- FTSE 100 down 55 points at 8,111
- Sainsbury's suffers Argos sales dip
- Key food prices fall
- Fuel prices "still too expensive"
4.53pm: FTSE 100 to close lower
London's blue chips are on track to close to 0.7% lower today after political concerns in both central Europe and the US appear to be dampening sentiment across markets.
Bond yields in the US lifted higher overnight after the Supreme Court issued a ruling that lifted the prospect of another Trump presidency.
Yesterday, it was ruled that Trump could not be prosecuted for official actions he made when in office, offering him immunity over his actions in regards to the January 6 riots.
Meanwhile, in Europe, eurozone bond yields have steadied slightly today after rising sharply on Monday in reaction to the results of France's first round of parliamentary elections.
In company news, Sainsbury's dropped 2.5% after after a fall in sales from its Argos business and general merchandise offset a strong grocery performance in the past quarter.
While this was against a strong comparative period a year ago, the FTSE 100 group acknowledged “significantly lower” seasonal sales and weak demand for electronics, particularly gaming.
3.40pm: Currencies and commodities today
As the FTSE 100 moves towards the close, here's a look at how commodities and currencies have performed today:
- Bitcoin/USD: -1% at $62,161
- GDP/USD: +0.25% at $1.267
- GDP/EUR: +0.25% at €1.181
- EURO/USD: flat at $1.073
- Brent Crude: +0.25% at $86.80
- WTI Crude: +0.1% at $83.46
- Gold: -0.2% at $2,327
- Silver: +0.8% at $29.69
3.22pm: Tesla shares rally on surprise demand surge
Tesla Inc (NASDAQ:TSLA) shares rallied more than 8% after reporting an unexpected increase in deliveries in the second quarter.
Production of 410,831 vehicles was down 5.2% from the first quarter, but deliveries came in at 443,956, up 14.8% from the first quarter and higher than 436,000 Wall Street expected.
Dan Ives at Wedbush said: "This was a huge comeback performance from Tesla and Musk with the Street expecting a clear miss this quarter with EV demand still choppy globally.
"It appears China saw a “mini rebound” in the quarter along with pricing stabilization that helped Tesla battle through headwinds to deliver a much stronger delivery quarter than even the bulls were expecting.
"In a nutshell, the worst is in the rear view mirror for Tesla as we believe the EV demand story is starting to return to the disruptive tech stalwart ahead of a historical Robotaxi Day on August 8th."
2.56pm: Plans for City's new super skyscraper put on hold
Plans for a new 73-story office tower set to rival the Shard have been deferred by the City of London Corporation in order to better take in "post-pandemic needs".
1 Undershaft, which is intended to replace the existing 23-floor tower formerly occupied by Aviva, was initially approved in 2016 with a design by architect Eric Parry.
It hopes to be the tallest building in the City at 310 metres (1,016 feet) tall have been in the pipeline for some time, with a smaller version approved in 2019.
It will sit smack bang in the middle of iconic buildings 22 Bishopsgate (currently the City’s tallest), The Cheesegrater (aka 22 Leadenhall), the Gherkin; and Lloyd's of London own Grade-1 listed building.
Should it win approval, developer Stanhope is expected to take six to seven years to complete construction.
Lloyd’s of London chair Bruce Carnegie-Brown is one business leader who has reaffirmed his opposition to the development.
Carnegie-Brown believes it would contradict the Square Mile’s “commendable record of opening up additional public space at street level” alongside new developments.
He also argued that the 11th-floor garden would be “significantly less attractive than the space it would replace”.
2.33pm: US stocks open lower
Wall Street has opened lower today, wiping out most of the gains made during yesterday's session.
The Dow Jones opened 0.2% lower at 39,100, while the Nasdaq dropped by 0.4% to 17,820.
The S&P 500 started the day 0.2% down at 5,461.
Companies that made moves at the opening bell included Tesla, which rose close to 6% after it posted better-than-expected delivery numbers in its second quarter.
Deliveries at the EV maker reached 440,000 during the period, beating Wall Street's guidance of 436,000.
Paramount saw its shares rise close to 3.5% after reports revealed it was in talks with other companies regarding merging its streaming service with another platform.
Warner Bros. Discovery is believed to be one of the companies interested in combining its streaming with the Yellowstone and Star Trek: New Worlds creator.
