- FTSE 100 down 29 points at 8,252
- Cruise operator Carnival rallies on profit raise
- Airbus warning sends Rolls and Melrose lower
4.00pm: FTSE 100 to close lower
London blue chips are on track to close around 30 points lower after warnings of a potential eurozone debt crisis hit sentiment and an Airbus profit downgrade hampered aerospace stocks.
Airbus cut profit forecasts amid a shortage of parts for its A320neo jets, causing engine maker Rolls-Royce to tumble 2%, while manufacturer Melrose slid 1.5%.
Europe's largest aerospace company said deliveries would be lower, due to the delay in the production of the new jets.
Shares in the French-listed Airbus sunk more than 9.5% in reaction to the unscheduled update.
Meanwhile, the cruise industry has flexed signs of strength after Carnival and Saga both pointed to increased demand in their results.
Carnival shares shot up more than 7.5% as it hiked profit guidance on the back of robust demand for its cruise holidays in places such as Alaska and the Caribbean.
Meanwhile, Saga said its cruise division had an “exceptional” start to the financial year, with ship booked load factor up 83% and 78% for ocean and river routes.
3.45pm: Commodities and currencies today
As the FTSE 100 moves towards the close, here's a look at how commodities and currencies have done today:
- Bitcoin/USD: +2.6% at $61,827
- GDP/USD: flat at $1.26
- GDP/EUR: +0.3% at €1.18
- EURO/USD: -0.3% at $1.06
- Brent Crude: -0.25% at $85.80
- WTI Crude: -0.1% at $81.53
- Gold: -0.3% at $2,324
- Silver: -1.1% at $29.2
3.31pm: Carnival rallies as strong demand boosts profits
Carnival PLC (LSE:CCL), the owner of cruise companies such as P&O, has rallied close to 6.5% this afternoon after it upgraded its full-year profit guidance.
Helped by robust demand for its cruise holidays in places such as Alaska and the Caribbean and higher prices for its journeys, the group lifted its adjusted net income guidance by around US$275 million and its net yield guidance to 10.25%.
It means the cruise group now expects 2024 adjusted profit per share of US$1.15, improving on forecasts of US$0.98 per share.
Third-quarter earnings per share are predicted to rise to US$1.15, ahead of Wall Street estimates of US$1.10.
It comes as the group reported record second-quarter revenues of $5.8 billion, helping pave the way for a record quarterly operating income of US$560 million and underlying earnings of US$1.2 billion.
"We have made incredible strides in improving our commercial operations, strategically reallocating our portfolio composition and formulating growth plans, while strengthening even further our global team, the best in the business," said chief executive Josh Weinstein.
"Off the back of that effort, we closed yet another quarter delivering records, this time across revenues, operating income, customer deposits and booking levels, exceeding our guidance on every measure."
2.58pm: Tories withdraw support for betting scandal candidates
London stocks are holding slightly lower as the market nears Tuesday's close, with the effects of Airbus's profit warning being felt by Rolls-Royce, down 4%.
The market's subdued sentiment has been amplified by the ongoing election campaign, with companies appearing to be waiting until after the vote before issuing news.
Yet, it appears there is little quiet on the campaign trail for Tories and Labour, with the former currently embroiled in a betting scandal.
Both Craig Williams and Laura Saunders, two Conservative candidates, have had their support pulled by the party after a probe was launched into allegations of betting on the date of the election.
The two will remain on the ballot as Tory but will become independent if elected.
Scotland Yard was accused of leaking the identities of the two, with reports indicating a further five police officers are also under investigation by the Gambling Commission.
2.38pm: Wall Street gets off to mixed start
US stocks have opened mixed today, with the Nasdaq recovering after a tough Monday, while the other main indexes kept relatively flat.
The Nasdaq was up around 0.5% at the start of trading, while the S&P 500 lifted 0.15%.
Meanwhile, the Dow Jones has stumbled at the open, dropping around 0.15%.
While Nvidia has bounced 2.5% after a 6% drop on Monday, other companies making moves included Solaredge Technologies, which slumped 18% after launching a new US$300 million debt offering for notes which mature in 2029.
