ashtead is the biggest faller in the Footsie, with only 14 blue-chips in the red this morning, with next in line being Smith & Nephew down 0.7%, 3i down 0.6% and Burberry 0.5% lower.
8.55am: Movers and shakers
Some share price movers this morning among the small caps.
XP Power Ltd (LSE:XPP) tanked 19% after Advanced Energy Industries binned its £470 million bid approach.
Analysts at Peel Hunt said it was now "back to basics" for XP, adding: "With the withdrawal of the offer, the speculative attraction diminishes for now."
Surface Transforms (AIM:SCE) is also down 19% after announcing delays to its 2023 audit with the company's final results now expected late this month.
Surveillance systems specialist Synectics has jumped 12% after announcing a $10 million contract to upgrade and expand operations at a major gaming resort in Southeast Asia.
AFC Energy PLC (AIM:AFC, OTC:AFGYF) is up 4% after announcing the successful delivery and operation of its highest-rated power generator to date, as it enters the high-power class of hydrogen fuel cell power plants.
8.28am: Grocery price inflation eases for 16 month in a row
The monthly UK grocery data from Kantar is out, showing price inflation dropped to 2.1% in the four weeks to 9 June, down from 2.4% a month earlier and the sixteenth consecutive monthly drop.
This easing inflation and many rainy days led to the lowest take-home grocery sales growth in two years, which was up 1.0% in value terms in the four-week period.
"The sixth wettest spring on record hasn’t just dampened our spirits leading into summer, it’s made a mark on the grocery sector too as it seems Britons are being put off from popping to the shops," says Kantar's head of retail and consumer insight, Fraser McKevitt, pointing to fewer suncare purchases and more soup sales.
Of the listed supermarkets, Ocado Retail, the joint venture between Ocado Group PLC and Marks and Spencer Group PLC (LSE:MKS) saw strongest growth, with sales up 10.7% in the 12 weeks to 9 June, with Tesco sales up 4.6% and Sainsbury's up 4.9%.
8.13am: FTSE starts strong, led by Whitbread
The FTSE 100 has started well, as predicted, gaining 43 points or 0.5% to 8,185.28 in opening trades.
Premier Inn owner Whitbread has booked an early place at the top of the leaderboard, up 3.1% after reporting solid first-quarter numbers and expressing confidence in achieving its full-year outlook.
Going the other way, Ashtead is down 4% after its fourth-quarter results came in below expectations, with full-year profits down 2%.
7.58am: Shell bags LNG deal in Singapore
Shell PLC (LSE:SHEL, NYSE:SHEL) has agreed to buy liquefied natural gas trading firm Pavilion Energy from Singapore's Temasek for an undisclosed sum, thought to be in the hundreds of millions of dollars.
"The acquisition of Pavilion Energy will strengthen Shell’s leadership position in LNG, bringing material volumes and additional flexibility into our global portfolio," said Zoë Yujnovich, Shell’s integrated gas and upstream director.
"We will acquire Pavilion’s portfolio of LNG offtake and supply contracts, which includes additional access to strategic gas markets in Asia and Europe.
"By integrating these into Shell’s global LNG portfolio, Shell is strongly positioned to deliver value from this transaction while helping to meet the energy security needs of our customers."
7.44am: Mixed start for Whitbread
Premier Inn owner Whitbread PLC (LSE:WTB) reported modest sales growth of 1% for the first quarter of its financial year, helped by improved UK trading and progress in Germany.
Premier Inn UK accommodation sales were flat on last year, slightly ahead of the wider 'midscale and economy' hotel sector, though food and beverage sales down 1%.
In Germany, accommodation sales were up 15% as room growth continued.
The group said it was on track with its £150 million share buyback, with £96 million bought so far.
CEO Dominic Paul said: "Whilst the normal booking pattern means our forward visibility remains limited, our forward booked position is positive and we remain confident in the full year outlook.
"This reflects a more encouraging trading performance in the UK, our strong commercial programme and increased cost efficiencies, as well as good progress in Germany."
7.33am: Ashtead growth slows, profit hit by higher debt payments
Ashtead Group PLC (LSE:AHT) declared a 5% dividend hike after reporting lower revenue growth than expected and a drop in profits for the past 12 months.
The construction equipment group also kept schtum on the subject of a mooted potential move of its main listing from London to New York - though directors will be quizzed on the subject on the call later.
Group revenue increased 12% to $10.9 billion for the year, with rental revenue growing 10% – below the bottom of the 11-13% guidance range that it warned about earlier this year.
Chief executive Brendan Horgan said: "Our end markets in North America remain robust with healthy demand, supported in the US by the increasing proportion of mega projects and the ongoing impact of the legislative acts."
Profits fell 2% as net debt swelled to over $10 billion.
7.12am: FTSE 100 tipped for strong start
The FTSE 100 has been tipped to make gains on Tuesday, which would break a three-day losing streak.
Spread-betters predict the London equity benchmark will start 40 points higher, after it began the week by losing almost five points to close yesterday at 8,142.15.
The mid-cap FTSE 250 did better, ending up 55 points or 0.27% higher at 20,175.47, in positive territory like most of the European benchmarks.
Overnight US stock indices gained confidence as the session wore on, moving from a negative start to a strong finish, led by the tech-heavy Nasdaq, which finished up 0.95%, and S&P 500, which closed 0.77% higher.
Asian markets are mostly in the green this morning, the exception being Hong Kong's Hang Seng. Japan's Nikkei leads the way, bouncing back from start-of-week losses to climb 0.75%.
Back in London the company results diary is a bit more busy than yesterday, with quarterly results from Ashtead and Whitbread among others.
Later we will get Kantar supermarket share and price inflation figures, which a month ago showed grocery price inflation had fallen to the lowest in over two and a half years.