2.12pm: Not all doom and gloom for Sainsbury's
Britain’s second-largest supermarket chain Sainsbury appears to be undervalued despite its shares flagging on the back of today’s trading statement, according to City brokers.
Sainsbury’s enterprise value ratios against sales and underlying earnings (EBITDA), which came to 0.35 times and 5.4 times respectively, are “too low for us”, said house broker Shore Capital Markets.
“There remains a lot to like about Sainsbury in an improved UK supermarket scene,” said Shore Cap analysts, who gave the stock a buy rating.
Analysts at UBS also dropped a buy rating on Sainsbury’s stock with a 295p price target.
Weaker-than-anticipated general merchandise and Argos sales aside, “the strong grocery execution supports our view of the midterm margin upside”, said the Swiss bank.
1.37pm: Wall Street to open lower
US stocks are on track to open lower this morning as the effects of higher government bond yields start to feed through to the markets.
The Dow Jones is on track to open 135 points lower, while the Nasdaq is predicted to drop by 105 points, according to premarket futures.
The S&P 500 is forecast to start the day of trading 25 points lower at 5,511.
Bond yields in the US lifted higher overnight after the Supreme Court issued a ruling that lifted the prospect of another Trump presidency.
Yesterday, it was ruled that Trump could not be prosecuted for official actions he made when in office, offering him immunity over his actions in regards to the January 6 riots.
10-year bond yields lifted close to 14 basis points to 4.48% on Monday as economists prepared for the prospect of increased borrowing and further tariffs should the Republican candidate take office later this year. Overnight, yields held at 4.45%.
1.18pm: HSBC launches cost-cutting measures
HSBC is reducing the number of new hirings and asking investment bankers to cut down on travel and entertainment expenses as it looks to cut costs.
Departing boss Noel Quinn has launched a range of cost-saving measures including not replacing staff who have left or resigned in recent months.
Some areas of the business have been told to freeze hiring altogether, although this isn't expected to impact those working in client-facing roles.
Meanwhile, investment bankers have been told to organise at least three meetings with clients to make travel expenses worthwhile.
“Servicing our clients is our priority and ensuring we have the right people in the right places,” HSBC said in a statement.
"We are working smarter and more efficiently as we leverage technology and continue to manage costs.”
12.58pm: Frasers acquires Doncaster shopping centre
Frasers Group saw its shares drop more than 2% after investors scratched their heads on its decision to purchase the Frenchgate shopping centre in Doncaster.
Through the purchase, the retail group plans to triple the size of its Sports Direct shop to more than 35,000 square feet and open stores for its other brands including USC, Game and Evans Cycles.
Chief executive Michael Murray said: "The acquisition of Frenchgate Shopping Centre in Doncaster further demonstrates the group’s commitment to investing into brick-and-mortar.
“Acquiring property in key trading locations to unlock new opportunities for our retail and leisure businesses, such as Sports Direct, Everlast Gyms, Frasers and Flannels, is a key priority."
Last week, reports revealed the acquisition-hungry firm was setting its sights on the Princesshay shopping centre in Exeter.
Frasers is looking to purchase both 50% stakes owned by US asset manager Nuveen and the Crown Estate and is expected to invest £80 million to gain full control.
Its decision to pursue shopping centres highlights its commitment to in-store trading, with the debate still continuing on whether e-commerce rivals are best positioned for the future of retail.
12.36pm: Murdoch's Fox launches Netflix rival
Rupert Murdoch's Fox Corp is introducing a free streaming service, Tubi, in the UK to rival Netflix and Disney, marking its first entry into Britain's ad-supported digital TV market.
Tubi, which will offer over 20,000 movies and TV episodes, including titles like "Billy Elliot" and "Pacific Rim," will launch in the coming weeks, the paper said.
The service will feature content from major US entertainment companies such as Disney, NBCUniversal, and Sony Pictures, as well as original productions and shows from India and Nigeria, the FT revealed.
The launch follows the closure of Murdoch's TalkTV's linear operations in favour of a digital-only platform.
12.13pm: Compass Group falls on Sodexo read-across
Compass Group, the catering company, has dropped 2% after it suffered a negative read across from French rival Sodexo's warning that sales were lower than expected in the third quarter.
Shares in the Paris-listed food caterer dropped close to 5.5% after it said demand had slowed in China, causing quarterly sales growth to slow.