Pool Corp (NASDAQ:POOL), the wholesale pool supply seller, plunged close to 10% after it warned its full-year results would be lower than the market and management had forecast.
2.26pm: Bitcoin recovers after six-week low
Bitcoin fell to a six-week low at the start of the week, dropping below the $60,000 mark overnight for the first time since early May.
Today, the king cryptocurrency rebounded 1.5% to $61,176.
Some investors seemed worried about the effects of the defunct bitcoin exchange Mt Gox starting to distribute bitcoin repayments from next month.
Neil Roarty, analyst at Stocklytics, noted that some bears were arguing there had been "a fundamental shift in both market and mood", with BTC no longer appearing to track the Nasdaq after it soared to record highs last week.
"At the same time, rumours swirl that whales - including some of the biggest miners and even the German government - are offloading their holdings," Roarty said.
1.39pm: Wall Street mixed ahead of open
US stocks are mixed in premarket trading, with the Nasdaq looking to rise at the open following its worst session since April.
Tech giant Nvidia saw its shares drop more than 6% yesterday, pushing the Nasdaq lower and marking its worst daily drop since April 19.
Shares of the AI chipmaker are on track to lift 2.5%, while the Nasdaq is positioned to open 0.3%.
Now debates are growing amongst analysts over whether Nvidia's drop was a sign of worse things to come or a correction in its valuation amid profit taking from shareholders.
David Morrison at Trade Nation said: "In some ways, this makes for a pleasant diversion away from the incessant speculation over when the Federal Reserve will make its first rate cut.
"But this remains the overriding issue in considering how much more upside there may be in the US stock market before we see some kind of correction.
"Bear in mind, it was only a few days ago when the S&P crossed above 5,500 while the NASDAQ 100 broke above 20,000, both for the first time.
"There’s only been a modest pull-back since then, and markets are now waiting for the next catalyst for a significant move."
1.25pm: Music labels sue AI startups
Universal Music Group (EURONEXT:UMG), Sony Music and Warner Records have sued artificial intelligence-power music generation startups for infringing copyright of various recording artists.
The Recording Industry Association of America said overnight that two lawsuits had been filed against AI companies Suno and Udio for copying and exploiting recorded music without permission.
Compensation of $150,000 per infringement has been demanded.
Both lawsuits contain a common set of core allegations regarding the training, development, and operation of Suno and Udio.
It was noted that on social media, members of the public have observed that even less targeted prompts can generate songs on Suno that "resemble specific recording artists."
1.04pm: Morrisons sees sales boost from Aldi and Lidl price match scheme
Morrisons is putting pressure on discounters like Aldi and Lidl after it posted another rise in sales during its most recent quarter.
Sales on a like-for-like basis surged 4.10%, when excluding fuel and VAT, during the three months ending April 28.
The growth was helped by the Aldi and Lidl Price Match scheme launched in February, which management said has gotten off to a “great start”.
It marks a slight slowdown from the 4.6% rise experienced in the quarter.
The private-equity-owned supermarket was also able to reduce its debt levels to £4.00 billion from a peak of £6.20 billion.
Morrisons has been under pressure from its German rivals, with Lidl closing in on its spot as the UK's fifth-largest supermarket, research from Kantar found.
12.43pm: UK's largest winemaker places itself on sale months after floating on AIM
English winemaker Chapel Down is putting itself up for sale just seven months after floating on London's AIM.
Even though the largest wine producer in the UK, is profitable and growing, the board wants to look at options to fund investment in new vineyards and a new purpose-built winery.
Analyst Russ Mould at AJ Bell said: "Coming so soon after moving from the Aquis stock exchange to AIM, one might think something negative is afoot.
"Yet it makes sense to have raised the company’s profile by switching exchanges ahead of putting the ‘for sale’ flag up."
"Plenty of big drinks companies would be in the market for a niche player like Chapel Down as it could add something new for them to get their teeth into, and also as a way of cross-selling products."
12.21pm: Tortilla buys largest European competitor
The FTSE 100 has started to edge lower into lunchtime as concerns regarding Airbus and a French debt crisis are felt on this side of the Channel.
However, in small caps, food retailer Tortilla Mexican Grill has surged 3.5% after it revealed it has bought its largest European rival Fres Burritos for €3.95 million.
Fresh Burrito is the largest Mexican restaurant in France and the second largest in Europe, behind only Tortilla.
Today's acquisition is part of the AIM-listed group's growth strategy, which aims to bolster the brand across the globe while doubling-down on franchises.
As part of the deal, Tortilla will acquire 13 company-owned restaurants and the rights to 19 franchised sites, while leading to the creation of a new European sub-board committee.
Andy Naylor, chief executive of Tortilla, said: “Tortilla's international ambitions are no secret, and acquiring Fresh Burritos is our gateway to mainland Europe. With Mexican cuisine surging in popularity, these prime French locations give us a solid launchpad. We're set to leverage this acquisition, just in time for the Paris Olympics.
"The brand synergies are clear, a new central kitchen is in the works, and our dedicated team is raring to go. We're primed for sustainable growth abroad.”
11.59am: France needs to alleviate fears of eurozone debt crisis, says Allianz
France is expected to face continual rises in the cost of borrowing unless its leaders can convince the markets its country's finances are in order, Allianz, the insurance firm, warned.
Fears the nation is on the cusp of triggering a Eurozone debt crisis have been growing since President Macron announced a snap election earlier this month.
The premium paid on government bonds in France compared to Germany reached its largest gap since the depths of the last Eurozone debt crisis in 2009 and 2010 when countries like Greece, Portugal and Spain could not finance government bonds.
Gregor Hirt at Allianz Global Investors said: “Any reminder of the European sovereign debt crisis is a red flag for many international investors.
“We need some action from the French government, some stabilisation, so these large investors are reassured.”
11.38am: Airbus cuts forecasts; Rolls and Melrose tumble
Both Rolls Royce and Melrose are leading the FTSE 100 fallers today, down around 4%, after its key client Airbus cut profit forecasts amid a shortage of parts for its A320neo jets.
Europe's largest aerospace company said deliveries would be lower, due to the delay in the production of the new jets.
A €900 million write-down also occurred in its troubled space division, with bosses claiming a review is leading it to rethink its operations in the channel.
Shares in the French-listed Airbus sunk more than 11% in reaction to the unscheduled update.
It now predicts underlying operating income will reach €5.5 billion for the year, down from earlier forecasts of between €6.5 billion and €7 billion.
Delivery estimates were tweaked, with 770 aircrafts set to be delivered, down from 800, while the target to produce a A320neo jet every month has been moved backwards from 2026 to 2027.
Airbus chief executive, Guillaume Faury, said: “We are facing headwinds right now; we have to bite the bullet.”
11.13am: Vauxhall owner threatens to quit production in UK
Vauxhall and Citroen owner Stellantis has warned it could stop making vans in the UK due to the government's targets for EVs.
UK boss Maria Grazia Davino claimed the sales mandates for zero-emission vehicles "could be very damaging" for its operations.
“You have to make strategies that are based on efficiency. I want to keep the production [in the] UK and I want to be clear on this,” she said.
"But, if this market becomes hostile for us we will enter an evaluation of producing elsewhere."
Stellantis has invested in its sites in Luton and Ellesmere Port, with the latter an EV-only factory used to make small electric vans.
10.52am: Land Securities fails to impress after shopping centre deal
As the FTSE 100 continues to hold flat, also holding flat is commercial property giant Land Securities despite it revealing it upped its stake in Kent's Bluewater Shopping Centre.
Land Securities now owns 66.25% of the site after its £120 million investment for an additional 17.5%.
The deal will boost Landsec's net rental income by £10.3 million annually.
"This transaction underscores our ability to continue to create value through prime investments in scarce, major retail destinations with attractive return profiles," said Bruce Findlay, head of retail at Landsec.
"Bluewater is one of the UK's top retail destinations and a key part of our strategy to further build our relationships with key brands.
10.23am: Takeaway sales rally in May, but will a warm summer pose a threat?