Revenue increased by 6.8% year-on-year to €6.07 billion during the quarter, missing company guidance of €6.11 billion.
With growth slowing compared to previous quarters, the group said it was caused by lower pricing, tougher comparatives and the downturn in Chinese markets.
"The slowdown in China is impacting mainly the tech sector, particularly the corporate service segment," chief financial officer Sébastien de Tramasure said.
However, Sodexo remained confident about its prospects in the country, predicting that the market will recover in the long term.
11.54am: Shell halts Rotterdam green fuel facility
Shares in Shell rose by close to 1.5% today after it revealed it would be pausing on-site construction work at a new 820,000-tonnes-a-year biofuels facility in Rotterdam.
Contractor numbers will reduce on-site and activity will slow down, helping to control costs and optimise project sequencing, said a statement from the oil supermajor.
Shell added that it would undertake an impairment review of the plant, which is designed to produce sustainable aviation fuel and renewable diesel from waste, while the construction process is on hold.
“Temporarily pausing on-site construction now will allow us to assess the most commercial way forward for the project,” said Huibert Vigeveno, Shell’s downstream, renewables and energy solutions director.
11.32am: Eurozone inflation eases; rate cut plans unaffected
Officials at the European Central Bank are not expected to slash interest rates at its July meeting despite inflation in the eurozone easing in June.
Preliminary figures released today revealed eurozone inflation slowed in line with expectations to 2.5% in June from 2.6% in May.
However, core inflation, which removes volatile food and energy prices, held at 2.9%, slightly ahead of the 2.8% analysts had forecast.
Prior to the inflation print, ECB president Christine Lagarde attempted to quieten calls for a July rate cut, claiming that there wasn't "a pre-determined" path for interest rates.
"Our work is not done, and we need to remain vigilant. We will not rest until the match is won and inflation is back at 2%," she said on Monday.
Markets are not expecting for rates to drop in July, but are growing in confidence that another cut will come later this year.
11.12am: Sainsbury's boss hits out at e-commerce tax loophole
Sainsbury's boss Simon Roberts has joined a growing list of business leaders who are calling for the closure of a tax loophole that benefits foreign e-commerce retailers.
Under current tax rules, consumers can make orders worth less than £135 online from overseas sellers and not have to pay customs duty, providing direct boosts to companies like fashion giant Shein.
Over in the EU, a similar rule applies albeit at a €150 threshold.
Therefore foreign e-commerce groups have avoided large customs bills by shipping deliveries directly to consumers instead of in bulk to storage facilities, which would then transport the parcels.
In response to the loophole, Roberts said: "All retailers should be working on the same basis.
"I want to make sure that the loopholes that are currently in place are closed for some of the businesses that aren’t paying tax in the right way, so it’s a level playing field for everybody."
Other business leaders such as Simon Wolfson at Next and Dragon's Den's Theo Paphitis, who owns and chairs Ryman and Robert Dyas, have come out against the loophole, calling on the government to review it.
Shein is currently in the midst of preparing for an IPO in London, having filed papers with regulators last month.
10.51am: Supreme shares fall despite vape ban optimism
Shares in vaping group Supreme slipped 6% despite it reiterating that it does not expect the government’s disposable vaping ban to have any long-term impact on its businesses.
Profits at the group also more than doubled in the latest financial year.
Whether the policy will even still be in place after Thursday’s election is not clear, but Sandy Chadha, chief executive. said that Supreme would be able to deal with whatever transpires.
“I am not concerned that the Government's vaping proposals will have any long-term impact on Supreme as a responsible manufacturer and distributor with resources and experience to adapt to potential new market dynamics."
Revenues in the year to end March 2024 rose by 42% to £221 million with pretax profits 109% better at £30.1 million.
Supreme added it has made a good start to the current year with trading in line with expectations.
10.13am: Revolut posts record revenues
Revolut revealed today it was closing in on receiving a banking licence in the UK, but this isn't the challenger bank's only good set of news.
In 2023, it posted record revenues of £1.8 billion in 2023, reflecting a 95% increase from the previous year.
The popular disruptive payments platform achieved a net profit of £344 million and saw a significant increase in its employee headcount, rising from less than 6,000 in 2022 to over 8,100 by the end of 2023.
High interest rates spurred the record set of results, though Revolut’s aggressive expansion strategy played no small part.
The company's customer base grew from 26.2 million to 38 million by year-end, marking a 45% increase.