Both Deliveroo and Just Eat have traded close to 1.5% lower this morning after industry research indicated that hot weather over summer could dent takeaway sales.
It comes after a cool and damp May paved the way for an 11.3% jump in food deliveries year-on-year, with consumers opting to stay at home, the CGA research found.
Takeaway and click-and-collect sales dropped by 2%, highlighting that Brits showed a preference for the convenience of delivery platforms.
With warm weather forecast for the rest of June and parts of July, this combined with the Euros could lead to an upswing in people eating and drinking out.
However, Karl Chessell at CGA believes the positive trend could be a sign of household spending improving.
He said: "The easing of inflation and interest in the Euro 2024 football tournament should help to sustain momentum into the summer, and we can be cautiously optimistic for solid growth in both deliveries and eat-in sales over the rest of the year.”
10.02am: Ocado shares tumble on broker downgrade
After its recent relegation from the FTSE 100 to the 250, Ocado has started the day as the index's biggest faller after it dropped more than 4%.
It comes after Morgan Stanley (NYSE:MS) downgraded the retail stock, cutting its price target from 345p to 215p, which now represents around a 30% discount to its current market value.
Morgan Stanley (NYSE:MS) said the downgrade was based on Sobey's, the Canadian supermarket chain, axing its partnership with the firm, leading to the broker fearing it could erode the development and launch of other projects.
Kathleen Brooks at XTB said: "This is a damning verdict, as it plants the seed of doubt that Ocado’s top team can deliver on its strategic plan, which is why the stock is selling off so sharply.
"The stock price is down 14% in the past 5 days and is lower by 12% in the past month. Year to date, Ocado shares have lost more than 60% and it is the worst performer on the FTSE 250 in that time.
"A recovery in this stock is a big task since sentiment is firmly rooted to the downside as Tuesday’s analyst downgrade shows."
9.42am: Minimum wage gap to middle class closes to smallest in 50 years
April's minimum wage increase has meant low earners have shrunk the gap to the middle class to its lowest level ever recorded, new research revealed.
Hourly salaries between those on the lowest pay and workers in the middle are the narrowest since the mid-1970s when records began, the Resolution Foundation found.
Rises to the minimum wage have meant the typical worker only makes 1.5 times more than the lowest 10% of UK employees.
Economists would have to look back to the mid-90s to find the largest discrepancy between the low-paid and middle class when the latter recieved 1.8 times that of the former.
National Living Wage was hiked by 9.8% to £11.44 an hour in April in a bid to help households deal with the inflationary pressures over the last few years.
9.22am: Nvidia sheds £430 billion overnight
While stocks in the UK are holding flat this morning, over in the US last night, AI darling Nvidia took a hammering losing more than £430 billion in a single session.
Shares dropped close to 7% to US$118 and are expected to fall further when Wall Street opens this afternoon.
Richard Hunter at Interactive Investor said: "While it is far too early to call an end to the current run, such minor corrections are generally seen as healthy, while the expected downward direction of travel for interest rates provides a comforting backdrop as companies more broadly are comfortable to borrow to grow their businesses."
NVIDIA last Tuesday surged to a record high of about $135 per share and briefly overtook Microsoft as the world’s most valuable company with a market capitalization of about $3.4 trillion.
XTB research director Kathleen Brooks added: "After such a strong run in the first half of this year, its stock price is higher by 150% since January, it is no wonder that retail traders and speculators are taking profits."
8.56am: AstraZeneca's Imfinzi still has options, broker believes
AstraZeneca shares have held flat this morning despite its lung cancer immunotherapy Imfinzi having failed to hit its primary endpoint of disease-free survival compared to the placebo.
"Whilst this result is disappointing, we highlight there still remains a raft of separate studies ongoing that are also looking move Imfinzi into earlier treatment lines of lung cancer," said Sean Conroy at Shore Capital.
"Imfinzi has increasingly become an important driver of growth over recent quarters, supported by launches into new indications.
"With c.85% the FY27F consensus forecasts for Imfinzi already attributable to its use for lung cancer, we continue to view the opportunities outside of lung cancer as more important sources of near- to medium-term upgrades."