In tandem with the publication of these results, co-founder and chief executive Nikolay Storonsky told CNBC that he is confident that Revolut will secure a British banking licence “sooner or later”.
Revolut has been trying to obtain a licence since 2021
9.53am: Trump and Le Pen push bond yields higher
Bond yields in the US lifted higher overnight after the Supreme Court issued a ruling that lifted the prospect of another Trump presidency.
Yesterday, it was ruled that Trump could not be prosecuted for official actions he made when in office, offering him immunity over his actions in regards to the January 6 riots.
10-year bond yields lifted close to 14 basis points to 4.48% on Monday as economists prepared for the prospect of increased borrowing and further tariffs should the Republican candidate take office later this year. Overnight, yields held at 4.45%.
The first spike in US bond yields came after the first presidential debate last week when Joe Biden's poor performance upped the likelihood of a Trump presidency.
Chris Weston at Pepperstone, the online broker, said the Supreme Court's ruling has acted as another catalyst in the surge in bond yields.
"Bond traders have an eye on Trump’s increasing odds of taking the White House, and the market senses Trump 2.0 will be inflationary,” he said.
Meanwhile, in Europe, eurozone bond yields have steadied slightly today after rising sharply on Monday in reaction to the results of France's first round of parliamentary elections.
France's 10-year bond yield was flat at 3.342%, close to 74 basis points higher than Germany's 2.598%.
9.30am: Ryanair sees record passengers in June
Ryanair shares have shifted close to 2% lower this morning despite posting a new monthly passenger record of 19.3 million in June.
It was up 11% from the 17.7 million passengers in June 2023, with the fleet’s load factor unchanged at 95%.
This comes despite widespread flight delays and cancellations in the month for which Ryanair has gladly pointed the finger at European air traffic controllers (ATCs).
“ATC services in Europe this summer are at their worst levels ever,” Ryanair’s chief operations officer Neal McMahon said last week.
Earlier, Wizz Air revealed its CO2 emissions increased in June despite its passenger numbers remaining relatively flat year-on-year.
Wizz Air said the emission increase was because it was keeping hold of older planes and "the wet lease of smaller gauge aircraft" which it uses to maintain its network footprint while other models are grounded for GTF engine inspections.
9.08am: Shoe Zone tumbles on profit warning
Shoe Zone shares have shed close to 17% of their value this morning after the high-street retailer warned annual profits would be lower than expected due to a multitude of headwinds.
Fewer shoes were sold in the months from April to June, while bad weather and increased shipping costs also hampered underlying earnings.
Now, the group expects adjusted pre-tax profits to reach around £10 million, lower than the previous guidance of £15.2 million, which was lowered to £13.8 million back in its interim results.
It blamed the rise in shipping costs on "pressures associated with container prices due to a reduction in the supply of shipping vessels and the continuation of a reroute away from the Suez Canal”.
Shoe Zone said it "experienced weaker than expected spring summer sales from April to June, due to unseasonal weather conditions”.
8.45am: Morning so far
London blue chips have fallen this morning as the markets react to large rises in government borrowing costs in the US and Europe.
US Treasury bond yields lifted on Monday evening after the Supreme Court paved the way for a second Trump presidency, while in the eurozone borrowing costs lifted on the back of the French far-right taking the majority in the first round of parliamentary elections.
Back in Britain, consumers have been handed a boost after shop prices slowed to their lowest points since October 2021, helped by falls in key food products such as butter and coffee.
Food prices came in 0.2% higher in June than the same month a year ago, while the cost of goods on average is down 1%.
Fuel prices have also started to fall, but the RAC believes they are "still too expensive" and is hoping the competition authority and new government can rectify the situation.
Petrol prices dropped by 3p to 145p a litre last month, while diesel fell by close to 4p to under 150p.
In company news, Sainsbury's has tumbled around 4% after several of its divisions experienced slowing sales, even though it made market share gains.
The UK's second-largest supermarket recorded a 6.2% decline in year-on-year sales at its Argos subsidiary despite boasting the "biggest market share gains of any grocer during the quarter."
8.25am: Fuel prices slow in June, but "still too expensive"
Fuel prices dropped for the second consecutive month in June, but both diesel and petrol prices remain higher than the RAC believes they should be.
Petrol prices dropped by 3p to 145p a litre last month, while diesel fell by close to 4p to under 150p, but the automotive service group claimed it was "still too expensive" when compared against wholesale prices.
Shell ranked top for the highest fuel prices across its 535 sites, with its petrol prices close to 4p more than the UK average at 149p per litre and its diesel 5p ahead of the norm.
Meanwhile, BP was close behind in second with an average of 146.5p per litre of petrol and 152p per litre of diesel.
RAC's Simon Williams said: “While it’s good news prices at the pumps have fallen for the second month in a row, this also leaves a bad taste in the mouth because we know drivers in Great Britain are continuing to get a raw deal.
"We remain baffled how the very same fuel can be sold for such vastly different prices by the biggest retailers, whether they’re run by supermarkets or the world’s largest oil companies.
“We will continue to highlight this disparity, along with the massive differences between major retailers’ high and low prices, to the new government and the Competition and Markets Authority with a view to them being addressed."
8.05am: Sainsbury's feeling weight of Argos downturn
Sainsbury's has opened trading more than 1.5% lower after several of its divisions experienced slowing sales, even though it made market share gains.
The UK's second-largest supermarket recorded a 6.2% decline in year-on-year sales at its Argos subsidiary in the latest quarter due to a drop in demand for consumer electronics.
Sales in Sainsbury’s core grocery division rose 4.8%, though general merchandise and clothing sales were down 4.3%.
Britain’s second-largest supermarket (behind Tesco) said that “volume growth has remained strong as inflation has slowed” while noting the “biggest market share gains of any grocer during the quarter”, per Kantar data.
The company anticipates a retail underlying operating profit for the full year in the range of £1.01 billion to £1.04 billion, reflecting an increase of around 5-10%.
7.54am: Shop inflation helped by falls in food prices
Consumers in Britain have been handed another boost after it was revealed that shop prices had slowed between May and June, helped by drops in food prices.
The British Retail Consortium found that its shop price index measuring the average prices across the high street decreased to 0.2% during the month.
It marks the slowest pace of inflation seen in the industry since October 2021, before the cost of living crisis began and when the Bank of England was only beginning its interest rate hike cycle.
Today's figures provide another boost for the UK's central bank as economists grow in confidence over a potential rate cut later this year.
Food prices still remain close to 2.5% higher for the year, while the cost of goods on average is down 1% compared to June 2023.
“During the height of the cost of living crisis, retailers invested heavily in improving their operations and supply chains to compensate for the impact of global shocks on input costs. This is clearly paying off,” said Helen Dickinson, chief executive of the BRC.
“Food inflation is now lower than any time since 2021 helped by falling prices for key products such as butter and coffee.
"Meanwhile, non-food prices went deeper into deflation as retailers tried to drive sales by discounting. This was particularly true for TVs with great deals to capitalise on the Euros fever.”
7.36am: Wizz Air sees emissions rise despite little passenger growth
Wizz Air, the European airline, revealed its CO2 emissions increased in June despite its passenger numbers remaining relatively flat year-on-year.
Some 5.78 million seats were purchased last month, marking a 0.4% rise compared to 2023, with total passengers dropping by 0.2% to a little over 5.3 million.
However, CO2 emissions per passenger/km, which excludes cargo flights, saw a 4.2% lift to 53.6 from 51.5 a year prior.
Wizz Air said the emission increase was because it was keeping hold of older planes and "the wet lease of smaller gauge aircraft" which it uses to maintain its network footprint while other models are grounded for GTF engine inspections.
The airline also warned that its manufacturing output needed revising as, although its long-term growth forecasts remain unchanged, it is expecting disruptions to its ongoing fleet plan for the next couple of years.
7.17am: FTSE 100 to open lower
London blue chips are set to start the day slightly lower, down around 30 points at 8,148, as the UK move a day closer to the general election.
Overnight, British challenger bank Revolut announced it was close to acquiring a UK banking licence nearly three years after it first applied for one.
Revolut has faced lengthy delays in receiving approval, but boss Nikolay Storonsky believes it will secure the licence “soon”.
Meanwhile, Rupert Murdoch has launched a free streaming service to rival Netflix in the UK.
Tubi is expected to offer content from Disney, Lionsgate, NBCUniversal and Sony Pictures Entertainment, having already gained close to 80 million monthly active users.
Over in Asia, China’s BYD rallied close to 21% after it revealed it had experienced a rise in sales in the second quarter, giving it back the top EV maker spot from Tesla.