Shore Capital has maintained its buy recommendation for the pharma giant and is hopeful it can upgrade forecasts when Astra posts its second-quarter results at the end of July.
8.37am: Morning so far
London stocks have failed to make any movements this morning as the lack of company or macroeconomic updates added to the ongoing election campaign leaves the markets in a state of purgatory.
Saga shares edged higher after it reported further strong trading for its ocean cruise business despite warning that the insurance market remains “challenging”.
Overall, the provider of services to the over-50s said, trading was in line with expectations, with ocean and river cruises both having seen load factors increase by 83% and 78% respectively compared to last year.
Shein is closing in on its eagerly-awaited London IPO after reports revealed it filed papers with UK market regulators earlier this month.
A listing is expected to take place later this year.
Meanwhile, AstraZeneca shares have shrugged off disappointing news on an advanced lung cancer trial of its Imfinzi immunotherapy.
Phase III trials showed the drug did not achieve statistical significance for its primary endpoint of disease-free survival compared to placebo in early-stage non-small cell lung cancer.
8.19am: FTSE flat at the open
The FTSE 100 has opened 11 points higher at 8,293, continuing the upward momentum from yesterday, but failing to launch a significant rally due to the lack of company updates.
However, while business updates have been quiet, car dealership network Vertu Motors (AIM:VTU) has provided some insight into the new and used car market.
New vehicle volumes increased by 6.8%, but margins fell, highlighting the use of discounting, with the soft pricing providing another indication inflation is easing.
"Used vehicle volumes also grew strongly, with prices remaining stable. The Group also noted that regulatory support for electric vehicles may lead to the strengthening of petrol and diesel used car values as supply dwindles," Derren Nathan at Hargreaves Lansdown said.
Vertu Motors (AIM:VTU) expects full-year results to be in line with guidance.
7.56am: Shein filed for its London listing earlier this month, reports say
Shein, the fast-fashion giant, is said to have filed papers with UK market regulators earlier this month for its London listing later this year, reports from Reuters revealed.
Both spokespersons for Shein and the Financial Conduct Authority (FCA), the market watchdog, declined to comment.
The Chinese company struggled to list in the US after facing tough pushback from lawmakers.
Yesterday, bosses at Shein met with shadow business secretary Jonathan Reynolds to discuss details of the listing.
The Labour Co-op MP said that if Britain wants to allow new companies into the country then “we should seek to regulate them in the UK”.
He claimed that regulating them here would allow the highest standards to be enforced, pointing out that London-listed businesses have a "pretty extensive set of compliance standards applied to them”.
7.40am: Saga backs guidance as its cruises boom
Saga, the specialists for people over 50, reiterated its full-year guidance and said its travel and cruise divisions have started the year strong in the first four months, offsetting challenging market conditions in its insurance arm.
Ocean and river cruises saw their load factors rise by 83% and 78% year-on-year respectively, while travel booking revenue rose 14%.
In the insurance division, Saga has had to take action in the broking arm, but this is producing the expected benefits, particularly in motor insurance.
On the plus side, the combined operating ratio has been improved by price rises in insurance underwriting.
"Looking ahead, we are focused on driving sustainable business growth in a capital-light way, while growing our customer base and deepening our connections with those customers," said Mike Hazell, group CEO.
7.15am: FTSE 100 to open flat
London blue chips are on track to open flat this morning at around 8927, according to premarket futures.
Overnight in Asia, shares were overall higher, offsetting some recent losses, while the struggling yen fell to a record low versus the euro.
Asia-Pacific's broadest index without shares from Japan, rose 0.5% after three consecutive sessions of declines, while Japan's Nikkei jumped 0.9% and Taiwanese stocks slipped more than 1%.
Later today, attention will turn to cruise operator Carnival, which has faced several obstacles already in the first half of the year.
The temporary closure of its Baltimore port after a cargo ship collided with a bridge and the conflict in the Red Sea were just two.
Against that, record demand and bookings meant that it has already confirmed it is on track to meet 2024 guidance for underlying cash profit (EBITDA) of US$5.6bn.